Tonka Bay Equity Partners has acquired Standard Locknut, a manufacturer of heavy-duty bearing accessories and components, from Dunes Point Capital. Northstar Capital partnered with Tonka Bay on this transaction and provided debt and an equity co-investment.
Standard Locknut’s products include pillow blocks (cast iron or cast steel bearing housings that are used to support a rotating shaft), locknuts (used to locate components onto a shaft), and adapter sleeves (used to locate roller bearings on a cylindrical shaft). Other components include lockplates, withdraw assemblies, lock washers, seals, and caps.
Standard Locknut’s products are used widely by more than five hundred customers in the heavy construction, paper, mining, industrial, oil field, energy, and automotive end markets. The company, led by President David Zimmer, was founded in 1949 and is headquartered north of Indianapolis in Westfield, Indiana.
“We are excited to partner with Tonka Bay, which brings a great cultural fit, an aligned focus on growth and prior industry experience,” said Mr. Zimmer. “We look forward to joining forces with Tonka Bay to achieve the next level of success at Standard Locknut.”
Dunes Point acquired Standard Locknut in November 2015 through Industrial Group Holdings (IGH), a holding company formed in 2014 to acquire a group of industrial and chemical businesses owned by Alco Industries. Over time, IGH acquired seven companies that were consolidated into five operating platforms: MultiSource Manufacturing, Ehrhardt Automation Systems, Miller Chemicals (sold in April 2016), Haysite Reinforced Plastics (sold in July 2018), and Standard Locknut.
“We look forward to partnering with a very talented management team at Standard Locknut that has created a strong foundation for future growth,” said Kam Kielhorn, a principal at Tonka Bay. “The company has an incredible reputation in the market after delivering high-quality products and service for decades.”
Tonka Bay invests in companies that have at least $10 million in revenue and EBITDA greater than $2 million. Sectors of interest include highly engineered manufacturing, value-added distribution, and business services. The firm was founded in 1998 and is based in the Minneapolis suburb of Minnetonka. Tonka Bay closed its fourth fund, Bayview Capital Partners IV LP, with $200 million of capital in August 2020.
Minneapolis-headquartered Northstar invests from $5 million to $30 million of subordinated debt and/or up to $15 million of equity as a co-investment in sponsored transactions of North American-based companies with EBITDA of at least $3 million. The firm’s sectors of interest include healthcare, industrials, consumer, business services, food and agriculture, outsourcing, and distribution. Northstar’s investment in Standard Locknut is the 24th platform investment made through the firm’s $500 million seventh fund.
Dunes Point is a family office and private investment firm that makes control investments in companies operating in the general industrial and business services sectors that have enterprise values of up to $1 billion. The firm was founded in 2013 by Timothy White, a former senior managing director of credit-focused hedge fund GSO Capital which was acquired in 2008 by Blackstone and renamed Blackstone Credit in 2020. Dunes Point is headquartered in Rye, New York.
Dunes Point was advised by Hennepin Partners (M&A advisor), Kirkland & Ellis (legal advisor), and Alvarez & Marsal (financial advisor).
© 2022 Private Equity Professional | December 1, 2022
