Industrial

BC Partners and The Carlyle Group Acquire Hamilton Sundstrand Industrial

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BC Partners and The Carlyle Group today announced an agreement to acquire Hamilton Sundstrand Industrial, a manufacturer of pumps and compressors used in the industrial, infrastructure and energy markets, from United Technologies Corporation for $3.46 billion.

“Hamilton Sundstrand Industrial is a world-class platform and we are excited about the company’s significant growth prospects, including in key emerging markets,” said Raymond Svider, Co-Chairman and Managing Partner of BC Partners.

The transaction is expected to close in the fourth quarter of 2012.The investment in Hamilton Sundstrand will be funded in an equal partnership with equity from BC Partners and The Carlyle Group as well as third-party debt provided by a banking consortium. External debt financing commitments have been provided by Citigroup, Credit Suisse, Deutsche Bank, Morgan Stanley, RBC Capital Markets and UBS.

Hamilton Sundstrand comprises three businesses as follows: Sundyne is a manufacturer of high-speed pumps and compressors used principally for mission-critical, down-stream oil and gas and chemical/industrial infrastructure; Milton Roy is a provider of metering pumps used in chemical, oil and gas and water treatment applications; and Sullair is a global manufacturer of rotary screw air compressors used to power air-driven industrial equipment and tools used in the industrial manufacturing and the energy, mining and chemicals industries. Hamilton Sundstrand operates 19 manufacturing facilities in the U.S., France, China, Australia, the U.K., Spain and India and is headquartered in Windsor Locks, CT (www.hamiltonsundstrand.com).

BC Partners has $16.4 billion of capital under management and invests in companies in a variety of sectors that have significant European operations. The firm has offices in London, Hamburg, Milan, New York and Paris (www.bcpartners.com).

The Carlyle Group invests in buyouts, growth capital, real estate and leveraged finance in Africa, Asia, Australia, Europe, North America and South America focusing on aerospace & defense, automotive & transportation, consumer & retail, energy & power, financial services, healthcare, industrial, infrastructure, technology & business services and telecommunications & media. The firm is based in Washington, DC (www.carlyle.com).

Carlyle and BC Partners have a history of successful industrial investments including Carlyle’s ownership of Allison Transmission, Rexnord Corporation and AxleTech International and BC Partners’ investments in Brenntag, SGB-SMIT Group and Interpump.

KPS Capital Partners Acquires CWS Industries

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KPS Capital Partners today announced that its portfolio company International Equipment Solutions (IES) has acquired CWS Industries, a manufacturer of highly-engineered attachment products. This is the fourth acquisition by IES since its formation.

CWS is a manufacturer of highly-engineered attachment products, including tire manipulators, cable reelers, grapples, buckets and various large excavator attachment products. Its customers include a global network of dealers and end-users in the mining, oil & gas, forestry and construction markets. The company employs 140 people at two facilities, located in Surrey, British Columbia and Edmonton, Alberta, Canada (www.cwsindustries.com).

Financing for the transaction was provided by a syndicate of institutional investors agented by Regiment Capital Advisors and PNC Bank.

KPS formed IES in September 2011 as a platform for investments serving the construction, agriculture, landscaping, infrastructure, recycling, demolition, mining, and energy industries. At that time, KPS announced IES’s first two acquisitions, Paladin Brands Holding, Inc. and Crenlo LLC, from Dover Corporation. In November 2011, Stephen Andrews was retained as Chief Executive Officer of IES to lead the integration of the first two acquisitions and to grow and globalize the company. As part of its globalization strategy, IES acquired Siac do Brasil, a manufacturer of cab enclosures in Brazil, in June 2012. IES employs over 2,500 people and operates 15 manufacturing facilities in the United States, Germany, and Brazil. The company is based in Oak Brook, IL (www.iesholdings.com).

“We are very proud of the progress IES has made to date. In only a brief ten months, KPS has created a truly global manufacturing company as a result of four highly synergistic acquisitions. The company has dramatically improved its profitability under our ownership and exceeded all of our expectations for growth. IES continues to capitalize on opportunities to grow its business internationally, and we believe that with each acquisition and subsequent integration, IES increases the value proposition offered to its customers,” said Raquel Palmer, a Partner at KPS.

