Z Capital Partners has agreed to sell Premier Thermal Solutions, a provider of metal heat treating and processing services, to Aalberts NV.
In March 2017, Z Capital acquired Atmosphere Annealing LLC and NitroSteel LLC – the two businesses went to market under the Premier Thermal Solutions brand – from publicly traded Gerdau SA, one of the larger steelmakers in the Americas.
Premier Thermal Solutions (PTS) has more than 800,000 tons of installed heat-treating capacity including annealing (to increase ductility and reduce hardness); and case hardening processes including ferritic nitro-carburizing and quench & temper processing. PTS also offers other metal processing services including phosphate coating, shot blast cleaning, cutting and testing. Nitro-carburizing is a process of spreading nitrogen, carbon and oxygen atoms into the surface of a steel part (forming a compound layer at the surface and a diffusion layer) that improves wear resistance, better lubrication retention, dent resistance, and increases service life.
PTS’ customers are active in the aerospace & defense, automotive, heavy truck, energy, heavy equipment and other industrial end-markets. Since opening its first plant in Lansing, Michigan, in 1978, PTS has expanded its footprint to ten plants across the industrial Midwest with facilities in Michigan, Ohio, Indiana, and Wisconsin.
In October 2018, PTS acquired Al-Fe Heat Treating, an aluminum heat treater with four plants in Ohio, Michigan, and Indiana (2). This add-on expanded PTS’ service capabilities and diversified its metal-treatment services. For its most recent fiscal year, PTS had annual revenues of just over $60 million.
“The extensive support from the ZCG team to execute on a shared long-term vision for PTS has generated exceptional results,” said CEO Steve Wyatt. “Our business is now positioned to grow, scale and capitalize on new market opportunities with Aalberts, and we look forward to building on this success and identifying more unique and efficient ways to provide our customers with the critical services they rely on us for.”
“When we acquired PTS as a corporate carve-out from Gerdau, we saw an opportunity to work with a company that could benefit enormously from our deep operational expertise, resources and technical capabilities,” said James Zenni, the founder, president and chief executive officer of ZCG. “We were also confident that, together with Steve and the team we built around him, we could achieve our ambitious growth goals and position PTS as a high-performing standalone company. Through a combination of consistent organic growth and the acquisition of Al-Fe Heat Treating, PTS has been transformed, and we wish Steve and the entire team nothing but continued success.”
“The performance and growth of PTS over the last four years truly exemplifies the strengths of our team and our commitment to working hand in hand with strong leadership teams,” said Rahul Sawhney, a senior managing director at ZCG. “By investing heavily in PTS – including in organizational processes, technology systems, state of the art facility upgrades and complementary senior leadership hires – not only did we grow the business, but we scaled the platform and positioned the company for continued growth in a fragmented metal processing industry.”
Z Capital makes control investments in middle-market distressed companies, operational turnarounds and special situations. The firm targets companies with an enterprise value of less than $1 billion or EBITDA of less than $100 million. Sectors of interest include basic materials, branded consumer, automotive parts, capital equipment and general manufacturing. Z Capital is based in the Chicago suburb of Lake Forest and has additional offices in New York City.
Publicly traded Aalberts (Euronext: AALB) had revenues in FY2020 of €2.6 billion and operates from four groups – piping systems; surface technologies; hydronic flow control; and advanced mechatronics and fluid control. Netherlands-headquartered Aalberts has more than 16,000 employees with operations in over 50 countries.
The sale of PTS to Aalberts is expected to occur before the end of the year.
© 2021 Private Equity Professional | July 20, 2021