industrial equipment

J.F. Lehman Buys Heavy Equipment Group of Oldenburg

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J.F. Lehman & Company has signed an agreement with Oldenburg Group to acquire its Heavy Equipment Group, including both its defense and mining business units. Upon closing, J.F. Lehman will rename the acquired groups Lake Shore Systems.

Lake Shore Systems designs, engineers, manufactures and supports complex, heavy equipment systems used in harsh operating environments, including large deck handling equipment, access and lifting systems for US government vessels, and underground mining equipment. The company has facilities in Rhinelander, WI; Iron River, MI; Kingsford, MI; and Ontonagon, MI as well as other sales and service sites in the US and Mexico (Lake Shore Defense website) (Lake Shore Mining website).

This acquisition is J.F. Lehman’s 25th sponsored platform investment since the firm’s inception in 1992. “We are pleased to have Lake Shore join our expanding portfolio of defense, maritime and aerospace companies,” said Alex Harman, a Partner at J.F. Lehman. “In today’s marine and mining marketplace, the need for specialized, high-quality, safe, and cost-effective solutions is growing, and Lake Shore offers a full-range of products and aftermarket services to meet this demand.  We look forward to working with the management team to grow the business organically and through complementary add-on acquisitions.”

J.F. Lehman & Company is a middle-market private equity firm focused primarily on the maritime, defense, and aerospace sectors. The firm was founded by Dr. John Lehman who served six years as Secretary of the United States Navy. To date, J.F. Lehman has made investments in companies with an aggregate transaction value of approximately $1.6 billion. The firm is headquartered in New York with an additional office in Washington, DC (www.jflpartners.com).

Oldenburg Group is a manufacturer of mining equipment, military products and commercial lighting. The company’s mining and military operations were acquired in 2004 when the company acquired Lake Shore, Inc. Oldenburg Group was founded in 1982 by Wayne Oldenburg and is based in Milwaukee (www.oldenburggroup.com). Oldenburg Group will maintain and continue to operate its commercial lighting equipment division which is also based in Milwaukee (www.visalighting.com).

© 2016 Private Equity Professional • 8-25-16

Pfingsten Exits Des-Case

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Pfingsten Partners has sold Des-Case Corporation ,a provider of contamination control products used in the industrial lubricants industry, to Industrial Growth Partners. Pfingsten acquired Des-Case in October 2013.

Des-Case manufactures desiccant breathers (devices that strip the surrounding air of contaminants—both moisture and dirt—to keep lubricants running clean and dry), fluid handling products such as lubricant storage and filtration systems, and consulting/training services. The company primarily sells through distributors and to OEMs (including private-label programs) but also sells products direct to end user. Des-Case is led by CEO Brian Gleason and is headquartered near Nashville in Goodlettsville, TN (www.descase.com).

During Pfingsten’s ownership, Des-Case completed two add-on acquisitions which expanded the company’s product line and geographic reach. In June 2014 Des-Case acquired the oil sight glass product line of Houston-based ESCO (oil sight glasses are used for the early detection of contamination and oil level problems). In December 2015, Des-Case acquired JLM Systems, a Vancouver, BC-based maker of oil mist adapters and oil sampling products sold under the OilMiser brand name.

“We are a stronger and better run organization because of our partnership with Pfingsten,” said Mr. Gleason. “Pfingsten’s operational resources and culture of continuous improvement helped take our company to the next level.”

Pfingsten invests in middle market manufacturing, distribution and business services companies that have transaction values ranging from $15 million to $100 million and EBITDA between $3 million and $12 million. Since founding in 1989, Pfingsten has acquired 112 such companies through five funds with total commitments of $1.3 billion. The firm is based in Chicago with additional representative offices in India and China (www.pfingsten.com).

“Brian Gleason and the Des-Case management team have done an outstanding job executing their strategic objectives and creating a world-class business with a bright future,” said Scott Finegan, a managing director at Pfingsten.

Industrial Growth Partners, the buyer of Des-Case, provides equity capital to lower-middle market manufacturing and manufacturing services companies with revenues of $30 million to $100 million. The firm invests equity in a range of transactions involving a change of ownership, such as management buyouts, leveraged buyouts, corporate divestitures, recapitalizations and management buy-ins. The firm was founded in 1997 and is based in San Francisco (www.igpequity.com).

