Comvest Partners has closed the sale of Systems Control, a manufacturer of substation control systems, to publicly traded Hubbell at an enterprise value of $1.1 billion.
Comvest acquired System Control in March 2018 from David Brule, the majority shareholder of Systems Control.
Systems Control specializes in engineering and manufacturing of equipment enclosures, control and relay panels, and turnkey systems used in electrical transmission and distribution substations across North America. The company also provides a range of support services including design, installation, integration, testing and control.
Systems Control operates from a 400,000 sq. ft. manufacturing facility in the upper peninsula of Michigan in Iron Mountain, Michigan. The company’s revenues for 2024 are estimated at $400 million and the $1.1 billion purchase price represents a 12x valuation multiple based on $91.6 million of projected 2024 EBITDA.
Systems Control was founded in 1962 as a division of Iron Mountain, Michigan-based MJ Electric and was spun out as an independent company in 2000 when MJ Electric was acquired by Exelon Infrastructure Services, a subsidiary of Exelon Corporation. Today, MJ Electric is owned by publicly traded Quanta Services (NYSE: PWR).
During Comvest’s 5.5 year ownership term, Systems Control expanded its manufacturing facility, developed multi-site production capabilities, and invested in information technology systems, human capital development, and sales and marketing.
“This successful outcome highlights Comvest’s expertise in helping companies achieve their growth objectives as well as our investment leadership in the infrastructure services space. We are excited for Systems Control’s future as part of Hubbell,” said Maneesh Chawla, a managing partner at Comvest.
“Comvest supported Systems Control’s vision for growth throughout our partnership, providing both capital and invaluable support key to the achievement of our desired growth milestones,” said Brad Lebouef, the chief executive officer at Systems Control. “We are appreciative of Comvest’s stewardship and look forward to our next chapter with the terrific team at Hubbell.”
“Comvest invested in Systems Control in partnership with management with a shared vision of scaling the company as a best-in-class turnkey provider of end-to-end substation control solutions. We are proud of the great relationship we built with the Systems Control team and the successes we achieved together,” said Kenny Nickens, a vice president at Comvest.
Hubbell (NYSE: HUBB) is a manufacturer and supplier of electrical and utility products. The company’s electrical segment provides wiring devices, lighting fixtures, and controls for residential, commercial, industrial markets; and its utility segment supplies products and services to the power transmission and energy distribution industry. Hubbell, with FY 2022 revenues of $4.9 billion, was founded in 1888 and is headquartered Near New Haven in Shelton, Connecticut.
“This acquisition enhances Hubbell Utility Solutions’ industry-leading franchise across utility components, communications and controls,” said Gerben Bakker, Hubbell’s chairman, president and chief executive officer. “Systems Control has a strong track record of financial performance and is highly complementary to Hubbell’s portfolio, enabling us to deliver additional value to our core utility customers while enhancing our overall growth and margin profile for shareholders.”
Comvest Partners provides both debt and equity to middle-market companies. For equity investments, Comvest invests from $50 million to $150 million of equity per transaction in companies with $50 million to $1 billion of revenue that have positive or negative EBITDA. Sectors of interest include business services, consumer and retail, healthcare services, industrials, and transportation and logistics. Comvest was founded in 2000 and is based in West Palm Beach with additional offices in Chicago and New York City.
Harris Williams and Lincoln International were the financial advisors to Systems Control, and Morgan Stanley was the financial advisor to Hubbell.
© 2023 Private Equity Professional | December 15, 2023
