Seven Mile Capital Partners has entered into an agreement to acquire Microporous Products from Polypore International for $120 million. The transaction is expected to close in the fourth quarter of 2013.
In addition to Seven Mile Capital Partners, a group of family office investors, including Trent Capital Partners (Naples, FL) (www.trentequity.com) and Bratenahl Capital Partners (Cleveland, OH) (www.bratenahlcapital.com) are also contributing a minority portion of the equity capital.
Polypore International acquired Microporous Products through its Daramic subsidiary in March 2008. Polypore is selling Microporous pursuant to a Federal Trade Commission divestiture order filed in 2008 charging that the acquisition hurt competition for membranes that separate the positive and negative plates in batteries used to power golf carts, forklifts and cars.
Microporous Products is a developer, manufacturer and marketer of rubber, polyethylene and hybrid battery separators for flooded lead-acid batteries. The company’s separators are used by battery manufacturers for applications such as golf cart batteries, forklift batteries, standby power and Starting Lighting and Ignition (“SLI”) batteries for automobiles and trucks. Microporous’ product line includes the Flex-Sil, Ace-Sil, and CellForce brands in addition to polyethylene separators for industrial and polyethylene automotive applications. The company supplies major North American and European lead acid battery manufacturers, and maintains a customer base located across 23 countries and five continents. Microporous currently has 153 employees and operates plants in Piney Flats, TN and in Feistritz, Austria (no website found).
Upon the close of the transaction, Mr. Jean-Luc Koch will assume the role of Chief Executive Officer of Microporous. Mr. Koch has 16 years of experience in the battery separator industry.
“Microporous is a terrific company and market leader. We feel very strongly that the company is poised for strong growth and believe the management team, led by Jean-Luc Koch, has the deep industry knowledge and experience necessary to lead the company into its next phase of growth and innovation as an independent company,” said Kevin Kruse, Partner of Seven Mile. “In addition, Microporous fits very well into our investment criteria and industry focus and is a great foundation for the launch of our second fund, as Seven Mile has significant industry experience in the power and automotive industries.”
Seven Mile Capital Partners invests in middle-market companies with EBITDA’s of $5 million to $50 million. Sectors of interest include consumer products, financial services, business outsourcing, renewable energy, cleantech, recycling, healthcare and technology. Seven Mile Capital Partners was formed in 2011 and is based in New York (www.sevenmilecp.com).
FDX Capital (www.fdxcapital.com), a broker-dealer affiliate of Family Office Exchange, acted on behalf of Seven Mile in placing the equity provided from some of the family office investors.
The underwritten debt financing will be provided by KeyBanc Capital Markets and Kayne Anderson Capital Advisors.
“Seven Mile has been extremely impressed with the Microporous employees and management team. We believe that, with the addition of Jean-Luc Koch as the CEO, Microporous will have a world class executive team with strong operational experience. The company has been an industry leader for decades and as the first investment in Seven Mile Capital’s new fund, we look forward to working with the management of Microporous to build on its strong history of investing in new products and technical services to support their loyal customer base,” said Vince Fandozzi, Managing Partner at Seven Mile.
© 2013 PEPD • Private Equity’s Leading News Magazine • 9-30-13