KPS Capital Partners is the manager of the KPS Special Situations Funds, a group of private equity funds with over $2.9 billion of committed capital focused on investing in restructurings, turnarounds and other special situations. KPS has created new companies to purchase operating assets out of bankruptcy; established stand-alone entities to operate divested assets; and recapitalized highly leveraged public and private companies. The KPS investment strategy targets companies with strong franchises that are experiencing operating and financial problems. The firm is located in New York, NY (www.kpsfund.com).

“The acquisition of CWS is another important step towards the globalization and diversification of IES. We are very impressed with CWS’s rapid growth trajectory, customer base, engineering capabilities and broad portfolio of highly engineered attachment products,” said Stephen Andrews, Chief Executive Officer of IES. “This acquisition not only strategically enhances our footprint with dealers in Canada and the U.S. Pacific Northwest, but also opens up IES to a growing base of sales relationships located internationally in South America, Russia and Asia. Additionally, the acquisition enhances IES’ product portfolio to include a suite of attachments with applications in the high-growth mining, oil & gas and forestry end-markets, which are currently underserved by IES. As demonstrated with both this acquisition and the acquisition of Siac do Brasil, IES remains committed to supporting our customer’s global expansion initiatives with localized supply, technical resources, and parts and service support. IES intends to invest significant additional capital and resources into CWS to ensure the highest level of production quality and capacity for our customers. IES has made tremendous progress in our first ten months and I am very confident our future is bright.”

May River Capital Acquires Hi-Tech Manufacturing

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May River Capital has announced the acquisition of Hi-Tech Manufacturing in partnership with management, the Pohlad family, Yukon Capital Partners, and other co-investors. Cleary Gull served as financial advisor to Hi-Tech and the selling shareholders in this transaction.

Hi-Tech is a manufacturer of low-to-medium volume, mission-critical precision machined components and assemblies for the energy, medical equipment, scientific laboratory and industrial end markets. The company is based in Schiller Park, IL (www.hi-tech-mfg.com).

“We are excited to partner with May River, the Pohlad family and Yukon. Our new partners provide significant capital backing, strategic support and experience in the manufacturing sector, as well as within our core end-markets, that will help our company continue to grow and deliver world class quality, service and value to our customers,” said Tim Weaver, CEO of Hi-Tech.

May River raises equity capital on a deal-by-deal basis from family offices, mezzanine funds, co-invest funds, industry executives, high net worth individuals, and other private equity firms. May River was founded in January 2012 and is based in Chicago, IL (www.mayrivercapital.com).

“Hi-Tech’s talented management team, strong customer relationships, demonstrated track record of growth, and commitment to operational excellence were central to our interest in the company. Tim and his team relish competition and excel in it,” said Dan Barlow, Partner of May River.

Fifth Third Bank provided senior debt financing, while Yukon Capital Partners provided subordinated debt financing beyond its equity co-investment.

Sentinel Capital Partners Exits LTI Boyd

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Sentinel Capital Partners announced today the sale of LTI Boyd, a manufacturer and supplier of high performance, custom engineered components for large, multinational OEMs. During Sentinel’s ownership, LTI Boyd’s revenue increased nearly five-fold through organic growth and the completion of three acquisitions. “We are extremely pleased with LTI Boyd’s performance,” said John McCormack, Senior Partner at Sentinel. “We have been fortunate to partner with LTI Boyd’s talented management team and wish them continued success as they enter their next stage of growth.”

LTI Boyd manufactures products for gasket, sealing, insulation, and impact protection applications in the heavy truck, recreational vehicle, enterprise electronics, off-highway, aerospace, and consumer electronics markets. LTI Boyd operates seven manufacturing facilities across the United States and in China. The company is based in Modesto, CA (www.ltiboyd.com).

“Sentinel was an ideal partner for our team,” said Mitch Aiello, LTI Boyd’s CEO. “Sentinel’s support and help was a crucial component of LTI Boyd establishing its leading market position.”

Sentinel Capital Partners invests in smaller middle market companies in the United States and Canada in partnership with management. The firm invests in management buyouts, recapitalizations, corporate divestitures, and going-private transactions of established businesses with EBITDAs of between $7 million and $35 million. Sectors of interest include aerospace & defense, business services, consumer, distribution, food & restaurants, franchising, healthcare products and services, and industrials. The firm is located in New York, NY n(www.sentinelpartners.com).

