Trachte, a portfolio company of Palladium Equity Partners, has acquired Parkline, a portfolio company of Summit Park.
Trachte is a manufacturer of preassembled and modularized control buildings that are used by utilities to house electrical components that control and protect electrical infrastructure, such as transmission and distribution substations.
Beyond the utilities’ market, Trachte buildings are used in industrial applications to house relay and protection controls, switchgear, battery systems, servers, and data center hardware that control and protect electrical infrastructure and equipment.
Trachte, led by CEO Shawn Smith, was founded in 1919 and is headquartered 13 miles south of Madison in Oregon, Wisconsin, with an additional manufacturing facility 100 miles northeast of Atlanta in Eastanollee, Georgia. Palladium acquired Tachte in September 2020 from MPE Partners.
Parkline is a manufacturer of metal buildings for industrial and commercial applications. Parkline specializes in the production and erection of smaller buildings – widths of less than 32 feet – and has more than 70,000 structures in service throughout the United States and Canada.
Parkline is headquartered in Eleanor, West Virginia, with an additional facility near Houston in Hitchcock, Texas.
“Trachte is excited to add the Parkline team, which has already established Parkline as a leading manufacturer and service provider in the data center, electric utility, energy and industrial end markets – sectors that are complementary to Trachte’s existing business,” said Mr. Smith. “This transaction is all about growing with our customers and supporting their important priorities, such as upgrading an aging power grid, expanding data centers, and accelerating the buildout of renewable power systems.”
Summit Park acquired Parkline in May 2012 from an employee stock ownership plan (ESOP) which held a control equity interest in the business. During Summit Park’s ownership term, Parkline broadened its capabilities and expanded into new geographies and end markets. The company grew its manufacturing capacity and capabilities through the add-on buy of the modular metal buildings business of Texas-based Bebco Industries in 2016.
Going forward, Summit Park is maintaining an equity interest in the combined business in partnership with Palladium. “We have enjoyed our longstanding partnership with Parkline and are proud of the evolution and expansion of the business over the time of our investment,” said Bob Calton, co-managing partner of Summit Park. “Bill Estep and the entire Parkline team have done a great job executing the strategic vision of the company, resulting in significant growth and a reputation as a trusted industry leader. Summit Park looks forward to following Parkline’s future success.”
Bill Estep, Parkline’s president and CEO, will continue with the combined business along with other members of the Parkline senior management team. The combination of Trachte and Parkline creates a leader in the protection and control buildings (P&CB) sector with manufacturing capacity in the Mid-Atlantic, Southwest, Wisconsin and Northeast Georgia.
“Trachte has experienced strong growth over the past two years driven by multi-generational industry tailwinds, by delivering unmatched product quality and by adapting to serve the needs of its end users,” said Caleb Clark, a partner at Palladium. “We are pleased to support the Trachte team in their acquisition of Parkline, which will add significant capabilities and enhance its ability to serve a diverse set of customers, helping to advance the company as a leader in the P&CB sector. Since we invested in Trachte in 2020, Parkline has been on our radar as the top candidate to prove out our strategy to grow the business with acquisitions in this highly attractive market.”
Charlotte-headquartered Summit Park invests in lower middle-market companies that have operations primarily based in the Eastern half of the United States and have revenues between $20 million and $150 million, and EBITDA between $4 million and $15 million. Sectors of interest include business and consumer services, light manufacturing, and value-added distribution. Summit Park was founded in 2006 and has made over 40 investments in the lower middle market totaling more than $2 billion in enterprise value.
New York City-based Palladium invests from $50 million to $150 million of equity in companies that have $10 million to $75 million of EBITDA. Sectors of interest include consumer, services, industrials and healthcare, and Palladium specializes in investing in companies that operate in the US Hispanic market. Since its founding in 1997, Palladium has made 38 platform investments and 165 add-on acquisitions.
Stephens was the financial advisor to Trachte and Palladium Equity Partners, and Livingstone Partners was the advisor to Parkline and Summit Park.
© 2023 Private Equity Professional | May 19, 2023
