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Morgenthaler Acquires DLH Industries

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dlh nf1Bowles Fluidics, a portfolio company of Morgenthaler Private Equity, has acquired DLH Industries, a manufacturer of air and fluid management systems for the automotive industry.  The combined company is now called dlhBOWLES.

Bowles Fluidics, acquired by Morgenthaler in December 2014, is a designer and manufacturer of fluid distribution products used in the automotive, consumer, and industrial markets. The company was founded in 1961 by Dr. R. E. Bowles and is based in Columbia, MD (www.bowlesfluidics.com).

DLH Industries is a provider of engineered plastic products – particularly air and fluid handling components and assemblies – used in the automotive industry.  The company’s services and capabilities include design, assembly, plastic thermoforming, injection molding, tube and profile extrusion, and testing. DLH Industries is based in Canton, OH (www2.dlh-inc.com).

John Saxon of DLH will become the CEO of dlhBOWLES and Sri Sridhara of Bowles will become the President of dlhBOWLES.

peter taft nf1“On behalf of Karen Tuleta, Matt Yohe, and Michael Duffy from the Morgenthaler deal team, we are excited to bring together two companies with talented management teams, as well as complementary product offerings, manufacturing capabilities, and process knowledge,” said Peter Taft, a Partner at Morgenthaler who leads the investment in dlhBOWLES.

Morgenthaler Private Equity invests in companies in the lower middle market that have transaction values up to $150 million and EBITDAs between $5 million and $20 million.  Sectors of interest include high-value manufacturing and proprietary business services. The firm has $3 billion of capital under management and has offices in Cleveland and Boston (www.morgenthaler.com).

Financing for the transition was provided by Madison Capital Funding (www.mcfllc.com) who was the agent for the senior debt facility. Hancock Capital Management (www.hancockmezzanine.com) and Hartford Investment Management Company (www.himco.com) provided subordinated debt financing.  The law firm of BakerHostetler (www.bakerlaw.com) advised Morgenthaler on the transaction.

© 2015 PEPD • Private Equity’s Leading News Magazine • 7-14-15

Saw Mill Capital Exits Jason

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jason nf1Saw Mill Capital has sold its portfolio company Jason Incorporated to Quinpario Acquisition Corp. which later changed its name to Jason Industries (NASDAQ: JASN).  Prior to the sale, Jason was owned by a group of investors including Saw Mill Capital, Falcon Investment Advisors, and Hamilton Lane Co-Investment Fund II.

rivard nf1“Jason has generated outstanding growth in revenue and profitability and is now positioned to build on that growth as a public company.  We would like to thank the Jason management team and all employees for their hard work and dedication. We are confident the company will continue to thrive under its strong leadership team,” said Scott Rivard, Principal of Saw Mill.

Jason Industries is the parent company to a global group of manufacturing companies within the seating, finishing, components and automotive acoustics markets, including Assembled Products (Buffalo Grove, IL), Janesville Acoustics (Southfield, MI), Metalex (Libertyville, IL), Milsco (Milwaukee, WI), Morton Manufacturing (Libertyville, IL), Osborn (Cleveland, OH and Burgwald, Germany) and Sealeze (Richmond, VA). Headquartered in Milwaukee, the Jason companies employ more than 4,000 individuals in 15 countries (www.jasoninc.com).

“Saw Mill Capital has been a true partner to me and my management team as we have grown Jason.  It has been a pleasure to work with them to execute our shared vision for the company,” said David Westgate, CEO of Jason.

Saw Mill Capital invests in manufacturing and service companies with enterprise values of $25 million to $200 million. Platform investments typically have at least $5 million of EBITDA and revenues of $40 million to $150 million. The firm is located in Briarcliff Manor, NY (www.sawmillcapital.com).

Falcon Investment Advisors invests from $10 million to $75 million of subordinated debt and other junior capital in middle market companies to support management or leveraged buyouts, growth or acquisition capital, dividend recaps, generational transfers, structured finance and restructurings. Since its founding in 2000 by Sandeep Alva and William Kennedy, Falcon has invested in more than 50 companies in a range of industries. Falcon is currently investing out of Falcon Strategic Partners IV, a $910 million fund.  The firm has offices in Boston and New York (www.falconinvestments.com).

