P&F Industries has agreed to be acquired by ShoreView Industries in an all-cash transaction which values the company at $50 million.
P&F Industries operates through two wholly-owned subsidiaries, Hy-Tech Engineered Solutions and Florida Pneumatic, and is a manufacturer and importer of air-powered tools and accessories sold principally to the aerospace, industrial, automotive, and retail markets. Hy-Tech is headquartered in Pittsburgh, Pennsylvania, and Florida Pneumatic’s US operations, assembly and distribution facility is located in Jupiter, Florida, and its UK and European operations – Universal Air Tool Company – is located near London in High Wycombe, UK.
P&F’s products include sanders, grinders, drills, saws, and impact wrenches (powered socket wrenches) that are sold under the Florida Pneumatic, Universal Tool, Jiffy Air Tool, AIRCAT, and NITROCAT brands; as well as under the private labels of major manufacturers and retailers.
P&F Industries also designs, manufactures, and distributes industrial tools, pneumatic systems, gearing products, accessories, and replacement parts under the ATP, NUMATX, Thaxton, and Power Transmission Group brands directly to original equipment manufacturers, as well as through a network of specialized industrial distributors serving power generation, petrochemical, aerospace, construction, railroad, mining, ship building, and fabricated metals industries. P&F was founded in 1963 and is headquartered on Long Island in Melville, New York.
Through September 2023, P&F’s TTM financial results are $59 million in revenue, $20 million in gross profit and $2.8 million in EBITDA. Based on a $50 million enterprise valuation, this equates to a 17.9x valuation multiple. As recently as 2021, P&F had revenues of $54 million and EBITDA of $4.9 million.
“We are pleased to reach this agreement with ShoreView, which provides significant premium cash value to our shareholders,” said Richard Horowitz, the chairman of the board, chief executive officer and president of P&F. “Following comprehensive outreach to potential parties, our board determined that ShoreView is the right partner for P&F that brings deep knowledge within the manufacturing industry. As a private company, the company will have additional financial and operational flexibility to pursue our strategy to better serve customers across our markets.”
“P&F brands are backed by talented teams that have worked hard to establish their reputation as a customer-focused, leading engineered solutions manufacturer,” said Tom D’Ovidio, a partner at ShoreView. “Through this partnership, we look forward to leveraging our sector expertise and resources to continue building on P&F’s longstanding heritage of providing high value tools for customers.”
ShoreView invests up to $100 million in equity in companies that have revenues from $20 million to $300 million and EBITDA from $4 million to $25 million. Sectors of interest include niche manufacturing, value-added distribution, business services, residential services, industrial services, niche consumer, and aerospace and defense.
ShoreView will finance the acquisition of P&F, which is expected to close in the fourth quarter of 2023, through committed debt financing and with equity from its fourth fund, ShoreView Capital Partners IV LP, which closed in March 2020 with $425 million in capital.
East Wind Securities is the financial advisor to P&F on this transaction.
P&F’s agreement with ShoreView has been unanimously approved by the P&F board of directors.
© 2023 Private Equity Professional | October 17, 2023
