Archives for January 14, 2021

Inverness Graham Zooms In On Microscopy

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Inverness Graham has acquired a new platform in the life sciences manufacturing and distribution market with the acquisition of Electron Microscopy Sciences (EMS).

EMS manufactures and distributes lab consumable products and equipment – including chemicals, supplies, and accessories – used in electron and light microscopy, histology, general research, and ancillary lab research markets.  Microscopy is the technical field of using microscopes to view objects that cannot be seen with the naked eye and histology relates specifically to the microscopic analysis of biological tissues.

Chemicals for microscopy include buffers, fixatives, stains, resins, embedding media, and immunogold labeling reagents. Other products provided by EMS include cutting, grinding, and polishing equipment for material preparation; dimplers, electro-polishers, and micro cleaves for electron microscopy film preparation; and vortex mixers, cryo preparation accessories, and diamond knives for histology applications.

EMS, led by President Stacie Kirsch, a well-known specialist in the field of specimen preparation for both biology and materials microscopy, was founded in 1969 and is headquartered 30 miles northwest of Philadelphia in Hatfield, Pennsylvania.

“I’m thrilled to partner with Inverness Graham to build on the tremendous growth EMS has achieved,” said Ms. Kirsch. “We look forward to continuing to provide exceptional service to both existing and new customers by leveraging the additional operating and financial resources Inverness has to offer.”

The buy of EMS is the result of a proactive, targeted search launched by Inverness Graham to locate a platform in the life sciences manufacturing and distribution market.

“We’re excited to be partnering with Stacie and the team at EMS to continue to solidify their position as a thought leader and go-to provider of microscopy, histology and sample prep reagents and consumables used in research lab settings,” said Paul Nolen, a managing principal of Inverness Graham. “We believe we are well-positioned to partner with management to aggressively invest in new product offerings and capabilities, strengthen operations and infrastructure, and pursue complementary add-on acquisitions to help us expand into high-growth adjacent markets with new, targeted products.”

Inverness Graham invests in tech-enabled manufacturing, service and software companies. The firm was founded by senior executives of the Graham Group, a family-owned multi-national industrial and investment company with interests in plastics, packaging, recycling, building products and outsourced manufacturing. Inverness Graham is based near Philadelphia in Newtown Square, Pennsylvania.

Inverness Graham and EMS are actively seeking add-on acquisitions of companies that operate in the laboratory consumables and chemicals sectors.

© 2021 Private Equity Professional | January 14, 2021

Arcline Forms Quantic to House Electronics Components Makers

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Arcline Investment Management has formed Quantic as a new platform company in the high-value and mission-critical electronics components sector.

The formation of Quantic was announced in tandem with Arcline’s buy of TRM Microwave, a New Hampshire-based maker of radio frequency (RF) and microwave components, integrated assemblies and subsystems used in the military, space and commercial markets.

TRM, now under the Quantic umbrella, joins Ohmega Technologies, a California-based maker of thin-film electronic resistive materials that was acquired earlier this month, and Evans Capacitor, a Rhode Island-based designer and manufacturer of high-density hybrid capacitors made from tantalum and ruthenium (rare and highly corrosion-resistant metals). Evans’ hybrid capacitors are used to store electrical energy and are used in aerospace, defense, and energy applications including radar, laser, electronic warfare. Evans was acquired by Arcline in November 2020.

The acquisition of Evans was Arcline’s first buy in a strategy to build a specialty electronic components platform. At the close of the Evans transaction, Kevin Perhamus was named as the CEO of the new platform. From July 2010 to August 2020, Mr. Perhamus was the CEO of Winchester Interconnect – a maker of radio frequency, microwave, cable and fiber optic connectors – which was acquired by publicly traded Aptiv in October 2018 from private equity firm Snow Phipps.

“I am excited to welcome TRM into the Quantic family,” said Mr. Perhamus. “TRM has built a strong reputation of working closely with customers to deliver industry-leading, custom-engineered components and subsystems. The business perfectly aligns with our strategy of assembling a portfolio of companies that deliver world-class products and customer service. We are pleased to be in a position to help support TRM’s ambitious growth strategy.”

Arcline makes control investments in companies that have from $10 million to $100 million of EBITDA and enterprise values of up to $1 billion. Sectors of interest include industrial technology, life sciences, aerospace and defense, specialty materials, and medical products.

Arcline closed its first fund, Arcline Capital Partners LP, with $1.5 billion of committed capital in March 2019. Arcline was founded in September 2018 and has offices in San Francisco and New York City.

© 2021 Private Equity Professional | January 14, 2021

Pfingsten Assembles Cabinet Maker

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Kith Kitchens, a portfolio company of Pfingsten Partners, has acquired Mouser Custom Cabinetry, a maker of semi-custom and custom kitchen and bath cabinetry.