Minneapolis-based investment bank Craig-Hallum (www.craig-hallum.com) was the financial advisor to Des-Case and Paul Hastings (www.paulhastings.com) served as legal counsel.

© 2016 Private Equity Professional • 7-8-16

Irving Place Acquires Ohio Transmission

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Irving Place Capital has completed its acquisition of Ohio Transmission Corporation (OTC), a distributor of motion control, pump and air compressor products, from Frontenac Company which acquired the company in July 2013.

OTC’s divisions include OTP Industrial Solutions, a provider of industrial motion control, fluid power, power transmission and pumping systems; and Air Technologies, a compressed air system equipment and service provider and the largest distributor of Atlas Copco compressed air equipment in North America. The company has approximately 11,000 customers and 650 employees. Ohio Transmission was founded in 1963 and is headquartered in Columbus, OH (www.otpnet.com) (www.aircompressors.com).

The members of OTC’s management team, led by CEO Phil Derrow, will continue in their current roles and will retain equity ownership in the business. Bob Grubbs, former CEO of Anixter International, will continue in his role as Chairman of OTC. Carlos Cardoso, former CEO of Kennametal and Senior Advisor at Irving Place Capital, will join the OTC Board of Directors.

“Ohio Transmission’s long-standing focus on providing technical solutions and support to its customers and suppliers is a differentiated approach in the industrial distribution sector, and one that has resulted in consistent growth throughout its history,” said Devraj Roy, Partner at Irving Place Capital. “We look forward to partnering with the management team to continue to build on this strong foundation.”

“I am thrilled to continue working with the OTC management team to help drive growth and profitability,” said Mr. Grubbs. “Partnering with the Irving Place Capital team, with whom I have enjoyed a long-standing relationship, gives me the confidence that we will have an experienced and knowledgeable investor to support the company going forward.”

Irving Place Capital invests in buyouts, recapitalizations and growth capital opportunities. The firm focuses on making control or entrepreneur-driven investments. Since its formation in 1997, Irving Place Capital has been an investor in 60 companies and manages over $4 billion, including its current $2.7 billion institutional fund. The firm is based in New York (www.irvingplacecapital.com).

© 2015 PEPD • Private Equity’s Leading News Magazine • 10-6-15

Generation Growth Acquires Innovative Laser

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Generation Growth Capital has acquired Innovative Laser Technologies, a maker of laser workstations used in the production of medical devices. The existing management team of the company will continue operating the business following the transaction.

Innovative Laser Technologies is a designer and fabricator of custom laser workstations used to produce components for numerous industries, including medical device, defense, energy and aerospace. Customers include medical device OEMs and many fortune 500 companies. The company is headquartered in Minneapolis (www.iltinc.com).

“ILT has solidified a niche in the custom laser workstation market and through our diligence process we learned that their customers really value the capabilities that ILT possesses,” said John Reinke, a Managing Director of Generation Growth Capital. “We plan on investing in new systems, processes and people to help manage the growth that the company is experiencing.”

Senior financing was provided by Minnesota Bank & Trust (www.mnbankandtrust.com) and mezzanine financing was provided by Exmarq Capital Partners (www.exmarqcapital.com).

“The founders of ILT did a great job of growing the company from scratch, building the solid reputation that the company enjoys in its markets today. We’re excited that they will continue to be partners with us going forward. We continue to be bullish on niche domestic manufacturing and companies that touch certain aspects of the healthcare industry,” said Cory Nettles, a Managing Director of Generation Growth Capital.

Generation Growth expects to make additional investments in the business to support future growth and implement operational best practices.

Generation Growth Capital invests from $1 million to $10 million in manufacturing, service, and distribution businesses that have enterprise values of less than $30 million and sales ranging from $5 million to $50 million. Investments are primarily structured as equity but subordinated debt and warrant structures are also considered. The firm is headquartered in Milwaukee and has an additional office in Chicago (www.generationgrowth.com).

“GGC really understands the nature of our business. They recognize the value that we bring to our customers through technical expertise, service, and support. Throughout the transaction process GGC recognized the key areas of our business and will provide needed resources to continue to professionalize our company. I look forward to working with GGC to continue ILT’s strong growth,” said Fred Tsuchiya, President and CEO of ILT.

