Archives for March 8, 2022

AE Industrial Partners has agreed to invest in Firefly Aerospace, a provider of launch vehicles and spacecraft. Noosphere Ventures was Firefly’s seed investor and AEI has agreed to purchase all of the firm’s stake in the company.

Firefly is a designer, manufacturer and operator of spacecraft used to transport small payloads – primarily small satellite payloads – into space. According to the company, it has the capability of carrying up to ten metric tons of payload at the lowest cost per kilogram in the small-launch sector of the space industry. Firefly, led by CEO and co-founder Tom Markusic, was founded in 2017 and is headquartered just north of Austin in Cedar Park, Texas.

Firefly performed the first launch of its flagship vehicle, Alpha, in September 2021 and is currently awaiting the necessary approvals for its second launch. Firefly also recently completed the critical design review (CDR) phase for its Blue Ghost Lunar Lander Program.

Firefly’s completed CDR paves the way for construction of the Blue Ghost Lander, which is scheduled to touch down in the Mare Crisium lunar basin in September of 2023 carrying ten NASA payloads as part of the $93 million Commercial Lunar Payload Services (CLPS) contract secured by Firefly in 2021. The lander will also take several commercial payloads to the lunar surface. The 2023 Blue Ghost mission will be the first of what are expected to be yearly lunar surface missions for Firefly.

Boca Raton-based AEI invests in the aerospace and defense, power generation, and specialty industrial sectors. Typical company targets will have from $50 million to $500 million of revenue. In July 2018, the firm held a final hard-cap closing of its second private equity fund, AE Industrial Partners Fund II LP, with $1.36 billion in commitments.

The investment in Firefly adds to AEI’s portfolio of space investments and follows the firm’s acquisition of Sierra Space in November 2021 and the buy of RedWire Space in March 2020. Since acquiring RedWire, AEI has closed eight add-on acquisitions for the company.

Noosphere Ventures is seed and venture capital investor focused on space technology. The firm was founded in 2014 by tech entrepreneur Max Polyakov and is headquartered in Menlo Park, California.

Ernst & Young is the financial advisor to AEI and Jefferies is the financial advisor to Noosphere Venture Partners.

© 2022 Private Equity Professional | March 8, 2022

Strattam Capital has made a $35 million majority investment in Intellect, a provider of compliance management software.

Intellect’s cloud-based, no-code, quality management (QMS) and environmental, health & safety (EH&S) software applications are used by mid-market and enterprise companies to comply with ISO, FDA, EPA and OSHA manufacturing standards and regulations. Intellect’s software provides its customers – typically active in the medical device, laboratory, and electronics sectors – with the ability to digitize and automate their internal compliance processes and improve compliance documentation and visibility for external auditors and regulators.

Intellect will use Strattam’s growth capital investment to expand its product, engineering, sales and marketing teams, with a specific focus on building additional vertical-specific domain expertise.

Los Angeles-headquartered Intellect was founded in 2000 by CEO Romeo Elias. “There is a significant opportunity in the QMS and EH&S marketplace, especially among mid-market companies who want to implement modern software to automate and ensure compliance, but don’t want to have to change their internal processes or rely on their IT departments to do so,” said Mr. Romeo. “With Strattam, we found a partner who shares this same vision. We were impressed with their approach in working with founders to develop a Five-Point Plan to set this vision into motion.”

“Rising regulations and hybrid work environments have left many companies scrambling to find solutions to meet their increasingly critical and complex compliance needs. We believe the flexibility of Intellect’s solution makes it a perfect fit for mid-market companies seeking to solve their compliance problems with modern and intuitive software,” said Neil Willis, a partner at Strattam. “We are very excited to be partnering with Romeo and the entire Intellect team to help them build on their impressive success to date and achieve their goal of becoming a clear category leader.”

Strattam invests in companies in the enterprise software and tech-enabled services sectors. The firm’s investments typically have enterprise values up to $100 million, revenues of $10 million to $30 million, and positive EBITDA. Strattam was founded in 2013 by Bob Morse and Adrian Polak and is headquartered in Austin, Texas.

Tree Line Capital Partners provided the debt financing to support Strattam’s investment in Intellect. The Tree Line transaction team was led by Partner Frank Cupido and Senior Associate Raj Muchhala.

Tree Line is an active provider of first-lien term loans, unitranche term loans, and equity co-investments to North America-based lower middle market companies that have EBITDA from $3 million to $30 million and transaction sizes up to $150 million. The Tree Line team has experience across multiple economic cycles – the firm has completed more than 150 transactions for acquisitions, recapitalizations, refinancings, and expansion projects – and has generated significant repeat investment opportunities from private equity sponsors.

Madison Park Group (MPG), a New York City-headquartered technology investment bank, was the financial advisor to Intellect on this transaction. MPG was founded in 2004 by Jonathan Adler and Mir Arif.

© 2022 Private Equity Professional | March 8, 2022

Angeles Equity Partners has acquired RōBEX, a provider of industrial robotics integration services. In tandem with the buy of RōBEX, the company has completed the add-on acquisition of Mid-State Engineering, an automation integrator specializing in mechanical and electrical engineering.

RōBEX is a designer, fabricator, and installer of robotic systems for customers in the consumer goods and logistics industries. The company is an authorized system integrator for FANUC and a key distributor for Mobile Industrial Robots (MiR), Plus One Robotics, AutoGuide Mobile Robots, and Seegrid autonomous mobile robots.

RōBEX, led by CEO Jon Parker, is located near Toledo in Perrysburg, Ohio with a fabrication and service center near Richmond in Aylett, Virginia.

“Angeles represented the ideal partner for our next phase of growth,” said Mr. Parker. “They understand our vision and offer the resources, expertise, and scale that we were looking for to create a leading consolidator in the sector.”

Mid-State is a designer, fabricator, and integrator of mechanical and electrical systems used in commercial, industrial, and manufacturing applications. The company also specializes in traceability, part making, panel fabrication and vision systems for a variety of clients across industries. Mid-State is headquartered north of Indianapolis in Tipton, Indiana.

“Our partnership with RōBEX is a result of a proactive initiative targeting industrial automation and represents a great opportunity to consolidate the fragmented, and increasingly vital, robotics landscape,” said Sam Heischuber, a principal at Angeles. “As evidenced by our concurrent investment in Mid-State, we are focused on growing RōBEX through strategic bolt-on acquisitions.”

Angeles Equity makes control investments in companies with enterprise values up to $200 million that have headquarters and primary operations in the United States and Canada. Sectors of interest include aerospace, automotive, building products, capital goods, chemicals, electronics, manufacturing, metals, transportation and logistics, packaging, and distribution. In January 2017, the Los Angeles-based firm closed Angeles Equity Partners I LP with $360 million in committed capital.

The Peakstone Group was the financial advisor to RōBEX on this transaction.

© 2022 Private Equity Professional | March 8, 2022