L Squared to Sell GWS Tool to Sandvik

L Squared to Sell GWS Tool to Sandvik

L Squared acquired GWS in 2019 and executed a consolidation strategy with seven add-on acquisitions that grew revenues to nearly $100 million

GWS Tool is a vertically integrated manufacturer of custom and standard consumable cutting tools and taps that are used in the aerospace, defense, power generation, automotive, and medical sectors


Publicly traded Sandvik has agreed to acquire GWS Tool Group from L Squared Capital Partners.

GWS Tool is a vertically integrated manufacturer of custom, standard, and modified standard consumable cutting tools and taps that are used in the aerospace, defense, power generation, automotive, and medical sectors. The company, led by CEO Rick McIntyre, has 490 employees and is headquartered near Orlando in Tavares, Florida.

“L Squared has been an excellent partner for our rapid growth trajectory,” said Mr. McIntyre. “L Squared has provided the necessary resources to achieve our primary objective of becoming one of the premier metalworking companies in the world. I’d like to thank them for the great partnership that has culminated in this outstanding result for all stakeholders.”

Publicly traded Sandvik (NASDAQ: SAND) is a multinational engineering company specializing in metal cutting, digital and additive manufacturing, mining and construction, stainless and special steel alloys, and industrial heating. The company, with annual revenues of more than $9 billion, was founded in Sweden in 1862 and is headquartered in Stockholm.

“With the acquisition of GWS, we take an important step in our shift to a growth strategy where we have a clear ambition for our machining solutions business to increase market share in round tools and to enhance our presence in the North American market,” said Stefan Widing, the CEO and president of Sandvik.

Post-closing, GWS will continue to be led by Mr. McIntyre and will operate as a standalone entity with its own salesforce and brand part of Walter Tools, a division of Sandvik’s machining solutions group. GWS primarily sells made-to-order products, such as polycrystalline diamond (PCD) tools and taps, which are complementary to Walter’s standard metal cutting tools and tooling systems. Like GWS, an earlier acquisition by Walter Tools was the January 2020 buy of Melin Tool Company, a Cleveland-based maker of carbide and high-speed steel (HSS) end mills, drills and countersinks used in the aerospace and medical sector.

“I am very pleased that we have reached an agreement to acquire GWS, as it will significantly increase our presence in the US and strengthen our solid carbide tools offer in this key market,” said Richard Harris, the president of Walter Tools.

GWS Tool was formed by Addison Capital Partners in August 2014 to acquire Florida-based GW Schultz Tool. Addison Capital added on to the business with the buys of Indiana-based CGI Tool (December 2017); Michigan-based Alliance CNC (January 2018); and Massachusetts-based Benchmark Carbide (August 2018). L Squared acquired GWS Tool from Addison Capital in September 2019.

According to L Squared, a cornerstone of its GWS Tool investment thesis was the opportunity to continue the consolidation of the fragmented high-performance cutting tool sector. Under L Squared, GWS Tool closed seven add-on acquisitions which grew the company’s revenue to nearly $100 million. These seven add-ons include Arizona-based Intrepid Tool (January 2020); Illinois-based North American Tool (January 2020); North Carolina-based STF Precision (October 2020); Illinois-based Taurus Tool & Engineering (January 2021); and Illinois-based CJT Koolcarb and its polycrystalline diamond operating subsidiary, GenHam Diamond Tools (April 2021); Canada-based Indexable Cutting Tools (June 2021); and California-based Monster Tool Company (August 2021).

“We are grateful for our partnership with the executive leadership team at GWS, notably Rick McIntyre as CEO,” said Randall Hunt, a partner at L Squared. “Rick’s leadership and vision enabled GWS to expand rapidly while creating an unmatched value proposition for GWS customers.”

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. In September 2020, L Squared closed its oversubscribed third fund, L Squared Capital Partners III LLC, with just over $500 million of capital. L Squared was founded in 2014 and is headquartered in Newport Beach, California.

BlackArch Partners was the financial advisor to GWS and L Squared on this transaction which is expected to close during the fourth quarter of 2021.

© 2021 Private Equity Professional | December 3, 2021

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