Robert W. Baird & Co. advised LTI Boyd in the transaction. William Blair & Company served as co-advisor. Kirkland & Ellis served as legal advisor to LTI Boyd.

Hammond, Kennedy, Whitney & Company Exits OakRiver Technology

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It was announced today that Hammond, Kennedy, Whitney & Company has sold its portfolio company OakRiver Technology, a manufacturer of automation equipment, to PaR Systems.

OakRiver Technology is now part of the new PaR Life Science and Process Automation group and will serve as a platform to lead PaR Systems’ expansion in the life sciences market.

OakRiver Technology is a manufacturer of high precision automation equipment to the medical device and high tech industrial sectors. The company is based in Oakdale, MN (www.oakrivertechnology.com).

PaR Systems is a designer and manufacturer of automation equipment and a portfolio company of MML Capital Partners. Industries served include aerospace, defense/marine, hazardous material/nuclear, heavy material handling, industrial manufacturing, and life sciences. The company was founded in 1961 and is based in St. Paul, MN (www.par.com).

“OakRiver Technology brings to PaR deep engineering talent with superior technology know-how. They have a great combination of strong operational and engineering expertise and focus while sustaining steady growth. Like PaR, their customer base views them as a trusted partner for demanding and complex solutions and they continually adopt new technologies to add to their solutions arsenal. We are excited about the market opportunities OakRiver brings to the mix, and pleased to add this quality organization to the PaR family,” said Mark Wrightsman, President and CEO of PaR Systems.

Greene Holcomb & Fisher (GH&F) served as the exclusive financial advisor to OakRiver Technology. GH&F, with offices in Minneapolis, Phoenix, Seattle and Atlanta, is an investment banking firm that specializes in mergers and acquisitions, private placements and financial advisory services for the middle market (www.ghf.net).

“OakRiver is an extremely well-run company with an outstanding management team and track record of delivering high quality engineered products to its customers. We worked together with the management team and HKW to find a strong partner for the business in PaR Systems,” said GH&F Managing Director, Ken Higgins.

Hammond, Kennedy, Whitney & Company invests in companies with revenues between $20 million and $200 million and EBITDAs between $2 million and $20 million. Over the past 29 years, HKW has completed 40 platform management buyouts of small middle-market companies throughout North America as well as 42 add-on acquisitions. The firm is headquartered in Indianapolis, IN with an additional office in New York, NY (www.hkwinc.com).

Genstar Capital Acquires Hi-Tech Machine

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MW Industries, a manufacturer of specialty springs and fasteners and a portfolio company of Genstar Capital, announced today that it has completed the acquisition of substantially all of the assets of Hi-Tech Machine. “We continue to identify growth oriented companies and to successfully integrate them into our growing platform,” said Bill Marcum, CEO of MW Industries. “We have been working to build the company into a leading national competitor and each strategic acquisition has added enhanced product offerings and broadened MW’s geographic reach.”

Hi-Tech is a precision machining business that serves the medical, aerospace, military/defense and hand power tool markets. The company is based in of Concord, NC (no website found).

MW Industries is a provider of highly engineered springs, specialty fasteners and other precision components to more than 23,000 customers. Its 40,000 plus products are sold through a combination of direct sales, catalogs and distributors to original equipment manufacturers and aftermarket customers in a number of industries, including medical, heavy truck, electronics, agriculture and construction, military and aerospace, energy and automotive. The company is based in Logansport, IN (www.mw-ind.com).

It is planned that Hi-Tech’s equipment and customers will be integrated into MW’s Springmasters Division, based in Greer, SC, over the next few months. Brad Gryder, Owner and President of Hi-Tech, will be joining the Springmasters Organization to work on integration of the existing business base and drive growth opportunities.

Genstar Capital invests in middle-market companies and builds value in those businesses by utilizing the expertise of its operating partners. Genstar has more than $3 billion of committed capital under management and targets investments within the life sciences, healthcare services, financial & business services, software & software services and industrial technology industries. The firm was founded in 1988 and is based in San Francisco, CA (www.gencap.com).