Mouser’s framed and frameless cabinets are made from a variety of wood species – including alder, cherry, hickory, maple, red and white oak, and walnut – and are available in a wide range of finishes and door styles.

The Elizabethtown, Kentucky-based company was founded in 1955 and has more than 240 employees and 227,000 square feet of offices, manufacturing, and warehouse facilities.

“Kith is the perfect strategic partner for our business,” said Steve and Keith Mouser, the former owners of Mouser. “The combination with Kith will allow us to better serve our diverse customer base through access to increased resources and product offerings while collaborating to drive manufacturing efficiencies and growth.”

Pfingsten acquired Kith Kitchens, an Alabama-based maker of kitchen and bath cabinetry, in June 2016 as a platform investment for its $382 million fifth fund which closed in March 2016. Kith, led by CEO Mark Smith, makes semi-custom kitchen and bath cabinetry for both the remodeling and new construction markets under the Kith and Eudora brand names. The buy of Mouser, which closed on December 31, 2020, is Kith’s first add-on acquisition under Pfingsten’s ownership.

“We are excited to add Mouser to the Kith platform,” said Mr. Smith. “Mouser’s outstanding reputation and extensive product portfolio of premium kitchen and bath cabinets will be highly complementary to Kith. The combined business will offer its customers high-quality products in a variety of price points, customization options and materials.”

Chicago-based Pfingsten invests in middle-market manufacturing, distribution and business services companies that have transaction values ranging from $15 million to $100 million, revenues from $20 million to $150 million, and EBITDA between $3 million and $12 million. Since completing its first investment in 1991, Pfingsten has acquired 142 such companies through five funds with total commitments of $1.3 billion.

© 2021 Private Equity Professional | January 14, 2021

O2 Closes Fund III

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O2 Investment Partners has held a final closing of O2 Investment Partners Fund III LP with $270 million in capital commitments. O2’s new fund received strong support from numerous institutional investors.

“We appreciate the confidence that our investors continue to place in our team and strategy in light of the challenges that the world is currently facing, and we are also grateful for the ongoing support of the talented entrepreneurs and management teams who choose to partner with us,” said Todd Fink, the managing partner of O2.

Metric Point Capital was engaged as O2’s placement agent for this fundraise and Kirkland & Ellis provided legal services. “The O2 team plays an important role in the lower middle market, partnering with entrepreneurs and management teams to help execute their strategic visions and continued growth plans,” said James Weidner, a partner at Metric Point. “We are pleased to have assisted O2 in achieving its fundraising goals as the firm welcomed a diverse group of investors to the fund.”

“In our view, the timing of Fund III is excellent as we continue to see significant deal flow,” added Mr. Fink. “Fund III just closed its third platform investment and has a strong pipeline of new opportunities.”

Yesterday, O2 announced the acquisition of Flip Electronics, a Roswell, Georgia-based specialty distributor of electronic components to both manufacturers and end-users in the military, aerospace, telecommunications, healthcare, and industrial sectors. Flip’s products include capacitors, connectors, crystals oscillators, diodes, fans, LEDs, resistors, sensors, transformers, transistors and a wide range of additional electronic parts.

Flip specializes in end-of-life (EOL), obsolete, and hard-to-find components. Parts and components receive an EOL designation when a manufacturer has decided that a product has reached the end of its “useful lifespan” and it will no longer be marketing, sustaining and selling the product.Flip’s founder and CEO Jason Murphy, as well as other members of the company’s management team, partnered with O2 on this investment.

O2’s other Fund III platforms include SIB Fixed Cost Reduction, a South Carolina-based provider of cost reduction services including invoice analysis, vendor negotiation and cost monitoring for a variety of expense categories including telecom, utilities, and waste management.  SIB’s fees are contingent on the cost savings found for its clients. SIB was acquired by O2 in March 2020; and First Class Air Holdings, a distributor of more than 100,000 SKUs of new and overhauled aftermarket aircraft components and a provider of maintenance, repair, and overhaul services for cargo and structural airframe systems. Customers of First Class Air are primarily cargo airlines, ranging from large domestic and global cargo carriers to smaller regional cargo airlines, with a niche focus on the freighter market. First Class Air and its sister company Cargo Repair were acquired by O2 in January 2020.

O2 makes control investments in companies with enterprise values from $10 million to $100 million and EBITDA from $4 million to $15 million that are located anywhere in the US and Canada. Sectors of interest include business-to-business services, technology, and select niche industrial companies. O2 is based in the Detroit suburb of Bloomfield Hills and was founded in 2010.

© 2021 Private Equity Professional | January 14, 2021