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Archives for August 6, 2024

Shore Launches ONDEX Automation with LIVE Buy

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ONDEX Automation, an industrial automation platform formed by Shore Capital Partners, has acquired LIVE Automation. ONDEX was formed by Shore in November 2023, and the acquisition of LIVE Automation is the platform’s first purchase. Shore aims to grow ONDEX into a $100 million annual revenue business.

Chicago-headquartered ONDEX is led by CEO Justin Kerr, an executive with 20 years of experience in the industrial and technology sectors. Before joining ONDEX, Mr. Kerr was vice president and general manager of Molex’s industrial solutions unit, located in the Chicago suburb of Lisle, which specializes in providing connectivity and automation products and services.

LIVE Automation is a provider of manufacturing automation engineering, integration, and construction services. The company’s capabilities include technology consulting, budgeting, scheduling, project management, engineering, and quality control. Many of LIVE’s customers are active in the aerospace and defense, food and beverage, and medical device sectors. LIVE was founded in 2001 by President Mike Barone and is headquartered 50 miles west of Boston in Sterling, Massachusetts.

“I am thrilled to partner with Shore, LIVE Automation, and our renowned board of directors to found ONDEX Automation,” said Mr. Kerr. “Our vision is to create a leading systems integrator that supports our North American manufacturing customer base in end markets that include food and beverage, life sciences, medical device, pharmaceutical, semiconductor, water/wastewater, among others. I look forward to working with Shore Capital and our board of directors to continue partnering with best-in-class systems integrators.”

“The industrial automation sector is a key focus of Shore’s industrial services fund. We are excited to kick off our platform with Justin Kerr and LIVE Automation, and we are eager to partner with business leaders who share our values and vision for growth,” said John Sznewajs, a partner at Shore Capital. Shore closed its inaugural industrial fund, Shore Capital Industrial Partners Fund I LP, in July 2023 with an above-target $207 million of capital commitments.

“Shore and ONDEX are proud and excited to partner with Mike Barone and LIVE Automation as the first partnership for our systems integrator platform. Mike has built a great business with extensive expertise in programmable logic controls and custom automation services and has established a tremendous reputation among their customer base,” said Scott Luby, a vice president at Shore. “Shore’s extensive resources and network will allow us to identify markets and businesses positioned for continued growth, partner with motivated business leaders like Mike Barone, and provide best-in-class innovative services to North American manufacturers.”

Shore Capital invests in lower middle-market healthcare, food and beverage, business services, industrial, and real estate-related companies that have $5 million to $100 million of revenue and $1 million to $10 million of EBITDA.

In April 2019, Shore closed its third healthcare-focused fund, Shore Capital Healthcare Partners Fund III LP, with $293 million of capital, and its inaugural food and beverage fund, Shore Capital Food & Beverage Partners Fund I LP, with $148 million of capital. Shore Capital is headquartered in Chicago with an additional office in Nashville.

© 2024 Private Equity Professional | August 6, 2024

Behrman to Sell kSARIA to ITT for $475 Million

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After a 4.5 year hold, Behrman Capital has agreed to sell its portfolio company kSARIA Holdings to ITT for $475 million.

kSARIA is a provider of interconnect products and services used in avionics, sensors, communications, and networking applications, including fiber optic and electrical cable assemblies and harnesses, RF and microwave assemblies, and flexible metal conduit assemblies.

Source: kSARIA

kSARIA also offers a range of services including design, fabrication, installation, training, and logistics management.

Behrman acquired kSARIA in October 2018 and closed four add-on acquisitions: Compulink Cable Assemblies, a Florida-based maker of high-reliability cable assemblies and harnesses used in aerospace and defense applications (October 2019); Co-Operative Industries Aerospace & Defense, a Texas-based manufacturer of electrical wiring harnesses and ignition leads (October 2019); Top Flite Components, a Florida-based maker of electrical interconnect products (August 2022); and Charles E. Gillman Company, an Arizona-based manufacturer of high-reliability electrical cables and harnesses used in military ground vehicles and other ruggedized applications (February 2024).

