Align Capital Partners (ACP) has agreed to sell its portfolio company Pleatco Filtration to publicly traded Pentair for $255 million in cash.
Pleatco designs and manufactures pleated filter cartridges, DE grids (diatomaceous earth – a type of filtration material) and filter wash products used in the industrial air and pool/spa markets. Pleatco’s aftermarket filtration products are sold to and through pool and spa retailers, distributors, online retailers, and original equipment manufacturers that are located throughout the United States, Canada and Europe.
ACP acquired Pleatco in June 2017 and doubled the company’s revenue and increased its headcount from 180 to over 380 employees during its ownership term. Pentair has estimated that Pleatco will generate $95 million of annual revenue in 2021.
Pleatco completed three add-on acquisitions under ACP ownership including TVS Filters, an Alabama-based maker of pleated filter cartridges (December 2019); APEL International, a Kentucky-based manufacturer of cartridge filters, pleated bags and fabric filters (March 2019); and Milton Manufacturing, an Ontario-based maker of spun-bond, paper, felt and pleated bag filters (March 2019).
In addition to its add-on activities, ACP recruited new senior management for Pleatco including Group CEO Rick Von Drehle, President Seth Soltow, CFO Sharon Adams, and CRO Pete Todd.
“Pleatco has been truly transformed through an aggressive series of investments in people, systems, facilities and products,” said Rob Langley, a managing partner at ACP. “Additionally, the key tenets of the business that attracted us to the investment years ago are still driving the company forward today. Pleatco benefits from the recurring nature of its highly engineered, consumable products that are focused on serving pool, spa and industrial air customers’ aftermarket needs.”
“It’s been incredible to see the pace of change and growth within Pleatco since I joined the company in 2018,” said Mr. Soltow. “ACP’s operating and growth resources served as active partners who committed much more than just capital to our management team. The company today is well-positioned for continued growth alongside the additional scale and resources that Pentair provides.”
Pentair (NYSE: PNR) designs and manufactures pool and spa equipment, filters, fire suppression equipment, spray nozzles, water disposal pumps, valves, and other accessories. The company had revenues of more than $3 billion in 2020 with global headquarters in London and US headquarters near Minneapolis in Arden Hills, Minnesota.
The sale of Pleatco is ACP’s third exit this year and follows the July 2021 sale of Alliance Technical Group, an Alabama-based provider of industrial testing, emissions monitoring and analytical services, to Morgan Stanley Capital Partners; and the September 2021 sale of Electronic Transaction Consultants, a Texas-based provider of software technology used by city, state, and regional tolling agencies, to publicly traded Quarterhill (TSX: QTRH).
Align makes control investments in companies that have from $3 million to $10 million of EBITDA. Sectors of interest include business services, technology, specialty manufacturing, distribution, and healthcare. Align closed its second fund, Align Capital Partners Fund II LP, at its hard cap of $450 million in February 2020. The firm was founded in 2016 by managing partners Steve Dyke, Robert Langley, and Chris Jones – all formerly of The Riverside Company – and has offices in Cleveland and Dallas.
Baird was the financial advisor to Pleatco on this transaction which is expected to close by year-end 2021.
© 2021 Private Equity Professional | September 16, 2021