Quinpario was advised by Olshan Frome Wolosky and Graubard Miller as legal counsel with Stifel, Nicolaus & Company as financial advisor. Jason was advised by Kirkland & Ellis as legal counsel with Robert W. Baird & Co. as financial advisor.

2014 PEPD • Private Equity’s Leading News Magazine • 7-16-14

Aurora Capital Group Exits Porex Corporation

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porex nfAurora Capital Group has completed the sale of Porex Corporation, a developer of porous polymer materials, to Filtration Group. Aurora first invested in Porex in October 2009.

Porex is a developer of porous polymer materials used in the healthcare and bioscience end markets, and also in the consumer and industrial sectors. Porex products serve filtration, venting, wicking, diffusion, and media support functions in applications such as blood filters, catheter vents, fuel filters, writing instrument tips, and consumable diagnostic tests. The company has more than 1,300 customers across 65 countries. Porex was founded in 1961 and has operations in North America, Europe and Asia. The company is headquartered in Fairburn, GA (www.porex.com).

Under Aurora’s ownership, Porex made a number of strategic acquisitions and divestitures, including the sale of Porex’s surgical division to Stryker Corporation in November 2010.

“Aurora’s investment in Porex exemplifies our investment strategy and the spirit of partnership we bring to our work,” said Michael Marino, Partner of Aurora Capital Group. “The seamless collaboration between Aurora, Porex and the company’s independent board underpinned the success of an ambitious set of investment initiatives designed to grow Porex’s capabilities and its unique materials technology. As a result of these initiatives and several strategic transactions, Porex has evolved to become a larger, stronger and more innovative company. The entire Porex organization, led by President and CEO Bill Midgette, has done a tremendous job building this business, and we believe the company is very well-positioned to continue on its exciting trajectory with Filtration Group.”

The buyer of Porex, Filtration Group, provides filtration products and services used by customers in the food & beverage; water, micro-electronics & telecommunications; environmental air; medical & bioscience; hydraulics; mining & minerals; industrial finishing and energy industries. The company operates facilities in 20 countries under three operating divisions: Liquid/Process, Environmental Air and Fluid. Filtration Group is headquartered in Chicago (www.filtrationgroup.com).

“Aurora, and the board it put in place, have been incredible partners during a transformational period of growth for Porex. As a result of Aurora’s investment and support, we have elevated our performance, delivering our technology to world-class customers around the globe with record levels of innovation, speed and quality. Looking ahead, we are excited to partner with Filtration Group as we continue to expand our market-leading capabilities in porous polymer technology,” said William Midgette, President and Chief Executive Officer of Porex.

Aurora Capital focuses principally on control investments in middle-market industrial, manufacturing and service oriented businesses. The firm, founded in 1991, has $2 billion of capital under management and is headquartered in Los Angeles (www.auroracap.com).

Robert W. Baird & Co. acted as financial advisor to Porex.

© 2013 PEPD • Private Equity’s Leading News Magazine • 11-25-13

GenNx360 Acquires Horsburgh & Scott

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GenNx360 Capital Partners has acquired Horsburgh & Scott Co., a custom gearing manufacturer.

Horsburgh & Scott (H&S) manufactures, repairs, and services industrial gears and gear drives used in the steel, mining, wind, rail, and sugar industries. The company specializes in manufacturing medium and large diameter gears (up to 25 ft. in diameter). H&S has 350,000 square feet of manufacturing, repair, assembly and heat treating facilities. The company was founded in 1886 and has approximately 200 employees. H&S is headquartered in Cleveland (www.horsburgh-scott.com).

“With its proven management team and talented group of engineers, strong brand, and excellent customer relationships, we are very excited about the future prospects for H&S,” says Monty Yort, GenNx360 Managing Partner. “We expect to build on H&S’s legacy by leveraging our global C-suite relationships within the industry and executing on identified growth opportunities, both organically and through add-on acquisitions, as well as providing a valuable operating perspective to enhance an already exceptional company.”

GenNx360 Capital Partners is a private equity firm focused on investing in industrial business-to-business companies in the middle market. Sectors of interest include industrial machinery and components, oil and gas, transportation and logistics, agricultural, specialty chemicals, and aerospace. GenNx360 was founded in 2006 and is headquartered in New York with additional offices in Seattle and Boston (www.gennx360.com).