© 2014 PEPD • Private Equity’s Leading News Magazine • 3-17-14

Pfingsten Exits Hy-Bon

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Pfingsten Partners has sold its portfolio company Hy-Bon Engineering Company to Regal Beloit Corporation.

“We were pleased to partner with the Hy-Bon management team to deliver this outstanding return for our shareholders. The successful sale of Hy-Bon to Regal Beloit clearly demonstrates the continuing strength of Hy-Bon’s business model,” said Scott Finegan, Pfingsten Managing Director.

Hy-Bon Engineering Company, acquired by Pfingsten in July 2009, is a manufacturer of vapor recovery units and replacement parts and a provider of related field and emissions testing services for the oil production, biogas, and industrial markets. Products are sold to oil and gas companies and include customized vapor recovery units with a variety of compressor styles for storage tanks, production facilities, and oil fields both on and offshore. Hy-Bon is headquartered in Midland, TX (www.hy-bon.com).

“Hy-Bon management, in partnership with Pfingsten, built a leading provider of highly technical vent gas management solutions. Pfingsten’s support for new products, regional service center expansion and acquisitions was invaluable,” said Larry Richards, Hy-Bon President and CEO.

Pfingsten Partners invests in middle market manufacturing, distribution and business services companies. Since completing its first investment in 1991, Pfingsten Partners has acquired 93 companies and has over $1 billion of capital under management. The firm is based in Chicago and has additional offices in India and China (www.pfingsten.com).

Baird acted as the exclusive financial advisor to Hy-Bon and Pfingsten. Baird’s deal team was led by Joe Packee, Managing Director.

“As the U.S. expands its energy production, there is a need to implement products and services that capture, and ideally re-use, the gases that are discharged as a part of this production and related storage,” said Mr. Packee. “With an increased focus on the economic benefits and the environmental and safety matters surrounding our country¹s growing oil production capabilities, solutions provided by Hy-Bon are of great importance.”

Regal Beloit Corporation (NYSE: RBC) is one of the largest electric motor manufacturers in the world. The company had sales in 2013 of more than $3 billion. Regal Beloit was founded in 1955 as Beloit Tool Corporation and is headquartered in Beloit, WI (www.regalbeloit.com).

© 2014 PEPD • Private Equity’s Leading News Magazine • 2-12-14

Svoboda Invests in Blake & Pendleton

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Svoboda Capital Partners has made an equity investment in Blake and Pendleton, a provider of compressed air products. Svoboda Capital partnered with Allen King, CEO, and other members of Blake and Pendleton’s management team on this transaction.

Blake and Pendleton (B&P) supplies and services a range of equipment for the compressed air, pumping, heat transfer and mineral processing industries. The company also offers on-site and consultative technical services to industrial customers throughout the Southeast. The company was founded in 1971 and is headquartered in Macon, GA (www.blakeandpendleton.com).

“B&P is a regional market leader in the compressed air market, and Svoboda Capital is excited to partner with Allen and his talented management team to leverage our collective distribution and service experience,” said Rick Harpster, Principal at Svoboda Capital Partners. “We look forward to supporting the company’s plan to expand its service offering and geographic footprint.”

Svoboda Capital Partners has over $300 million of capital under management and invests from $10 million to $25 million in value-added distribution and business services companies that have revenues from $10 million to $100 million and EBITDAs from $3 million to $15 million. The firm was founded in 1998 and is based in Chicago (www.svoco.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 6-11-13

KKR Acquires Gardner Denver

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KKR will acquire industrial equipment maker Gardner Denver for $76 per share or $3.7 billion. Gardner Denver had revenues in 2012 of approximately $2.4 billion. The transaction is expected to close in the third quarter and is valued at $3.9 billion including the assumption of Gardner Denver’s debt.

Fully committed debt financing will be provided by UBS Securities, Barclays, Citigroup, Deutsche Bank Securities, RBC Capital Markets, Mizuho Corporate Bank, and KKR Capital Markets, an affiliate of KKR, in the form of senior secured credit facilities. Deutsche Bank Securities, Citigroup, Barclays, UBS Securities, RBC Capital Markets, Mizuho Corporate Bank, and KKR Capital Markets also arranged debt financing in the form of a senior unsecured bridge facility.

