Wynnchurch Capital has sold TH Holdings, a diversified industrial manufacturer operating under the brands Texas Hydraulics, Hydromotion, and Oilgear, to Fortress Investment Group.
Wynnchurch acquired Texas Hydraulics in February 2016 through a carve-out from Dover Corporation. At that time, the company was a manufacturer of hydraulic cylinders, swivels and other components that are used by mobile equipment manufacturers in the utility, mining, general construction, material handling, road building, waste and refuse sectors.
Hydraulic cylinders, also known as linear hydraulic motors, are used in many applications to apply a one-directional force through a one-directional stroke. Hydraulic cylinders get their power from pressurized hydraulic fluid, which is typically oil.
Under Wynnchurch’s ownership, Texas Hydraulics expanded its portfolio by acquiring The Oilgear Company, a Michigan-based manufacturer of hydraulic pumps, valves, and systems used in heavy-duty applications, in April 2018.
Today, TH Holdings, led by CEO Patrick Taylor, operates through three units – Texas Hydraulics, Hydromotion, and Oilgear. Together, these units provide numerous products and services that are used in heavy-duty mobile equipment for fire and rescue, forestry, mining, and utility; in the industrial sector across aerospace, chemicals, civil, defense, extrusion, and forging sectors; and in the energy sector in hydroelectric, nuclear, offshore, and subsea applications.
TH Holdings is headquartered near Waco in Temple, Texas, with additional facilities in Pennsylvania, Michigan, France, the United Kingdom, and South Korea.
“Wynnchurch has been a valued partner and provided tremendous support during their ownership,” said Mr. Taylor. “They helped management grow the business, drive continuous improvement, and execute our strategy. We are excited to drive the next growth phase at TH Holdings.”
The hydraulics market is poised for significant expansion, driven by increasing demand from construction, mining, and energy sectors. Projections estimate a compound annual growth rate (CAGR) of 5.5%, with the market forecasted to reach $54 billion by 2030. Technological advancements in automation and hydraulic systems continue to shape the industry, creating opportunities for manufacturers like TH Holdings.
“TH Holdings represented an opportunity to invest in a leading hydraulics solutions provider with a reputation for engineering products for the world’s harshest operating environments,” said Frank Hayes, a managing partner at Wynnchurch Capital. “This expertise, paired with a passion for manufacturing excellence, formed a unique value proposition for customers. We are proud of everything the team has accomplished during our ownership and wish them well in their partnership.”
Wynnchurch Capital, a private equity firm specializing in middle-market companies, invests in businesses with revenues between $50 million and $1 billion. Its expertise includes recapitalizations, growth capital, management buyouts, corporate carve-outs, and restructurings. Wynnchurch focuses on sectors such as aerospace, defense, and government; building products and materials; consumer and food; manufacturing, industrial, and transportation; and business services and distribution.
In January 2024, Wynnchurch closed its sixth private equity fund, Wynnchurch Capital Partners VI LP, with $3.5 billion in committed capital. Founded in 1999, the firm is headquartered near Chicago in Rosemont, Illinois.
“TH Holdings demonstrated strong growth during our ownership across its core markets and developed a number of exciting new product and service offerings that lay the foundation for future growth,” said JD Frank, a principal at Wynnchurch.
“We believe that Texas Hydraulics is a company with a strong management team, differentiated products, leading market share in key markets, and strong growth potential,” said Ben Green, a director at Fortress. “We look forward to working with Patrick and his team to invest in the company’s operations, foster product innovation, and expand its products and customer base.”
Fortress Investment Group, a global investment firm with over $48 billion in assets under management, serves more than 2,000 institutional clients and private investors worldwide. Its investment strategies span credit and real estate, private equity, and permanent capital. Founded in 1998, Fortress is headquartered in New York City.
Moelis & Company was the financial advisor to Fortress, and Evercore is serving as the placement agent for Fortress on the debt financing for the acquisition. Lazard Frères & Co. LLC and Lincoln International were the financial advisors to Wynnchurch.
© 2024 Private Equity Professional | December 5, 2024