“Our goals are fully aligned with those of GenNx360. We are excited about this next step in the evolution of our company,” said Christopher Kete, H&S President and Chief Executive Officer. “GenNx360 has strong operational capabilities that perfectly fit our strategic focus for the next chapter.”

© 2013 PEPD • Private Equity’s Leading News Magazine • 4-1-13

CapStreet Acquires T.F. Hudgins

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The CapStreet Group has acquired T.F. Hudgins, a manufacturer of engineered products and services primarily to process industries and third-party manufacturers. 

T.F. Hudgins is a manufacturer of components used in gas compressors, centrifugal pumps and other machinery used at refining, petrochemical and gas processing facilities. The company also offers centrifugal filtration devices designed to increase the efficiency and longevity of heavy-duty diesel engines utilized in harsh operating environments, including trucking, mining, and enhanced oil and gas recovery technologies such as hydraulic fracturing.  T.F. Hudgins was founded in 1947 and has just over 100 employees with operations in Houston (headquarters) and New Orleans as well as sales and distribution subsidiaries in Venezuela and Australia (www.tfhudgins.com). 

“T.F. Hudgins’ business model is an excellent fit with CapStreet’s industry experience,” said Mike Young, a CapStreet partner.  “The company and its management team bring a legacy of long-term relationships with some of the most respected customers in the industry.  We are excited about this opportunity to help them build the business organically and through strategic acquisitions.” 

CapStreet targets companies with EBITDA’s between $5 million and $15 million and works closely with the management of these companies to help build much larger and more profitable enterprises. Since founding in 1990, CapStreet has raised approximately $700 million of private equity, completed 34 portfolio company investments and completed more than 250 add-on acquisitions for these companies. The firm is based in Houston (www.capstreet.com). 

“We are proud of our history of service, profitability, and industry leadership. Now is the ideal time to accelerate our growth, and we are excited to have a firm like CapStreet providing the financial resources and expertise in distribution, marketing and management to support our objectives,” said T.F. Hudgins President and CEO Ted Edwards. 

© 2013 PEPD • Private Equity’s Leading News Magazine • 2-12-13

First Reserve Acquires Ameriforge Group

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First Reserve Corporation has acquired Ameriforge, a manufacturer of products used in the oil and gas industry.  Ameriforge was owned by Post Oak Companies which is affiliated with Tanglewood Investments.  The executive management team of Ameriforge will remain in place and will retain an equity interest in the company. In addition, the three founders and principals of Tanglewood will be continuing equity investors in Ameriforge.

Ameriforge is a vertically integrated manufacturer of engineered products, subassemblies and integrated systems for the oil and gas, midstream, downstream, power generation, aerospace, transportation and industrial markets. The company has 29 facilities in five countries and is based in Houston, TX (www.ameriforge.com).

“First Reserve’s investment represents a key milestone for our company. During our partnership with Tanglewood, we were able to transform Ameriforge from a single location flange forging company focused on the North American market to a fully-integrated, 29 facility international manufacturing enterprise which is providing a growing array of highly technical products and related services to the global energy, aerospace and transportation industries. We believe our business model is uniquely poised for continued significant growth and could not be more pleased that we are beginning a new partnership with First Reserve,” said Gean Stalcup, CEO of Ameriforge.

First Reserve is a private equity firm with a focus on the energy industry.  The firm was founded in 1983 and has offices in Houston, TX; Greenwich, CT and London, UK (www.firstreserve.com).

“Our management team is highly confident that First Reserve’s experience and knowledge in the energy industry will assist us as we continue to grow our suite of products and related services to better serve our customer base around the world. We will also benefit substantially from First Reserve’s industry knowledge, financial strength and deep experience in providing companies like ours effective access to growth capital. Finally, I’d like to offer my personal thanks to the team at Tanglewood for their enduring support, to our employees for their tireless efforts in creating this enterprise and to our customers whose continued trust in our products and services has fueled our growth and success.”

Tanglewood invests in middle market equipment manufacturing companies serving the energy industry. The firm is based in Houston (www.tanglewoodinv.com).

