Archives for October 5, 2023

Warburg Pincus has agreed to invest in iNRCORE, a supplier of electronic components and a portfolio company of TJC. TJC, which acquired iNRCORE in February 2020, will continue as an investor in the company in partnership with Warburg Pincus.

iNRCORE is a manufacturer of catalog and custom magnetic components used to transmit high-speed and mission critical data and power under extreme conditions. The company’s products are used in military, commercial aerospace, manned and unmanned space, industrial, medical, transportation, and power grid infrastructure applications.

iNRCORE’s products go to market under the Vanguard Electronics, Gowanda Electronics, DYCO Electronics, HiSonic, TTE Filters, RCD Components, Bicron Electronics, and Sentran brands. iNRCORE is headquartered near Philadelphia in Bristol, Pennsylvania and has approximately 1,000 employees.

iNRCORE is the former military and aerospace division of Pulse Electronics which was acquired by Oaktree Capital Management in March 2015. In December 2018, as part of the acquisition of Pulse Electronics by Taiwan-headquartered Yageo, the military and aerospace division was spun out as a separate company still owned by Oaktree, known as PulseR. TJC acquired PulseR in February 2020 and renamed the business iNRCORE in July 2020.

Under TJC ownership the company has closed four add-on acquisitions including Bicron Electronics, a Connecticut-based maker of transformers and solenoids (September 2020); Gowanda Components Group, a New York-based maker of inductors, transformers, toroids and solenoids, and magnetic devices, and a portfolio company of Addison Capital Partners (December 2020); Vanguard Electronics, a California-based maker of inductors and transformers (June 2022); and Sentra Corporation, an Oregon-based maker of transformers and transducers (May 2023).

“The iNRCORE family of brands are engineering, customer and culturally focused businesses that bring high-reliability solutions to their customers,” said Erik Fagan, a Partner at TJC. “We are excited to continue supporting Sarah Trezza and the iNRCORE team in partnership with Warburg Pincus.”

“Since our partnership with TJC in 2020, we have been able to join the best-in-class names in high-reliability magnetics design and manufacturing under one platform,” said Sarah Trezza, the president and chief executive officer of iNRCORE. “Together we are working to solve the most complex signal and power conditioning problems in markets that demand excellence. We see significant opportunities to continue to grow iNRCORE and we are excited to be able to partner with both Warburg Pincus and TJC to continue this trend.”

TJC (formerly The Jordan Company) is a middle-market private equity firm that invests in a range of industries including industrials, transportation and logistics, healthcare, consumer, telecom, technology, and utilities. The firm was founded in 1982 and is headquartered in New York City with additional offices in Chicago and Stamford.

Warburg Pincus was founded in 1966 and has raised 21 private equity and 2 real estate funds, which have invested more than $112 billion in over 1,000 companies in more than 40 countries. The firm is headquartered in New York with offices in Amsterdam, Beijing, Berlin, Hong Kong, Houston, London, Luxembourg, Mumbai, Mauritius, San Francisco, São Paulo, Shanghai, and Singapore.

“With the growing secular trends of increased electrification and need for connectivity in aerospace and high-reliability industrial applications, iNRCORE has significant growth opportunities ahead,” said Dan Zamlong, a managing director at Warburg Pincus. “The company’s indispensable products, facilitating mission-critical power and signal transmission, are backed by a strong management team and outstanding customer service. We are thrilled to partner with Sarah and the iNRCORE team, alongside TJC, to build upon iNRCORE’s history of success to expand its offerings in this dynamic market.”

William Blair & Company and Jefferies Group are the financial advisors to TJC and iNRCORE while BMO Capital Markets is the financial advisor to Warburg Pincus.

© 2023 Private Equity Professional | October 6, 2023

Resonetics has closed the add-on acquisitions of Memry Corporation and SAES Smart Materials from Italy-headquartered SAES Getters for $900 million. Resonetics is a portfolio company of GTCR and Carlyle.

GTCR’s investment in Resonetics is through Regatta Medical which was formed by GTCR and operating executive Chip Hance in April 2017 to acquire medical device manufacturing companies. Regatta acquiring Resonetics from Sverica Capital Management in February 2018. Caryle invested in Resonetics in December 2021.

Memry and Smart Materials (together Memry) are providers of Nitinol-based medical devices and industrial components, and Nitinol material and alloys in milled, wire and strip, tube and sheet formats. Nitinol is an alloy of nickel and titanium with “shape memory” properties. A device made from Nitinol can remember its original shape and return to it when heated.

Memry’s medical products include neurovascular hypotubes, implantable and single use cardiovascular devices, orthodontics wires and brackets, orthopedic medical devices and urology and endoscopy devices. The company has approximately 600 employees and operates facilities in Bethel, Connecticut; New Hartford, New York; and Menlo Park, California. Post closing, both Memry and Smart Materials will be rebranded as Resonetics.

Milan, Italy-headquartered SAES Getters, the seller of Memry, specializes in the development and production of advanced materials and technologies used in various industrial and scientific applications. The company’s primary business is manufacturing getter materials, which are substances capable of trapping and removing trace gases and impurities from sealed environments, such as vacuum systems, electronic devices, and lighting products.

