Arcline Acquires Electric Grid Platform from IGP

Industrial Growth Partners (IGP) has sold Electric Power Systems International (EPS) and North American Substation Services (NASS) (together EPS-NASS) to Arcline Investment Management.

As part of its transaction with Arcline, IGP has reinvested in EPS-NASS and maintains a minority equity position.

EPS-NASS is a provider of outsourced electrical engineering, testing, repair, and maintenance services. The company specializes in electrical substation equipment including protective relay and control systems, breakers, transformers, batteries and switchgear. EPS-NASS’ customers include companies active in the utility, industrial, transit, data centers, and commercial markets.

IGP purchased a controlling interest in Orlando-based NASS in December 2014 and acquired St. Louis-based EPS in November 2018. EPS is led by CEO Steve Reed and NASS is led by President Daniel Niccum.

According to Arcline, the recurring services provided by EPS-NASS are critical to the maintenance, upgrade, and operation of the United States’ electrical power grid, which is undergoing long-term investment to modernize its aged asset base, increase reliability and security, and build renewable power generation capacity.

“Critical infrastructure services and energy transition are two of Arcline’s primary investment themes, and the combination of EPS and NASS brings together two industry leaders in these areas,” said Arcline in a released statement. “We look forward to supporting these two great businesses as they perform the essential work of upgrading and maintaining the nation’s electrical infrastructure.”

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 defense and aerospace; infrastructure services; industrial and medical technology; life sciences and specialty materials. Arcline was founded in September 2018 and has offices in San Francisco and New York.

In February 2021, Arcline closed its second fund, Arcline Capital Partners II LP, with total capital commitments of $2.75 billion. Arcline’s buy of EPS-NASS follows the acquisition last month of PDC Machines, a Philadelphia-based manufacturer of specialty gas compression systems that are used in all stages of the hydrogen energy supply chain, including hydrogen production, transportation, storage, and refueling. Typical applications for the company’s products include fueling hydrogen-powered vehicles; filling cylinders and bulk storage tanks with process gases; and the conversion of wind and solar energy to hydrogen power.

San Francisco-based IGP invests in niche manufacturers and industrial services businesses that have histories of profitability and revenues of up to $250 million. In July 2019, IGP sold Integrated Polymer Solutions, a manufacturer of elastomeric components for defense, aerospace and medical applications, to Arcline.

Harris Williams was the financial advisor to Arcline, and Stifel and William Blair were the financial advisors to IGP.

© 2021 Private Equity Professional | April 27, 2021

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