Shorehill Capital has sold Power Grid Components to Blackstone.
Power Grid is a designer and manufacturer of components used for protection, monitoring, and safety applications in electrical substations which manage and monitor power flows and convert electricity into different voltages.
Power Grid was formed by Shorehill in September 2017 in partnership with electric utility products veteran Rick McClure to acquire companies that supply products used in the North American electric power grid.
In November 2017, Power Grid made its first acquisitions with the buys of Newell-PSN and PSN Components (Newell/PSN), Ohio-based suppliers of insulators sold to electric utilities and OEMs. Future add-on acquisitions included Instrument Transformer Equipment Corporation (ITEC), a North Carolina-based maker of dry molded and oil-filled instrument transformers (April 2018); Royal Switchgear Manufacturing, an Alabama-based maker of disconnect switches and substation power connectors (December 2019); and Meister International, an Ohio-based distributor of porcelain and polyester insulators, bushings, and other utility hardware (November 2022).
Today, Power Grid’s products include porcelain, glass and polymer insulators; air-break switches; metering units; current and voltage transformers; and other power grid components sold under the ITEC, Newell PSN, Meister International and Royal Switchgear brands.
Power Grid is led by CEO Rick McClure, CFO Keith Mayer, and COO Rob Johnson, and is headquartered near Birmingham in Bessemer, Alabama.
“We have enjoyed our partnership with Shorehill,” said Mr. McClure. “Their approach, resources and strategic guidance helped make Power Grid what it is today. I have personally worked with the Shorehill team multiple times and their strategy of patiently building businesses in the right way creates not just great companies but great companies with great cultures.”
“We are proud of the business we built in partnership with the Power Grid’s management team and are excited to watch the company’s future development with its new partner,” said Dave Hawkins, managing partner at Shorehill. “Working with Rick, Keith, and Rob and all the other individuals at Power Grid has been a rewarding experience. They are not only great leaders but also great people. This is yet another example of our philosophy that people are the most important investment we make. While it is difficult to see our partnership end, we are excited to know that we found a great partner in Blackstone Energy to help take the company to the next level.”
Under Blackstone ownership, Mr. McClure and Power Grid’s other senior leaders will remain with the business in their current positions.
“Our leadership team is thrilled to be partnering with Blackstone, a leader in energy transition investing,” said Mr. McClure. “We believe Blackstone will be an outstanding strategic partner in helping us achieve long-term growth while continuing to supply essential components with outstanding quality, reliability and lead times to North America’s electrical utilities.”
“As a leading investor in the energy transition, we proactively seek out companies with strong, entrepreneurial management and work to help them fully capitalize on the growth opportunities available to them,” said David Foley, the global head of Blackstone Energy Transition Partners. “The acquisition of Power Grid fits squarely within one of our favorite investment themes – the U.S. electrical grid, joining our other recent grid-related investments, including Champlain Hudson Power Express, equipment manufacturers such as Sabre, and grid software companies such as Energy Exemplar.”
Blackstone Energy Transition Partners is Blackstone’s energy-focused private equity business which has invested over $21 billion of equity across a range of sectors within the energy industry. New York City-based Blackstone (NYSE: BX) invests in private equity, real estate, public debt and equity, non-investment grade credit, real assets, and secondary funds. The firm also provides financial advisory services, including financial and strategic advisory, restructuring and reorganization advisory, and fund placement services.
“We’re thrilled to invest in Power Grid, which we believe is well-positioned to benefit from tremendous growth driven by long-term secular tailwinds associated with the need to replace aging electrical grid infrastructure, connect newly-built renewable power generation, increase capacity to meet growing electricity demand, and harden the grid to improve its reliability,” added John-Paul (JP) Munfa, a senior managing director at Blackstone. “We look forward to working with Rick and his team on this next chapter for Power Grid. The company has built strong, long-term relationships with many of our nation’s leading electrical utilities and has positioned itself as an acquiror of choice within the electrical components sector.”
Chicago-based Shorehill makes control investments in North American-based middle market companies that have from $3 million to $15 million in EBITDA and enterprise values ranging from $20 million to $150 million. Sectors of interest include engineered industrial products, industrial services, and value-added distribution.
Last month, Shorehill held a final, oversubscribed closing of its second fund, Shorehill Private Equity II LP, with $260 million in capital commitments, exceeding its $250 million target. The firm was founded in 2013 by its managing partners Brian Simmons and Dave Hawkins, both former senior executives of CHS Capital.
Lincoln International was the financial advisor to Power Grid on this transaction.
© 2023 Private Equity Professional | December 8, 2023
