MiddleGround Builds Specialty Metals Platform

MiddleGround Capital has completed the acquisition of Supra Alloys and EDGE International from Titan Metal Fabricators. Post-closing, the two businesses will be combined with Banner Industries, a processor and distributor of metal bar products that was acquired by MiddleGround in December 2019.

Banner Industries has more than 200,000 square feet of production floor space and maintains a metals inventory of more than 4,000 tons. The company was founded in 1961 and is headquartered near Chicago in Carol Stream, Illinois with additional facilities in Ohio, North Carolina, Indiana, and Texas.

Banner operates through two divisions – Banner Service Corporation, a value-added distributor of carbon and stainless steel, aluminum, brass, titanium, and other exotic materials; and Banner Medical Innovations, a processor of medical-grade metals for device manufacturers in the orthopedic, spine, and dental sectors.

Like Banner, Supra Alloys and EDGE International are value-added stocking distributors of metal bar, plate, and sheet product. Supra, based near Los Angeles in Camarillo, California and led by General Manager Craig Schank, supplies titanium and titanium alloys that are used in the aerospace, medical, and industrial end markets. Edge, based in Dayton, Ohio and led by General Manager Stephen Smith, provides medical-grade cobalt-chrome, stainless and titanium bar used in medical implants and instruments.

“The addition of Supra and Edge builds scale in medical and aerospace end markets and broadens our geographic reach,” said Dan Stoettner, the president of Banner Industries. “We are thrilled about working with the Supra and Edge teams and learning from their expansive industry knowledge so we can further enhance the high-quality product and service we provide to our customers.”

“We are excited to welcome the Supra and Edge teams to the MiddleGround family,” said John Stewart, a partner at MiddleGround. “With the complementary capabilities and product offering they bring to Banner we believe the future of this platform is very bright. This is a transformational step forward, and we look forward to what this next phase of growth means for our customers.”

MiddleGround Capital makes control equity investments from $25 million to $65 million in North American-based business-to-business companies in the industrial and specialty distribution sectors that have enterprise values of up to $200 million. The firm was formed in May of 2018 by former Monomoy Capital professionals John Stewart, Lauren Mulholland, and Scot Duncan.

MiddleGround closed its first fund, MiddleGround Capital I LP, at its hard cap of $459.5 million in September 2019. The firm is headquartered in Lexington, Kentucky with an additional office in New York City.

Titan Metal Fabricators, the seller of Supra Alloys and EDGE International, is a California-based manufacturer of process equipment including heat exchangers, pressure vessels, reactors, and distillation towers using titanium, zirconium, tantalum, niobium, and high nickel alloys.

Private Equity Professional | June 3, 2020

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