Gardner Denver designs, manufactures, and markets engineered industrial machinery and related parts and services. The company operates in two segments: (i) the Industrial Products Group offers rotary screw, reciprocating, and sliding vane air and gas compressors; positive displacement, centrifugal, and side channel blowers; and vacuum pumps for use in manufacturing, transportation and general industry, and original equipment manufacturer (OEM) and engineered system applications; (ii) the Engineered Products Group designs, manufactures, markets, and services pumps, compressors, liquid-ring vacuum pumps, reciprocating pumps, diaphragm vacuum pumps, water jetting systems, and related aftermarket parts used in oil and natural gas well-drilling, servicing, and production, as well as in medical and laboratory, and industrial cleaning and maintenance. Gardner Denver is based in Wayne, PA (www.gardnerdenver.com).

“Gardner Denver is an outstanding business with a rich heritage of manufacturing excellence, innovation and quality that spans well over 100 years. The company has an impressive group of talented and dedicated employees, and we look forward to working closely with them to drive future growth and value. The long-term future of Gardner Denver is bright,” said Pete Stavros, head of the KKR’s industrials investment team.

Goldman, Sachs & Co. is serving as financial advisor to Gardner Denver and Skadden, Arps, Slate, Meagher & Flom is serving as legal advisor. UBS Securities and Simmons & Company International are serving as financial advisors to KKR and Simpson Thacher & Bartlett is serving as legal advisor.

KKR makes private equity, fixed income and other investments in companies in North America, Europe, Asia and the Middle East. The firm has $66 billion in assets under management. In addition to its New York headquarters the firm has offices in Menlo Park, San Francisco, Houston, Washington DC, London, Paris, Hong Kong, Tokyo, Beijing, Mumbai, Dubai and Sydney (www.kkr.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 3-11-13

Wisdom Capital Partners Acquires Advanced Recycling Systems

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Wisdom Capital Partners has partnered with Stanwich Partners and Ironwood Capital to acquire Advanced Recycling Systems, a manufacture of dust and debris collection equipment.

Advanced Recycling Systems (ARS) is a designer and manufacturer of equipment utilized in the collection, recycling and removal of dust and debris generated in industrial environments. Products include steel grit recyclers and dust collectors for the bridge painting, municipal water tank, shipbuilding and industrial market segments.  ARS was founded in 1991 and is based in Lowellville, OH (www.arsrecycling.com).

“ARS is well positioned for future growth as an aging infrastructure in the US continues to require significant investment and attention.  There is also a growing need for environmentally-friendly industrial solutions.  ARS is poised to benefit from both drivers of demand, and we are delighted by this acquisition,” said Dominic Petito, President & CEO of Wisdom Capital.

Tom Herrmann, a Managing Director of Stanwich, will serve as interim CEO of ARS following the acquisition.  “We were attracted by ARS’ reputation and the quality of its products, which are second to none in its industry.  We believe the company’s prospects are excellent as ARS continues to gain share in its existing markets and enter new industrial markets where there is a need for recycling solutions,” said Mr. Herrmann.

“The shareholders of ARS were pleased to enter into this transaction which, among other things, provides the company with the resources and expertise to take advantage of growth opportunities that we couldn’t exploit on our own. We are all looking forward to taking the company to the next level and see a bright future ahead for ARS,” said Gus Lyras, a founder and shareholder of ARS.

Ironwood Capital provided financing for the transaction in the form of senior subordinated debt and equity. “We were pleased to partner with Wisdom and Stanwich to complete the ARS transaction and are excited about the prospects for ARS,” said Dickson Suit, partner at Ironwood Capital.

Comerica Bank provided senior debt financing for the transaction.

Wisdom Capital Partners makes control or minority investments of $1 million to $10 million in middle market companies that have revenues of at least $5 million and EBITDAs of at least $500,000. Sectors of interest include consumer, commercial and industrial, digital media, and financial services. The firm is based in Greenwich, CT (www.wisdomcapitalpartners.com).

Stanwich Partners invests in manufacturing and value-added distribution companies that have revenues from $5 million to $75 million and EBITDAs of at least $1 million. The firm is based in Wilton, CT (www.stanwichpartners.com).