“My two partners at Tanglewood and I could not be more pleased with this transaction. We are strong believers in the future of Ameriforge and have affirmed that conviction by our continuing personal investments in the company alongside First Reserve. I very much look forward to continuing my relationship with Ameriforge as a member of its Board of Directors. The time had come for Ameriforge to seek a larger and more capable financial partner in order for the company to realize its full potential. First Reserve is an ideal fit in every respect to be that partner,” said Michael Tiner, Managing Director of Tanglewood and current Chairman of Ameriforge Group.

Harris Williams & Co. is the exclusive advisor to Ameriforge.

© 2012 PEPD • Private Equity’s Leading News Magazine • 11-27-12

H.I.G. Capital Exits Texas Honing

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H.I.G. Capital has completed the sale of Texas Honing, a producer of components used in oilfield drilling, to Precision Castparts Corporation (NYSE: PCP).

“H.I.G. has been a valuable partner and sounding board for the Texas Honing management team. We have appreciated their guidance on strategic and financial initiatives as well as their support of the company’s growth ambitions,” said Robert Steele, CEO of Texas Honing.

Texas Honing is a producer of components used in oilfield drilling, completion, and production systems worldwide. Services include drilling, honing, boring, turning, skiving, off-center drilling, and CNC processing. The company was founded in 1976 and is based in Houston (www.texashoning.com).

“We have enjoyed phenomenal growth during our partnership with Texas Honing,” said Jeff Zanarini, a Managing Director of H.I.G. “We have supported the management team in achieving new standards of excellence across a number of capabilities, and the strong interest from a variety of international strategic players during this process is a testament to our success. We are thrilled with such an outstanding outcome for Texas Honing, H.I.G. and its investors. We have every confidence that the company will continue its pioneering leadership as a member of the Precision Castparts family.”

H.I.G. Capital specializes in providing capital to small and medium-sized companies and invests in management-led buyouts and recapitalizations of manufacturing or service businesses. Since its founding, H.I.G. has invested in and managed more than 200 companies and the firm’s current portfolio includes companies with combined revenues in excess of $8 billion. H.I.G. Capital has more than $8.5 billion of equity capital under management and is based in Miami, FL and has other offices in Atlanta, GA; Boston, MA; San Francisco, CA; London, UK; Rio de Janeiro, Brazil; Hamburg, Germany; and Paris, France (www.higcapital.com).

© 2012 PEPD • Private Equity’s Leading News Magazine • 10-25-12

Harvest Partners Acquire FCX Performance from Sterling

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Harvest Partners has completed the acquisition of FCX Performance, a distributor of industrial flow control products, from Sterling Investment Partners. Sterling will maintain a minority ownership stake in the company.

“As a leading independent provider of process flow control solutions, FCX has a strong reputation for technical expertise, customer service and a broad product and service offering required to serve a diverse set of end markets,” said Michael DeFlorio, Senior Managing Director of Harvest. “The company’s impressive track record of growth and successful acquisition history present an attractive opportunity for investment. We look forward to working with Charlie Simon, his senior management team and the entire FCX organization to support the future growth of the company.”

FCX is an industrial, specialty process flow control distribution company to more than 15,000 end users, original equipment manufacturers and engineering and construction firms across the process, energy and high purity industries. Products include valves, instruments, pumps, hoses, fittings and process flow control equipment. The company’s target end markets include chemicals; upstream, midstream and downstream oil and gas; power; steel; pulp and paper; pharmaceuticals; food and beverage and general industrials. Formed in 1999 and with predecessor company histories dating back to 1950, the company has 24 locations serving 32 states and over 350 employees. FCX has completed 13 strategic acquisitions since inception and is based in Columbus, OH (www.fcxperformance.com).

FCX’s management team, including founder and Chief Executive Officer Charles Simon, President and Chief Financial Officer Charles Hale, Executive Vice President Chris Hill and Chief Information Officer Russ Frazee, have been in place since 1999 and will continue to lead the company and maintain a significant investment.

