L Squared Jumps on Cutting Tool Consolidation

L Squared Jumps on Cutting Tool Consolidation

GWS Tool Group, a portfolio company of L Squared Capital Partners, has closed two add-on acquisitions with the buys of Intrepid Tool Industries and North American Tool Corporation.

L Squared acquired GWS Tool Group, in partnership with the company’s existing financial sponsor, Addison Capital Partners, and the GWS Tool senior management team, in September 2019.

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, Florida-based GW Schultz Tool (acquired in August 2014); Chesterfield, Indiana-based CGI Tool (acquired in December 2017); Grand Rapids, Michigan-based Alliance CNC (acquired in January 2018), and Springfield, Massachusetts-based Benchmark Carbide (acquired in August 2018). The company, led by CEO Rick McIntyre, is headquartered near Orlando in Tavares, Florida.

Intrepid Tool is a maker of carbide, high speed steel (HSS), and polycrystalline diamond (PCD) cutting tools – including construction drills, reamers and countersinks – used in the aerospace sector. The company has more than 100 employees and operates out of a 35,000 square foot facility located near Phoenix in Surprise, Arizona.

North American Tool Corporation (NATC) is a maker of threading tool products, including special taps, carbide thread mills, threading dies and thread gages made from high speed steel (HSS), carbide, particle metal steel (PM) or high-speed steel ‘exotic’ (HSSE). NATC was founded in 1986 and is based north of Rockford in South Beloit, Illinois.

“These first two deals are great milestones on our path to building GWS into one of the most dynamic and valuable metalworking organizations in the world,” said Mr. McIntyre. “Both companies bring strategic value and an unmatched reputation for product quality and customer service.”

“We’re off to a great start with GWS.  These first two deals are a testament to the fragmented landscape and further builds GWS’ reputation as the acquirer of choice,” said Randall Hunt, a partner at L Squared and GWS board member. “We have a strong pipeline of additional targets and are committed to providing the necessary resources to aggressively pursue these transactions.”

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. L Squared was founded in 2014 and is headquartered in Newport Beach, California.

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, Florida.

© 2020 Private Equity Professional | February 4, 2020

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