Today, kSARIA has $175 million in annual revenue, approximately 1,000 employees, and 6 manufacturing facilities in North America. kSARIA, led by CEO Tony Christopher, was founded in 2000 and is headquartered 45 miles north of Boston in Hudson, New Hampshire.

“Behrman Capital has been an excellent partner to the kSARIA team,” said Mr. Christopher. “Their vision for the company’s growth strategy and approach to due diligence on acquisition candidates added a tremendous amount of strategic value that enabled us to offer an increasingly deep portfolio of highly customized connectivity solutions to our customers, who require the highest quality products to meet their mission-critical needs.”

“We are incredibly proud of kSARIA’s remarkable growth and achievements during our ownership,” said Grant Behrman, a managing partner at Behrman Capital. “The four add-on acquisitions consummated by the company have created a highly differentiated market leader in high-reliability connectivity solutions for Mil/Aero customers. We believe the business is exceptionally well-positioned for further growth under its new ownership and we commend Tony Christopher and the management team for their innovative leadership, wishing them success in the future as part of ITT.”

Behrman Capital invests in management buyouts, leveraged buildups, and recapitalizations of established growth businesses that are active in defense and aerospace, healthcare, and specialty industrial sectors. New York City and San Francisco-based Behrman Capital has raised more than $4 billion since its founding in 1991 and is currently investing out of its seventh fund.

Source: kSARIA

ITT will add the operations of kSARIA to its Connect & Control Technologies (CCT) group. “kSARIA is a great addition to our CCT connector portfolio. The company has leading positions on marquee defense programs and long-standing relationships with its customers,” said Luca Savi, the CEO of ITT. “kSARIA has a proven history of high-teens organic growth at attractive EBITDA margins, and multiple tailwinds to drive long-term sustainable growth, including defense modernization. Like ITT, kSARIA develops customized solutions for harsh environments, which are highly complementary to our existing connector portfolio. kSARIA is also uniquely positioned to capitalize on the industry transition from electrical to fiber required for high bandwidth data transmission and weight reduction.”

ITT (NYSE: ITT) is a diversified manufacturing company specializing in components used in transportation, industrial, and aerospace applications, including pumps, valves, monitoring and control systems, shock absorbers, brake components, and connectors. ITT was founded in 1920 and is headquartered in Stamford, Connecticut. The company had annual revenue of $3.3 billion in 2023.

The sale of kSARIA is expected to close by the end of the third quarter of 2024.

© 2024 Private Equity Professional | August 6, 2024

Stellex Forges Ahead with Carve Out from Arcosa

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Stellex Capital Management has agreed to acquire McConway & Torley and Standard Forged Products (together MTSF) from publicly traded Arcosa.

McConway & Torley (MT) specializes in manufacturing steel castings for the railroad industry, including couplers, yokes, and knuckles. In the railroad industry, couplers connect train cars, yokes support and align the couplers, and knuckles are the pivoting parts of couplers that lock cars together.

Source: McConway & Torley / Standard Forged Products

MT, led by President Michael Mooney with more than 300 employees, was founded in 1869 and is headquartered in Pittsburgh, with an additional facility near Philadelphia in Kutztown, Pennsylvania.

Standard Forged Products (SFP) specializes in manufacturing axles, crankshafts, and other parts used in railroads, trucks, and heavy machinery applications. The business, with 130 employees, operates in Pittsburgh and McKees Rocks, Pennsylvania.

Arcosa (NYSE: ACA) was formed in November 2018 through the spinout of the infrastructure-related businesses of Trinity Industries. Today, Dallas-headquartered Arcosa is a provider of infrastructure-related products, including natural and recycled aggregates used in construction; engineered structures used by utilities, including wind towers and telecommunication towers; and transportation products for inland barges, marine applications, and railcar components. Arcosa had $2.3 billion in revenues in 2023.