“With the support of Harvest, FCX will accelerate its long-held strategy of expanding its geographic footprint and broad portfolio of mission-critical products and services through both organic and acquisition growth initiatives,” said Mr. Simon. “FCX has a demonstrated track record of growth, and we will continue to improve FCX’s position as a valued partner to our customers and vendors. We are very excited about our partnership with Harvest and our shared vision for the next phase of growth for FCX.”

Harvest Partners invests in management buyouts and growth financings. Sectors of interest include business and industrial services, manufacturing and distribution, healthcare, midstream energy, and consumer products and retail sectors. The firm was founded in 1981 and is based in New York (www.harvpart.com).

“As an industrial distributor focused on the process and energy verticals, FCX is positioned at the intersection of two investment focus areas in which Harvest has a longstanding commitment,” said Christopher Whalen, Managing Director at Harvest. “The company combines deep technical know-how with blue-chip vendor relationships to deliver solutions that ultimately improve uptime, safety and efficiency across a host of complex operating environments. Support for FCX’s continuing role as a leading consolidator of the flow controls industry is a central tenet of our investment strategy.”

Senior debt for this transaction was arranged by BMO Capital Markets and GE Capital, and mezzanine debt was provided by Oaktree Capital Management and New York Life Capital Partners. White & Case and Alvarez & Marsal advised Harvest. Robert W. Baird & Co. and Fulbright & Jaworski advised FCX and Sterling.

© 2012 PEPD • Private Equity’s Leading News Magazine • 10-19-12

The Sterling Group Exits Velcon Filters

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Parker Hannifin, a provider of motion and control technologies, has signed an agreement to acquire Velcon Filters, a manufacturer of filtration equipment and a portfolio company of The Sterling Group.

“Velcon is the leader in the jet fuel filtration market with a brand that has become synonymous with the highest standard for safety in the industry,” said Greg Elliott, Partner at The Sterling Group. “Under Sterling’s ownership, Velcon has seen a diversification of end-markets and geographies and has significant growth potential as part of Parker’s Filtration Group.”

Velcon Filters is a manufacturer of filtration equipment and replacement cartridges for the aviation, industrial fuel, and industrial process filtration markets. Velcon reported sales of $115 million for the twelve months ended August 31st, 2012 and has approximately 300 employees globally. The company is based in Colorado Springs, CO (www.velcon.com).

The Sterling Group targets controlling interests in basic manufacturing, industrial services and distribution companies that have enterprise values from $100 million to $500 million. Sterling has sponsored the buyout of 41 platform companies and numerous add-on acquisitions for a total transaction value greater than $9.5 billion. The firm was founded in 1982 and is located in Houston (www.sterling-group.com).

Parker Hannifin is a diversified manufacturer of motion and control technologies and systems for a variety of mobile, industrial and aerospace markets. The company employs approximately 60,000 people in 48 countries around the world. Sales in fiscal year 2012 were $13 billion. Parker Hannifin is based in Cleveland (www.parker.com).

© 2012 PEPD • Private Equity’s Leading News Magazine • 10-5-12

AEA Investors Acquires MaximSilex

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Industrial Acoustics Company, a portfolio company of AEA Investors, has acquired Maxim Silencers and Silex Innovations (“MaximSilex”), manufacturers of silencing and emissions control products.

MaximSilex specializes in the design, manufacture and supply of silencing and emissions control products, including industrial silencers, catalytic converters and exhaust accessories for diesel and natural gas engines. The company also offers software engineering to enhance the design and selection of exhaust systems. The company is based in Stafford, TX (hwww.maximsilex.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 (www.aeainvestors.com).

Westlake Securities advised MaximSilex throughout the sale process, including the preparatory, marketing, due diligence and negotiation phases of the transaction. Westlake Securities provides investment banking, capital markets and financial advisory services to family-owned businesses, privately held companies, private equity and venture capital funds and publicly traded companies. The firm is headquartered in Austin, TX with additional offices in Dallas and Houston and Lafayette, LA (www.westlakesecurities.com).

“Westlake’s team, led by Randy Finch, went above and beyond the call of duty for our family. Their knowledge of the market and professionalism made a challenging process more manageable. They helped us weather the emotional stress of selling a family company,” said MaximSilex’s President, Robert Cone.

© 2012 PEPD • Private Equity’s Leading News Magazine • 10-4-12

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