L Squared Capital Partners has acquired GWS Tool Group. L Squared partnered on this transaction with the company’s current financial sponsor, Addison Capital Partners, and the GWS Tool senior management team.
GWS Tool is a vertically integrated manufacturer of custom, standard, and modified standard consumable cutting tools that are used in the aerospace, defense, power generation, automotive, and medical sectors.
GWS Tool operates through Tavares, FL-based GW Schultz Tool (acquired in August 2014); Chesterfield, IN-based CGI Tool (acquired in December 2017); Grand Rapids, MI-based Alliance CNC (acquired in January 2018), and Springfield, MA-based Benchmark Carbide (acquired in August 2018). The company is headquartered near Orlando in Tavares, FL (www.gwstoolgroup.com).
“We are thrilled to partner with the L Squared team to support the continued development of GWS Tool as a powerful player within the cutting tool universe,” said Rick McIntyre, CEO of GWS Tool. “L Squared’s long-term investment horizon will give us the freedom to keep our heads down and focus on our team’s primary objective of being one of the premier metalworking companies in the world.”
“We have been extremely impressed by the company’s track record of growth and commitment to operational excellence – GWS Tool has proven to be a strategic partner with its customers, developing custom solutions for some of the most complex manufacturing environments,” said Randall Hunt, a partner of L Squared. “Our family office capital base and long-term investment horizon are well suited to support the company’s investment in its capabilities and pursuit of accretive acquisitions.” In addition to Mr. Hunt, other members of the GWS Tool transaction team included Managing Partner Jeff Farrero and Vice President Tyler Huez.
L Squared invests from $20 million to $100 million of equity in companies that have revenues of $10 million to $100 million and EBITDA of $3 million to $25 million. Sectors of interest include tech-enabled services and software; industrial technology and services; and education technology. The buy of GWS Tool is L Squared’s tenth platform investment over the last five years. L Squared was founded in 2014 and is headquartered in Newport Beach (www.lsquaredcap.com).
Addison Capital Partners invests in companies with EBITDA of between $1 million and $10 million. Sectors of interest include specialty manufacturers of engineered products and related service providers within the aerospace and defense, medical device, life sciences and semiconductor industries. The firm is headquartered in West Palm Beach, FL (www.addisoncapitalpartners.com).
Varagon Capital Partners is the administrative agent, sole lead arranger, and sole bookrunner on a $74 million unitranche credit facility to support this transaction. “Varagon has proven to be a strategic financing partner for us in getting deals done in this market,” added Mr. Hunt. “We’re thrilled to have them involved in GWS Tool as we pursue acquisitive growth and utilize a flexible debt capital facility to help finance accretive add-ons.” Sam Kwon, a managing director at Varagon, led the transaction.
Piper Jaffray was the financial advisor to GWS Tool.
© 2019 Private Equity Professional | September 18, 2019
