heating products

Bunker Hill Acquires ASPEQ Heating

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Boston-based Bunker Hill Capital has acquired ASPEQ Heating Group, a maker of electric-heating and thermal-management products.  In addition to capital provided by Bunker Hill Capital and other co-investors, John Eulich – the majority owner of ASPEQ – and other members of the senior management team invested meaningful equity in the transaction.

ASPEQ Heating Group is a manufacturer of both customized and standard design electric-heating and thermal-management products which are sold under the INDEECO, Heatrex and AccuTherm brands.  The company’s product portfolio is comprised of thousands of products under approximately 30 product categories that address virtually every electric-heating application across nearly every industrial process and commercial end market.  ASPEQ was founded by John Eulich in 2008 and is headquartered in St. Louis (www.aspeqheating.com).

INDEECO, which was founded in 1929, was acquired by ASPEQ in 2008 as a platform for acquisition. The company subsequently integrated two add-ons acquisitions – Heatrex in 2010 and AccuTherm in 2011. From the combination of these three businesses, ASPEQ consolidated four facilities into two flexible and vertically integrated manufacturing facilities.

“ASPEQ represents a very stable, diversified business with ’sticky’ customer relationships,” said Rufus Clark, Managing Partner of Bunker Hill Capital.  “We’ve been impressed by the company’s ability to execute an acquisition strategy, pursue operational efficiencies, and drive further margin expansion while growing the overall business. ASPEQ is well positioned for future growth.”

Bunker Hill makes control investments in lower middle market companies with EBITDAs between $5 million and $20 million, and enterprise values up to $120 million.  Sectors of interest include industrial products, business services, consumer products, and specialty retail.  The firm has offices in Boston and San Diego (www.bunkerhillcapital.com).

“ASPEQ’s management team, work force, and engineering talent are all dedicated to manufacturing the industry’s most technologically advanced heating solutions,” said Mark DeBlois, Managing Partner of Bunker Hill Capital. “The company’s commitment to its customers is evidenced by its ability to produce highly engineered, customized heating technologies. We are very excited to partner with CEO Mike Howard and his team in scaling the business to its next level of growth.”

Mike Howard, CEO of ASPEQ, believes that Bunker Hill is an ideal partner.  “Bunker Hill Capital will help us achieve the next phase of higher growth for ASPEQ. We look forward to continuing to build the ASPEQ platform through our network of sales reps and customer relationships as well as by entering new end markets. We believe that together with Bunker Hill Capital’s strategic and operational insight we can grow our leadership position within the heating solutions market.”

This is the fourth investment made by Bunker Hill from its second fund, Bunker Hill Capital II LP, with $200 million in capital commitments. Fund II closed in January 2011.  Bunker Hill Capital was joined in the transaction with equity, senior debt, and subordinated debt investments from management, Abacus Finance Group, Madison Capital Funding, BB&T Capital Partners and BMO Mezzanine Fund.

© 2015 PEPD • Private Equity’s Leading News Magazine • 7-1-15

Fulcrum Exits Nuheat Industries

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Fulcrum Capital Partners has sold its portfolio company Nuheat Industries, a manufacturer of electric radiant floor heating systems and outdoor freeze protection products, to Pentair.

Fulcrum’s third fund (Fund III) acquired its interest in Nuheat in March 2008. During the course of its ownership, Nuheat expanded its market position by investing in new product development, increased adoption rates by investing in sales personnel, and initiated marketing and public relations activities typically not seen in the industry.  Fulcrum also completed an add-acquisition for Nuheat that expanded its freeze protection product portfolio.  Nuheat is headquartered in Vancouver, BC (www.nuheat.com).

Pentair (NYSE:PTR) is a diversified industrial company serving the food, water and energy industries. The company has approximately $7 billion in annual revenue. Pentair is headquartered in Worsley, UK with its main US office located in the Minneapolis suburb of Arden Hills, MN (www.pentair.com).

Fulcrum Capital Partners manages over C$675 million of capital and invests both equity and subordinated debt in companies with revenues of C$10 million to C$250 million. Sectors of interest include services, manufacturing, consumer products, distribution, food and retail. Fulcrum Capital Partners was formed in 2011 as the successor to HSBC Capital (Canada) Inc. when current management acquired the private equity and mezzanine business of HSBC Bank Canada.  The majority of Fulcrum’s eight partners have worked together for over a decade. During this period at Fulcrum and its predecessor firm, the partners have invested in 38 companies and realized 25 exits, generating a gross return on cash invested of 3.3x and a gross IRR of 28.7%.  Fulcrum has offices in Vancouver and Toronto (www.fulcrumcapital.ca).

Fund III has made 11 investments and the sale of Nuheat represents the ninth fully realized investment in that fund.  To date, Fund III has generated a return of three times invested capital.

Lazard Middle Market (www.lazardmm.com) was the exclusive financial advisor to Nuheat for this transaction.

2015 PEPD • Private Equity’s Leading News Magazine • 5-1-15

Audax Group Acquires Arctic Fox

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Phillips & Temro Industries, a portfolio company of Audax Group, has completed the acquisition of Arctic Fox from North River Capital. North River Capital acquired Arctic Fox in March 2012.

Arctic Fox is a designer and manufacturer of fuel and hydraulic fluid heating products and systems used in the oil and gas, heavy duty truck, off-highway equipment, power sports, and other industrial markets. Arctic Fox is based in Delano, MN (www.arctic-fox.com).

Phillips & Temro Industries (PTI) is a manufacturer of heating, cooling, and silencing products for diesel, gasoline, hybrid, and electric vehicle engines. The company serves the heavy-duty truck, light-duty truck, power generation, off-road, automotive, and electric/hybrid vehicle end markets. PTI has facilities in the United States, Canada, the United Kingdom, and China and is headquartered in Eden Prairie, MN (www.phillipsandtemro.com).

The acquisition of Arctic Fox expands PTI’s presence into fuel and hydraulic systems and the oil & gas and power sports end markets.

“PTI is a leading global supplier of niche heating products, systems and controls with an exceptional management team, growing end markets and a growing technology portfolio. The acquisition of Arctic Fox enhances PTI’s product offering and customer base into value added systems and the growing oil and gas markets,” said Don Bramley, Managing Director of Audax Group. “We will continue to grow the business in the high value-add engineered heating products, systems and controls categories with increased focus on analytical equipment, industrial, energy and other end markets.”

The Audax Group makes control investments of $10 million to $100 million in middle market companies with transaction values of $25 million to $500 million. Sectors of interest include industrial manufacturing; energy; outsourced industrial services; consumer products; healthcare devices and services; non-asset based logistics; technology; aerospace & defense; business services; and direct marketing. The firm was founded in 1999 and has offices in Boston and New York (www.audaxgroup.com).

The seller of Arctic Fox, North River Capital, is an investment vehicle for members of the Rifkin family and other former OmniSource executives. OmniSource, a processor and distributor of scrap and secondary metals, was acquired by Steel Dynamics in October 2007. North River Capital was founded in July 2008 and is based in Ft. Wayne, IN (www.northrivercapital.net).

© 2013 PEPD • Private Equity’s Leading News Magazine • 10-17-13