CenterGate Closes Mid-State Add-On
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CenterGate Closes Mid-State Add-On

Publicly traded AZZ has sold AZZ SMS to Mid-State Industrial Maintenance, a portfolio company of CenterGate Capital.

SMS is a provider of boiler repair, maintenance, and overhaul services. The business has approximately$35 million in annual revenue and operates a 26,155 square foot facility in St. Petersburg, Florida.

Mid-State, acquired by CenterGate Capital in February 2019, provides industrial services to customers in the chemical processing, phosphate mining, power generation, and building products industries throughout the southeastern United States.

The company currently employs more than 500 engineers and shop personnel that are active in manufacturing, repairing, designing, dissembling and transporting equipment and machinery ranging from gearboxes and trommels to structural piping and storage tanks. Mid-State, led by CEO Jeff Clyne, was founded in 1973 and is headquartered in Lakeland, Florida.

“We believe the acquisition of SMS contributes towards our vision of providing our customers with the best services with a focus on safety and quality that we know they depend on,” said Mr. Clyne. “Acquiring SMS further positions us as a leader in diversified industrial solutions.”

AZZ (NYSE: AZZ) manufactures electrical equipment and components used in power generation, power transmission and power distribution applications. The Fort Worth, Texas-based company also provides hot dip galvanizing services to the steel fabrication industry.

SMS was acquired by AZZ in 2013 as part of its acquisition of Georgia-based Aquilex Specialty Repair and Overhaul, a portfolio company of Centerbridge Partners.

“The divesture of SMS is in line with our strategic plan to restructure our portfolio to focus on growth within our core businesses,” said Tom Ferguson, CEO of AZZ. “We are pleased to have reached an agreement with Mid-State to acquire SMS while maintaining uninterrupted service to the customers of SMS, and employment for the SMS workforce. We are focused on activities that will drive higher returns on invested capital within our core businesses for long-term margin expansion and growth.”

Austin, Texas-based CenterGate invests in lower middle-market companies that have from $20 million to $250 million of revenue and up to $20 million of EBITDA. Sectors of interest include business services, industrials, energy services, consumer, and healthcare. In December 2016, the firm held an above target and oversubscribed final closing of CenterGate Capital Partners I LP with $350 million of capital commitments.

© 2020 Private Equity Professional | November 2, 2020

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