According to SAES Getters, the purchase price of $900 million is equal to approximately 17x the TTM adjusted EBITDA for Memry from October 2021 to September 2022.

Resonetics is a provider of micro-machining manufacturing services including laser processing, nitinol processing, centerless grinding, thin-wall stainless steel and precious metal tubing, photochemical machining, microfluidics, sensor solutions, and medical power.

The company’s capabilities include precision laser prototyping and manufacturing that can create features as small as one micron – a fraction of a human hair – in a variety of materials. According to Resonetics, it has the world’s largest capacity for laser micro-machining polymers in ultra-violet wavelengths. The company also designs, builds and services purpose-built laser workstations to meet specific customer needs.

Resonetics, founded in 1987 and led by CEO Kevin Kelly, is headquartered near Boston in Nashua, New Hampshire with 17 facilities and more than 2,600 employees in the United States, Canada, Costa Rica, Israel, and Switzerland.

“Memry and SAES Smart Materials have built a legacy as critical suppliers of nitinol mill products, semi-finished materials, and complex components and implants to the medical device industry,” said Mr. Kelly. “Nitinol is a key growth driver for Resonetics, and we’re excited to expand upon our existing nitinol processing capabilities with these acquisitions so that we can provide a more complete and cost-effective nitinol solution. We believe that further investment in both businesses will allow us to expand our capacity and capabilities so that we can better serve the needs of our customers and build upon their strong market potential.”

Since its founding in 1980, Chicago-based GTCR has invested more than $24 billion in over 270 companies. Sectors of interest include business services; technology, media & telecommunications; healthcare, and financial services & technology. In November 2020, GTCR closed its thirteenth fund, GTCR Fund XIII LP, with $7.5 billion of limited partner capital commitments. The new fund, raised in just five months, is the largest investment fund in GTCR’s history. GTCR is based in Chicago with offices in New York City and West Palm Beach.

Carlyle (NASDAQ: CG) invests worldwide in buyouts, growth capital, real estate, and leveraged finance. With $381 billion of assets under management, the firm has more than 2,200 employees in 29 offices across five continents and is based in Washington DC.

© 2023 Private Equity Professional | October 6, 2023

 Mill Point Capital has sold Avenu Insights & Analytics, a provider of software used by governments for administration and revenue collection, to Arlington Capital Partners. Mill Point first invested in Avenue in January 2017.

Avenu’s products are used by more than 4,000 state and local governments to aid in the identification and collection of permits, license fees, and sale and use taxes; and to streamline internal operations, improve services, and improve online access to records. Centreville, Virginia-headquartered Avenu has more than 600 employees and is led by CEO Paul Colangelo.

“Mill Point created Avenu through two corporate carveout transactions – the 2017 acquisition of PRA’s government services division and the 2018 purchase of Conduent’s local and municipal government software business,” said Dustin Smith, a partner at Mill Point. “We have worked tirelessly with Paul and his team to create a true market leader in this fragmented industry.”

“Avenu offers an attractive platform from which to build upon given their robust product offering and strong leadership position in the highly fragmented state and local government markets,” said Michael Lustbader, a managing partner at Arlington Capital. “The company’s software maximizes revenue without raising taxes, simplifies government processes and meaningfully reduces costs, while providing greater transparency and an improved experience for citizens. We are excited to partner with Paul Colangelo and the broader Avenu leadership team as we further invest in and grow the business.”

Chevy Chase, Maryland-based Arlington Capital invests in government-regulated industries and adjacent markets including aerospace and defense; government services; and technology, healthcare, and business services. Arlington closed its $1.7 billion fifth fund in June 2019 and is currently raising its sixth fund which has a $3.5 billion target. The firm’s buy of Avenu was made through Fund VI. In February 2021, Goldman Sachs Asset Management made a non-voting minority equity investment in the firm.

“Partnering with Arlington Capital is an important step in Avenu’s growth trajectory. Arlington’s long history of success in government and software investing, combined with their robust experience and sterling reputation, make them the ideal investment partner,” said Mr. Colangelo. “Together we plan to further invest in and expand our product offering and capabilities while continuing our high standards of service and commitment to our customers.”

New York City-based Mill Point makes control-oriented investments in North America-based lower middle-market industrial, business services, and IT services companies. Mill Point closed its second fund, Mill Point Capital Partners II LP, at its hard cap of $886 million in February 2021. The firm’s inaugural institutional fund, Mill Point Capital Partners LP, closed at its hard cap of $450 million in May 2018.

“We are incredibly proud of the successful partnership with Paul and the entire Avenu team, as well as the many value creation plan achievements during our investment period,” added Mark Paolano, a partner at Mill Point.

“We highly value our joint accomplishments with the Avenu team which have positioned the company for long-term growth and market leadership,” said Chris Hearing, an operating partner at Mill Point.

Lincoln International was the financial advisor to Avenu on this transaction.

© 2023 Private Equity Professional | October 6, 2023