Pfingsten Partners has sold its portfolio company Dynapower to publicly traded Sensata Technologies for $580 million in cash.
Dynapower is a designer and manufacturer of energy storage and power conversion systems including inverters, converters, rectifiers and custom transformers for renewable energy generation, green hydrogen production, electric vehicle charging stations, and microgrid applications, as well as industrial and defense applications.
Dynapower, led by CEO Adam Knudsen, was founded in 1963 and has 200 employees with a headquarters in South Burlington, Vermont. Pfingsten acquired Dynapower in December 2012 through its $525 million fourth fund.
Sensata Technologies (NYSE: ST) manufactures and sells sensors and controls used in the automotive, heavy vehicle & off-road, industrial, and aerospace markets. The company’s products are used for tire pressure monitoring, thermal management, electrical protection, regenerative braking, powertrains, exhaust management, motor and compressor protectors, high-voltage contactors, charge controllers and battery management. Sensata was founded in 1916 and has more than 21,000 employees and operations in 13 countries with a headquarters in Attleboro, Massachusetts.
Sensata estimates that Dynapower will have annual revenues in 2022 of $100 million with an estimated EBITDA of $20 million. This results in a 29x forward-looking EBITDA valuation multiple.
“We are very pleased to bring Dynapower’s leading energy storage and power conversion solutions into Sensata’s portfolio through this acquisition,” said Jeff Cote, the CEO of Sensata. “Dynapower enables us to deliver highly engineered, mission-critical power conversion solutions to fast-growing renewable energy storage, electric vehicle charging, industrial and defense customers and provide a foundational piece to accelerate our electrification growth vector.”
“Our strategy from the outset was to leverage Dynapower’s technology to build a global leader in the nascent energy storage market,” said Jim Norton, a senior managing director at Pfingsten. “Since our initial investment, we supported the business with significant investments in engineering, product development, people and systems to successfully position Dynapower as a mission-critical supplier to the renewable energy generation, hydrogen and EV charging station markets.”
“Pfingsten’s operating resources and continued investments were critical in enabling our company to successfully partner with leading participants in emerging clean energy markets,” said Mr. Knudsen. “Dynapower is now playing an important role in advancing a clean energy future as a trusted partner with leading energy storage, hydrogen and EV charging station companies.”
“Adam and his Dynapower team did a terrific job identifying engineering investments critical to placing the company at the forefront of its clean energy markets,” said John Underwood, a senior managing director at Pfingsten. “We wish Adam and the Dynapower team continued success with Sensata.”
Chicago-based Pfingsten invests in middle-market manufacturing, distribution and business services companies that have transaction values ranging from $15 million to $100 million, revenues from $20 million to $150 million, and EBITDA between $3 million and $12 million. Since completing its first investment in 1991, Pfingsten has acquired 156 such companies through five funds with total commitments of $1.3 billion.
Cowen and Company was the financial advisor to Dynapower.
© 2022 Private Equity Professional | July 19, 2022
