Vance’s Micronics Back on the Add-On Trail

Vance’s Micronics Back on the Add-On Trail

To fund the add-on acquisition of National Filter, Vance Street formed and closed its first-ever single asset continuation fund

Micronics Engineered Filtration Group, a portfolio company of Vance Street Capital, has acquired National Filter Media. National Filter was acquired through a corporate carve-out from family-owned Alsco.

To fund the add-on acquisition of National Filter, Vance Street formed and closed its first-ever single asset continuation fund, VSC Extended Value (EV) 1 LP. The continuation fund was oversubscribed, and its limited partners include both new and existing Vance Street investors.

National Filter is a provider of air pollution control and liquid filtration products including filter bags, pleated bags, and various filter accessories.

Customers of the company are active in the agriculture, chemicals, food processing, mining, manufacturing, and pharmaceuticals sectors. Salt Lake City-headquartered National Filter was founded in 1906 and, according to the company, is one of the oldest and largest filter companies in the United States.

“We are thrilled with the outcome of the transaction, which allows us to continue our partnership with Micronics and realize strategic benefits from the acquisition of National Filter, and we are looking forward to partnering with the continuation fund investor group for the new phase in our investment in Micronics. The transaction also allowed us to create a liquidity opportunity for our Fund I limited partners,” said Brian Martin, a managing partner of Vance Street.

Micronics provides aftermarket and OEM filtration products to the mining, chemical, wastewater, metals, pigments and dyes, cement, asphalt, and aggregates, pharmaceutical and biotech, and food and beverage industries. The company was founded in 1983 and is headquartered in Chattanooga, Tennessee.

The combination of Micronics and National Filter creates a company with more than $150 million in revenue, and ten manufacturing, service and office facilities in North America and one in the United Kingdom.

Vance Street first invested and acquired Micronics in 2013 and merged the business in 2014 with Semicoa, a Vance Steet portfolio company that the firm had acquired in 2009. Other add-on acquisitions include Tennessee-based Southern Filter Media (2014), Illinois-based CP Environmental (2015), Pennsylvania-based AeroPulse (2015), and New Jersey-based United Process Control (2015).

“I am excited to welcome National Filter to the Micronics family,” said Chris Cummins, a Vance Street operating partner and president and CEO of Micronics. “Together, we bring over 400 years of combined expertise to the marketplace. I am confident that we will deliver our global customers an unparalleled combination of problem-solving along with filter media, advanced filtration equipment, filtration services, and aftermarket parts.”

Los Angeles-based Vance Street makes control investments in North American-based companies with enterprise values of $30 million to $350 million and EBITDA of $3 million to $30 million. Sectors of interest include medical technology, life sciences, industrial technology, and aerospace & defense. More than 90% of Vance Street’s acquisitions are founder-owned businesses or corporate carve-outs. In December 2021, Vance Street closed its third fund, Vance Street Capital III LP (Fund III), with $432.5 million in commitments, exceeding its target of $375 million.

“The Micronics story is one that perfectly encompasses Vance Street’s playbook,” said Nic Janneck, a partner at Vance Street. “We saw an opportunity to build out a business with mission-critical products that preserve and protect the environment, invested heavily in the right systems to institutionalize the company, and brought in Operating Partner Chris Cummins to execute on our strategic initiatives. National Filter’s reputation, complementary product offering, and footprint gives us the opportunity to create a more diversified and robust aftermarket-focused filtration asset.”

Alsco (American Linen Supply Company), the seller of National Filter, is a provider of linen and uniform rental services to restaurants, health care organizations, and other commercial and industrial companies. Salt Lake City-headquartered Alsco has more than 20,000 employees, 180 locations, and 355,000 customers in 14 countries. The company was founded in 1899 by George Steiner and today is led by CEO Robert Steiner.

Regions Securities was the financial advisor to National Filter on this transaction with debt financing provided by Fidus Capital.

Placement agent M2O was the financial advisor to Vance Street and placed the continuation fund with New 2nd Capital, Unigestion, LSV Advisors, Committed Advisors, and Fidus Capital.

​​© 2022 Private Equity Professional | March 18, 2022

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