Ironwood Capital invests in senior subordinated debt and equity securities in amounts ranging from $5 million to $25 million to support business owners and financial sponsors in leveraged buyouts, growth financings and recapitalizations.  Typical investments are in companies with revenues of $10 million to $200 million and EBITDAs of at least $1 million. The firm is industry agnostic but has a specific interest in value added manufacturing, environmental services, healthcare products and services, specialty distribution, and the consumer products sectors.  Ironwood Capital has $550 million of capital under management and is based in Avon, CT (www.ironwoodcap.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 1-8-13

Prospect Capital Acquires CCPI

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Prospect Capital Corporation has funded a recapitalization of CCPI, a manufacturer of refractory materials, with an investment of $33.9 million in combined debt and equity financing.  As a result of the recapitalization, Prospect is now the controlling shareholder of CCPI.

“The senior managers of CCPI, who have invested alongside Prospect in the recapitalization, look forward to growing CCPI with Prospect,” said Mike Williams, President and CEO of CCPI. “Prospect has extensive experience as a supportive, long-term investor in US-based mid-sized industrial and other businesses.”

CCPI develops, manufactures, and sells a range of proprietary refractory materials, temperature sensing devices, and other consumable products. The company’s products are used in multiple industrial applications including steel production, aluminum production, and industrial heat treating. Brand names include COMAT and TunTemp.  CCPI was founded in 1957 and is headquartered in Blanchester, OH (www.ccpi-inc.com).

“We are impressed with the company’s technical excellence and expansive product offering as a global leader in its market,” said Bart de Bie, a Managing Director of Prospect Capital Management.  “This recapitalization of CCPI demonstrates Prospect’s ability to make combined debt and equity investments to generate compelling yield and total return for our shareholders.”

© 2012 PEPD • Private Equity’s Leading News Magazine • 12-17-12

CID Capital Exits GT Exhaust

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GT Exhaust, a provider of sound and emissions control products and a portfolio company of CID Capital, has been sold to Industrial Acoustics Company, a portfolio company of AEA Investors.

GT Exhaust is a provider of sound and emissions control products to the North American energy, power and heavy transportation industries. The company’s product line, which includes silencers, catalytic converters, diesel particulate filters and related accessories, is used in new installation and retrofit applications for large stationary engines. The company was founded in 1978 and is Lincoln, NE (www.gtexhaust.com).

CID Capital makes majority investments in lower-middle-market companies that have revenues of $10 million to $ 75 million and an EBITDA of at least $2 million. Sectors of interest include industrial manufacturing; proprietary education; branded consumer products; safety and security products; specialty food manufacturing and distribution; value-added distribution and logistics; medical devices and healthcare services. The firm is base in Indianapolis, IN (www.cidcap.com).

Industrial Acoustics Company is a global provider of engineered noise and acoustic control products to various industries, including energy & power, industrial, commercial construction, aviation, and automotive end markets. The company is based in Winchester, UK (www.industrialacoustics.com).

AEA manages approximately $5 billion of invested and committed capital in funds dedicated to three purposes: buyouts of middle market companies operating principally in four sectors – industrial, specialty chemical, consumer products and services; buyouts of smaller middle market companies in these same sectors; and mezzanine and senior debt investments. AEA is based in New York, NY (www.aeainvestors.com).

Lincoln International acted as the exclusive financial advisor to GT Exhaust, working closely with the company’s senior management team and CID Capital throughout the sale process. This included providing advisory expertise and managing the marketing, negotiation and due diligence phases of the transaction.

“Through an aggressive, global marketing effort and unique insights into the buyer universe, drawn from several prior transactions in the exhaust and emissions space, Lincoln created a highly competitive process resulting in attractive alternatives for the shareholders with a very favorable outcome. Lincoln’s execution expertise, industry knowledge, and process guidance proved invaluable throughout the sale process,” said Scot Swenberg, Managing Director at CID Capital.

Lincoln International specializes in merger and acquisition advisory services, debt advisory services, private capital raising and restructuring advice on mid-market transactions. Lincoln International also provides fairness opinions, valuations and pension advisory services on a wide range of transaction sizes. With thirteen offices in the Americas, Asia and Europe, Lincoln International has strong local knowledge and contacts in key global economies. The firm provides clients with senior-level attention, in-depth industry expertise and integrated resources. The firm is based in Chicago, IL (www.lincolninternational.com).

© 2012 PEPD • Private Equity’s Leading News Magazine • 10-3-12