Align’s Stack Tester Closes Fourth Add-On

Alliance Source Testing, a portfolio company of Align Capital Partners, has acquired METCO Environmental from TestAmerica, a subsidiary of publicly traded Eurofins Scientific.

Alliance Source Testing (AST) provides emissions testing services to industrial facilities for permitting and compliance in accordance with air-quality mandates from local, state and federal regulatory bodies. The company services customers’ facilities on a repeated basis, with the frequency determined by regulations for each industry.

AST’s customers are active in a range of industries including asphalt production; automotive manufacturing; cement production; chemical manufacturing; fiberglass; food & beverage; and iron & steel. The company, led by CEO Chris LeMay, operates a network of thirteen offices across Alabama (2), Alaska, Arkansas, Colorado, Iowa, Louisiana, Pennsylvania (2), Texas (2), Utah, and Virginia with a headquarters near Huntsville in Decatur, Alabama.

METCO provides source emissions (or stack) testing services to companies operating in the chemical, oil & gas, and power generation sectors primarily across the Texas and Gulf Coast regions. METCO has offices in Dallas, Houston, and Baton Rouge.

“Acquiring METCO adds experienced talent, resources, and expertise to AST, further cementing AST as the leader in the Gulf region and provider of choice for customers with the most complex testing needs,” said Mr. LeMay.

“METCO and AST are a natural fit given the geographic overlap and similarity of cultures focused on providing the highest quality service to customers,” said Rob Langley, a managing partner at ACP. “We are excited to continue supporting the AST team as they build the company’s leadership position within the stack testing sector.” Operating Partner Dave Perotti, Principal Jack Parks, and Associate Corey Roe worked alongside Mr. Langley on this transaction.

The buy of METCO is AST’s fourth add-on acquisition since 2015 and the company continues to seek add-on acquisitions. The three earlier add-on acquisitions were the April 2017 buy of Golden Specialty, a provider of stack testing services to industrial facilities in the Western US; the May 2015 buy of Air Sampling Associates, a provider of stack testing services throughout Texas, Oklahoma, and the Southwestern US; and the April 2018 buy of Air Pollution Testing, a provider of stack testing services to industrial facilities in the Western US.

Align makes control investments in companies that have from $3 million to $10 million of EBITDA. Sectors of interest include business services, specialty manufacturing, and value-added distribution. The firm was founded in 2016 by managing partners Steve Dyke, Rob Langley, and Chris Jones – all formerly of The Riverside Company – and has offices in Cleveland and Dallas. Align is investing from its inaugural private equity investment fund, Align Capital Partners Fund I LP, which closed in September 2016 with $325 million of committed capital.

Eurofins Scientific (Euronext: ERF) is a Luxembourg-headquartered provider of testing services to companies operating in the pharmaceutical, food, environmental, agriscience, and consumer products industries. The company has more than 40,000 employees and 650 laboratories across 45 countries.

Eurofins Scientific acquired TestAmerica in October 2018 from China-based JSTI Group for $175 million. In 2018, Test America operated a network of 24 full service testing laboratories and 40 service centers throughout the US with revenues of $230 million. JSTI acquired TestAmerica in September 2016 from H.I.G. Capital and American Capital which had purchased the company in January 2003.

© 2020 Private Equity Professional | February 11, 2020

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