Pacific Avenue has agreed to acquire Sogefi USA and Sogefi Filtration SA (together “Filtration Business Unit”) from Milan-based Sogefi.
The Filtration Business Unit is a manufacturer of vehicle filtration components and systems used in the automotive aftermarket and by original equipment manufacturers. Product types include fuel, oil, air, diesel and cabin air filters used in both for cars and commercial vehicles.
The business unit operates 11 manufacturing facilities across seven countries (France, United States, India, Slovenia, Italy, Morocco, and the United Kingdom), two main distribution hubs in France and Poland, and two regional distribution hubs in the United Kingdom and Spain.
The acquisition of the Filtration Business Unit is expected to close in the second quarter or early third quarter of 2024. Post closing, the unit will operate under the name Purflux Group with CEO Julien Grange remaining and leading the company.
In 2023, the Filtration Business Unit had more than $600 million of revenue and more than $100 million of Adjusted EBITDA. This transaction values the Filtration Business Unit at an enterprise value of €374 million or approximately $400 million, resulting in an Adjusted EBITDA valuation multiple of approximately 4x.
“We are thrilled about the acquisition of Sogefi’s Filtration Business Unit. With strong OEM and aftermarket businesses, this is a great addition to our growing portfolio,” said Chris Sznewajs, the founder and managing partner of Pacific Avenue. “Additionally, due to its investment in R&D and longstanding customer relationships, the company is well-positioned to support OEMs in the transition to electrical vehicles. Given the significant scale of the business, it will act as an excellent platform to build a global filtration leader through future add-on M&A and organic growth.”
Pacific Avenue specializes in middle-market corporate divestitures, carve-outs, and other complex transactions. The firm’s specific targets are North American-focused companies that have up to $1 billion in revenue and up to $50 million of EBITDA. Pacific Avenue is a control investor and will acquire both performing and underperforming businesses across a wide range of industries, making the firm effectively industry agnostic.
“The Purflux team is excited to partner with Pacific Avenue to unlock the next phase of growth,” said Mr. Grange. “We remain committed to delivering best-in-class, high-performance products and service to our world-class customers. We look forward to continuing our legacy of being a leader and innovator in the filtration industry.”
“This is an exciting acquisition for Pacific as we continue to expand into Europe,” added Mr. Sznewajs. “Pacific Avenue has positioned itself as a trusted partner to corporate sellers globally ensuring seamless transitions regardless of transaction complexity.”
In May 2023, Pacific Avenue held a final, oversubscribed, and hard cap close of its first fund, Pacific Avenue Fund I LP, with $500 million of capital commitments. Fund I was backed by a range of investors including insurance companies, consultants, endowments and foundations, funds of funds, family offices, and individuals. Today, Pacific Avenue has more than $1.2 billion of assets under management.
Pacific Avenue was founded in 2018 by Mr. Sznewajs and is headquartered in near Los Angeles in El Segundo, California. Before founding the firm, Mr. Sznewajs was a principal with The Gores Group where he focused on investing in special situations and corporate carve-outs in the industrials sector.
Milan-based Sogefi develops and produces filtration systems, flexible suspension components, and air management and cooling systems used in the automotive industry.
Houlihan Lokey was the financial advisor to Sogefi, and Robert W. Baird & Co. was the financial advisor to Pacific Avenue. Debt financing for the acquisition was led by J.P. Morgan Securities.
© 2024 Private Equity Professional | March 12, 2024