“We see tremendous potential in the company’s capabilities and are committed to investing in its future,” said Michael Livanos, a managing director at Stellex. “This acquisition aligns with our strategy of applying operational expertise in an effort to drive growth in critical manufacturing sectors. Additionally, it reinforces our dedication to the Pittsburgh region, complementing our local office opened in 2022 and marking our second investment in a Pittsburgh-based company.”

In November 2022, Stellex acquired A. Stucki Company, a Pittsburgh-based maker of railcar parts including bearings, yokes, and springs; control products including shock absorbers and end-of-car cushioning units; and braking systems used by Class 1 railroads, OEMs, and private railcar owners.

In tandem with the acquisition of McConway & Torley and Standard Forged Products, Stellex has named 25-year industry veteran David Meyer as CEO of the company. Mr. Meyer’s rail industry experience includes roles as President of the Industrial Group and Group Executive of the Transit sector at Wabtec, and Executive Chairman at A. Stucki Company. He has also held senior executive positions at Stone Canyon Industries Rail and American Track Services.

“The team’s expertise in engineered solutions sets it apart in the industry,” said Mr. Meyer. “We’re eager to build on the company’s 150-year legacy, continue to provide excellent service to existing customers, and explore new opportunities for growth. As we enter this new chapter, I’m excited to lead this talented workforce as they expand capabilities and reach new markets.”

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.

Evercore was the financial advisor to Arcosa on this transaction.

© 2024 Private Equity Professional | August 6, 2024

Palladium Gets a New President

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Palladium Equity Partners has promoted Partner Daniel Ilundain to President. Mr. Ilundain has a 21-year history with Palladium, beginning in 2003 as an investor in Palladium when he was an investment manager at BBVA, a Spain-based private equity firm. He joined Palladium in 2005 and currently serves as co-head of Palladium’s middle-market-focused Flagship Funds.

Mr. Ilundain currently serves on the boards of directors of Palladium portfolio companies Accupac, Health Connect America, and Superior Environmental Solutions, and has served as a director of more than a dozen other Palladium portfolio companies.

“Palladium is an extraordinary firm that has been executing a consistent, profitable strategy over decades,” said Mr. Ilundain. “I am very excited to lead Palladium into the future as we strive to continue to deliver strong returns by investing in consumer, services, industrial, and healthcare businesses, especially those addressing the fast-growing U.S. Hispanic market, where we have unparalleled industry experience and expertise.”

Palladium’s Flagship Funds invest from $50 million to $150 million of control equity in United States-based companies that have $10 million to $75 million of EBITDA and are active in the consumer, services, industrial, and healthcare sectors. Palladium’s latest Flagship Fund, Palladium Equity Partners VI LP, has not held a final close and is reportedly targeting $1.5 billion in capital.

“For two decades, Daniel has been an integral part of Palladium, contributing significantly to the success of Funds II, III, IV, and V,” said Marcos Rodriguez, the chairman and chief executive officer of Palladium. “His leadership has been instrumental in doubling our value creation pace over the past five years, and he has consistently demonstrated a singular ability to inspire our investment team to new levels of excellence. Daniel is one of the best private equity investors and natural leaders that I have ever known. This is a well-deserved promotion and a testament to Daniel’s dedication and the tremendous value he and our team have created for our investors.”

Palladium was founded in 1997 by Mr. Rodriguez and has invested in over 210 middle-market companies (40 platforms and more than 170 add-ons) with a focus on the U.S. Hispanic market, founder/family-owned businesses, and companies in fragmented industries.

“Over the past 20 years, Marcos’ mentorship and partnership have been instrumental in the growth and development of the firm and its people, and I am excited to continue our work together,” concluded Mr. Ilundain.

Palladium Equity Partners is headquartered in New York City.

© 2024 Private Equity Professional | August 6, 2024

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