X-Ray Inspector Sold to Warburg and Tilia
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X-Ray Inspector Sold to Warburg and Tilia

Sale by Levine Leichtman is its seventh exit since December 2020

FlexXray can detect metal, glass particles, stone, bone, plastic, wood and missing components down to 0.8 mm and smaller

SOURCE: FlexXray

Levine Leichtman Capital Partners (LLCP) has sold FlexXray, a provider of x-ray inspection services to food manufacturers and processors, to Warburg Pincus and Tilia Holdings.

FlexXray utilizes X-ray technology and metal detection equipment to pinpoint physical contaminants and defects in food products and raw materials when contamination events occur during the food manufacturing process. FlexXray’s machines and processes can detect metal, glass particles, stone, bone, plastic, rubber gasket material, product clumps, container defects, wood and missing components down to 0.8 mm and smaller.

In addition to FlexXray’s inspection services, the company also provides ancillary services including contaminant removal, can and jar dud detection (checking the integrity of vacuums, seals and other closures) and repackaging.

FlexXray’s first inspection system was built in 2001 by Don Forrest when a local bakery contacted him and asked if he could help locate “a missing bolt” in a run of 200 pies baked for a large event. FlexXray found two bolts and saved 198 pies.

Today, FlexXray serves some of the largest food companies in North America. Every day trucks bring food products to FlexXray, and every day FlexXray sends products back to its customers, ready to return to their respective sales and distribution channels. For customers that need to inspect food products at their own facilities, FlexXray also rents and delivers X-ray inspection systems and provides staff training.

In March 2018, FlexXray acquired Connecticut-based Total Quality Corporation and in May 2019 it acquired Illinois-based Accu-ray. FlexXray is led by CEO Randy Jesberg and operates facilities in Arlington, Texas (headquarters), near Chicago in Aurora, Illinois, and near New Haven in Guilford, Connecticut.

LLCP acquired FlexXray in August 2017 from Texas-based Barton Creek Equity Partners.

“Randy Jesberg and the entire FlexXray team have built an exceptional, differentiated business through an unwavering commitment to helping the world’s largest food manufacturers keep their products and their customers safe,” said Matthew Rich, a senior managing director at LLCP. “Following our initial investment in 2017, the company made significant investments in management, sales & marketing, technological capabilities, and capacity. In addition, we were successful in completing two add-on acquisitions, which expanded FlexXray’s geographic reach, broadened its service offerings and enhanced its ability to better serve customers nationally. FlexXray is positioned for continued success under its new ownership.”

“FlexXray provides a best-in-class solution to protect customer brands, retailer relationships and most importantly, consumer health and safety,” said Mr. Jesberg. “This investment represents a significant opportunity to grow the business while creating important environmental benefits for our customers by reducing food waste. We believe that Warburg Pincus and Tilia are the ideal partners to support us in our next chapter and look forward to leveraging their global network and broad resources in the food safety space.”

“With the increased compliance through USDA and FDA regulations and focus on minimizing food waste, FlexXray is experiencing rapid market adoption and has significant growth opportunities ahead,” said Stephanie Geveda, a managing director and head of business services at Warburg Pincus. “The company’s mission-critical services, ensuring food product safety, is backed by an incredible management team and strong customer service.”

“We are excited to partner with Randy and the FlexXray team, alongside Tilia, to build upon FlexXray’s history of success to enhance and expand their offerings in this dynamic and growing market,” said Michael Pan, a principal at Warburg Pincus.

Warburg Pincus has more than $64 billion in assets under management and has raised 19 private equity funds since its founding in 1966. The firm has experience in the food safety and food supply sectors through past investments in Certified Laboratories, Hygiena, GA Foods, Aramark, Grubhub, and Trimark. Warburg Pincus is headquartered in New York City with additional offices around the world.

“FlexXray is well-positioned to meet the growing consumer demand for a safe and environmentally-friendly food supply chain. The investment in FlexXray reflects our ongoing mission to invest in companies that help make the food supply chain safer for our customers and ultimately, the end consumer,” said Johannes Burlin, a co-CEO of Tilia. “We are excited to partner with Warburg Pincus to bring this investment to life and extend the growth trajectory for the company.”

Tilia is an active investor in food and nutrition supply chain companies. Current portfolio companies include Refrig-It, Certified Laboratories, Universal Pure, and Ellison Bakery. Tilia was co-founded in 2017 by Mr. Burlin and Eric Larson and is headquartered in Chicago.

“We are appreciative of LLCP’s support and guidance over the last four years,” concluded Mr. Jesberg. “Their partnership, management-centric approach and strategic insights contributed greatly to the evolution and expansion of the business. We could not have asked for a better partner to help guide FlexXray through this period of tremendous growth.”

Levine Leichtman Capital Partners invests in middle-market companies located in the United States and Europe. Sectors of interest include consumer and branded products, franchises, business services, healthcare, education, engineered products and light manufacturing.

The sale of FlexXray by LLCP follows a host of 2021 exits including Trinity Consultants (June), Nothing Bundt Cakes (May), ZorgDomein (January), and Jonathan Engineered Solutions (January). In December 2020, the firm also exited investments in Futurewhiz and Pacific Handy Cutter.

Houlihan Lokey was the lead financial advisor to FlexXray with support from Robert W. Baird & Co.

© 2021 Private Equity Professional | July 27, 2021

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