Gemspring Capital Management has acquired Midland Industries, a manufacturer and distributor of pipe, valve, and fitting products, from Wynnchurch Capital.
Midland distributes and manufactures more than 40,000 SKUs of hoses, fittings, valves, and other products used in the industrial, hose, fluid power, plumbing, oil and gas, truck and trailer, and power transmission markets.
Kansas City, Missouri-headquartered Midland, led by CEO John Gerber, is comprised of numerous operating subsidiaries including Anderson Metals, Midland Metal, Buchanan Rubber, Mid-America Fittings, and Stainless Adapters. Midland has over 250 employees and operates 7 distribution facilities in the United States and Canada.
“Midland is at an exciting inflection point in our evolution, and we are thrilled to partner with Gemspring as we pursue numerous growth and innovation opportunities across our product lines,” said Mr. Gerber. “Gemspring’s considerable industrial distribution expertise will drive significant value as we expand our product suite, geographic reach, and end markets to better serve a longstanding customer base that has become accustomed to our exceptional service levels.”
“John and his team have built a best-in-class distribution platform, and we believe that Midland is differentiated in a market where supply chain partnership and operational excellence is critical to customer success,” said Geoff Broglio, a managing director at Gemspring. “We are excited to partner with the Midland team as the company continues to grow its operations and drive product innovation, geographic expansion, and end market diversification.”
Wynnchurch acquired Midland in January 2018 and will maintain a minority equity interest in the company in partnership with Gemspring. During Wynnchurch’s ownership term, Midland closed seven add-on acquisitions and opened distribution facilities in the Southeast and Northwest US.
“Midland represented an opportunity to build an industrial distribution platform with a strong legacy of brands, diverse customer base, and differentiated e‑commerce strategy,” said Greg Gleason, a managing partner at Wynnchurch. “We are proud of what the team has accomplished and are excited to continue our partnership with management and Gemspring during Midland’s next phase of growth.”
Gemspring invests in companies that have revenues of up to $1 billion. Sectors of interest include aerospace and defense; business and consumer services; financial and insurance services; industrial services; software and tech-enabled services; healthcare services and specialty manufacturing.
In January 2023, Gemspring closed two funds, Gemspring Capital Fund III LP, its third buyout fund, at $1.7 billion, and Gemspring Growth Solutions Fund I LP, its first non-control investment fund, at an oversubscribed $400 million. With the closing of these two new funds, Westport, Connecticut-based Gemspring now has $3.4 billion of capital under management.
Wynnchurch makes investments in middle-market companies that have revenues of $50 million to $1 billion. In January 2020, Wynnchurch closed its fifth private equity fund, Wynnchurch Capital Partners V LP, with $2.3 billion of committed capital. The new fund, which began its marketing in September 2019 with a target of $1.6 billion, was oversubscribed and closed at its hard cap. Wynnchurch was founded in 1999 and is headquartered in the Chicago suburb of Rosemont with additional offices in Los Angeles (El Segundo) and New York City.
“Since our investment in 2018, Midland has solidified its position in the industrial distribution market, developing an industry-leading e-commerce platform and building a national footprint of local facilities—all while maintaining an unwavering commitment to customer success,” concluded Mr. Gleason. “We look forward to the next phase of growth for Midland and believe that Gemspring is the ideal partner to drive continued success for the company.”
Harris Williams was the financial advisor to Midland and Wynnchurch on this transaction and Gemspring was advised by KeyBank Capital Markets.
© 2023 Private Equity Professional | September 7, 2023
