After Strong Revenue Growth, Stellex Sells Continental Global to PPI

Stellex Capital Management has sold Continental Global Material Handling (CGMH) to Precision Pulley & Idler.

CGMH is a designer and manufacturer of material handling conveyor systems and components used in a variety of industrial end markets including metals and mining, industrial processing, and aggregates, with specific systems in use in the copper, steel, coal, potash, and salt industries. CGMH was founded in 1959 and is headquartered northwest of Birmingham in Winfield, Alabama. The business operates out of two manufacturing facilities, one each in Alabama (240,000 sq. ft.) and Australia (65,000 sq. ft.).

CGMH was acquired by Stellex, in partnership with Rich Meacci (co-president and CFO) and Mark Rodgers (co-president and COO) in a carve-out transaction from Komatsu Mining Corp in 2021. During its ownership term, the company rebuilt its sales network; and implemented several operational initiatives, including lean operations, automation, and strategic sourcing. As a result, CGMH’s U.S. sales more than tripled in less than three years, and the company realized substantial efficiencies that improved profitability.

“We are truly grateful for the partnership with Rich, Mark, and the exceptionally talented team at CGMH,” said Catherine DeMarco, a vice president at Stellex. “We recognized early on the opportunity to create value by revitalizing the company’s sales efforts and executing strategic operational improvement initiatives, and we are proud to have supported them on this remarkable journey.”

“We would like to congratulate the entire CGMH team for their achievements over the past three years under Stellex’s ownership,” said Michael Livanos, a managing director at Stellex. “The sale to Precision Pulley & Idler is a testament to their hard work and successful execution of the strategic initiatives we identified at acquisition. It has been a privilege working alongside this talented team, and we wholeheartedly wish them continued success in their next chapter.”

Employee-owned Precision Pulley & Idler specializes in conveying components including idlers, drum and wing pulleys, impact systems, bearings, and speed switches used in a range of industries including aggregate, mining, forestry, grain, and food processing. Headquartered in Pella, Iowa, the company is led by CEO Matt Buckingham and operates 25 facilities with a combined manufacturing space of over one million square feet.

“Continental has earned its position as one of the most well-respected brands in the industry. We couldn’t be more excited to welcome the Continental management team and employees into our growing company,” said Mr. Buckingham. “We believe the two businesses are stronger together than apart. The combination of Precision Pulley & Idler and Continental’s complementary product lines will allow us to enhance our offerings to the customer, backed by our combined conveying expertise, quality products, and industry-leading customer service.”

New York City-headquartered Stellex invests from $50 million to $150 million in United States or Europe-based companies with enterprise values from $50 million to $500 million and revenues greater than $100 million. Sectors of interest include specialty manufacturing, industrial and business services, aerospace and defense, automotive, government services, transportation, logistics, and food. Stellex has additional offices in Detroit, Pittsburgh, and London.

Houlihan Lokey was the financial advisor to Stellex and CGMH on this transaction.

© 2024 Private Equity Professional | July 2, 2024