Manufacturing

KPS Capital Partners has announced that its portfolio company International Equipment Solutions (“IES”) has acquired Siac do Brasil Ltda. (“Siac”) from SIAC S.p.A. This is the third acquisition by IES since its formation. 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 also announced IES’s first two acquisitions, Paladin Brands Holding and Crenlo from Dover Corporation. In November 2011, Mr. Stephen Andrews was retained as Chief Executive Officer of IES to lead the integration of IES’ first two acquisitions and to aggressively grow and globalize the company.

“The launch of IES has exceeded all of our expectations. In a brief nine months, we have created the leading independent engineered equipment company in the Western Hemisphere, completing three highly synergistic acquisitions and successfully transforming a purely U.S. company into a global competitor,” said Raquel Palmer, a Partner at KPS. “We are very excited about cooperating with SIAC and together our companies will p

rovide our customers with global manufacturing and service solutions. We look forward to continuing to aggressively grow IES through acquisitions around the world.”

Siac do Brasil is a manufacturer of cab enclosures and also manufactures locomotive cabs as well as complex fabrications for off-highway machinery, and its customers include original equipment manufacturers involved in the construction, infrastructure, mining, forestry and agriculture industries (www.siac.com.br).

International Equipment Solutions (IES) is an engineered equipment platform serving the construction, agriculture, landscaping, infrastructure, recycling, demolition, mining, and energy markets. IES operates through six operating units, including Paladin, Genesis, Pengo and Jewell, all of whom are leading manufacturers of engineered attachment tools for operator driven equipment, Crenlo, a leading North American manufacturer of cab enclosures for operator-driven equipment as well as specialty electronic enclosures, and Siac do Brasil, a supplier of heavy equipment cab enclosures and locomotive sub-assemblies in the South American market. IES’ customers include major OEMs, national rental fleet companies and hundreds of independent and OEM-aligned dealers. 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).

“The acquisition of Siac do Brasil is a critical strategic step in the growth and globalization of IES. We are very impressed with the company’s rapid growth trajectory, customer base, quality and technical capabilities. The acquisition not only expands many of our current North American OEM supply partnerships into the Brazilian market, but further broadens our customer base as well. Additionally, the acquisition introduces IES as an important supplier in the rapidly growing Brazilian locomotive market,” said Steve Andrews, Chief Executive Officer of IES.

“As demonstrated with this acquisition, IES will continue our commitment toward 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 Siac do Brasil to ensure the highest level of production quality for our customers and to increase capacity not only for cabs, but to support the growth of IES’ attachment tools product lines in South America as well. IES has made tremendous progress in our first nine months and I believe our future is very bright.”

SIAC S.p.A. is one of the largest global manufacturers of cab enclosures. In particular, SIAC S.p.A. specializes in the design and manufacture of driver units, complete cabs and components for earth moving and agricultural machinery and equipment. SIAC S.p.A. serves original equipment manufacturers through operations based in Italy, Slovenia, Bosnia, Brazil and India. The company was founded in 1966 and is headquartered in Bergamo, Italy (www.siac-cab.eu).

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

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).

Royal Adhesives & Sealants, a portfolio company of Arsenal Capital Partners, has announced that Royal will acquire substantially all of the assets of Clifton Adhesives, a provider of adhesives and coatings. “Clifton has a long history supplying adhesives to the demanding aircraft and marine markets. The acquisition of Clifton and merger with Royal represents another important milestone in our strategy to further build a leading adhesives, sealants and coatings business offering customized and proprietary solutions and is the third Royal acquisition in the last six months underscoring our determination to build a market leading adhesives, sealants and coatings business,” said Tim Zappala, a Partner at Arsenal Capital.

Clifton Adhesives is a supplier of thermoplastic (polyurethane) and elastomeric (polychloroprene) adhesives and coatings to the aerospace, military, recreational and commercial marine markets. The company’s products are used in the fabrication of inflatable structures. Clifton Adhesives is based in Wayne, NJ (www.cliftonadhesive.com).

“We continue to identify leading niche companies that will enhance our product offerings to the markets in which we have chosen to compete. The addition of Clifton will broaden our customer base in the aircraft and marine markets,” said Ted Clark, Chief Executive Officer of Royal. “Clifton’s elastomeric adhesives will add to our growing portfolio of leading adhesives and sealants technologies and we look forward to working with the Clifton team to successfully integrate the Clifton business into Royal.”

Royal Adhesives & Sealants is a producer of proprietary, high-performance adhesives, sealants, coatings and polymers. Royal offers a range of specialty formulated products designed to solve complex bonding, laminating and sealing supplications across a range of markets, including aerospace and defense, construction, specialty packaging, automotive and industrial. The company is based in South Bend, IN (www.royaladhesives.com).

Arsenal Capital acquired Royal in 2010 and since grown the company organically and through targeted acquisitions. Shortly after completing the purchase by Arsenal Capital, Royal acquired Para-Chem, a provider of specialty adhesives, coatings and polymers. In November 2011, Royal acquired Craig Adhesives a supplier of ultraviolet light cured adhesives and coatings and in April 2012 added Extreme Adhesives, a supplier of reactive assembly adhesives.

“We are building the Royal adhesives business in part by selectively identifying niche acquisitions in this specialty sub sector where we can apply our deep industry knowledge to achieve enhanced growth. We are well on our way to building a strong company that will itself become a leading competitor on a global scale,” said John Televantos, a Partner at Arsenal Capital.

Arsenal Capital Partners makes investments in middle-market specialty industrial, healthcare and financial services companies with $50 million to $400 million in enterprise value. The firm invests in niche industry sectors where it has prior experience and where its operating resources can help facilitate incremental growth and margin improvement. Industries of specific interest include: specialty & fine chemicals; segments of healthcare; transportation and logistics; power generation; aerospace & defense; process industry components and services; and financial services. Arsenal currently has $800 million of committed equity capital and is based in New York, NY (www.arsenalcapital.com).