precision components

ARCH Global Precision, a portfolio company of Strength Capital Partners and Main Post Partners, has been acquired by The Jordan Company.

ARCH is a manufacturer of tight tolerance, precision components and consumable cutting tools and instruments. The company manufactures parts for the automotive industry as well as specialized tools for the industrial, medical and dental industries.

In February 2019, ARCH acquired Fort Wayne, IN-based sister companies American Tool Service, a manufacturer of custom and standard carbide end mills, and OrthoGrind, a provider of grinding services for medical instruments including drills, taps, reamers and extractors. This transaction was the seventeenth acquisition ARCH has completed since the platform was formed in 2011.  ARCH, led by CEO Eli Crotzer, is headquartered in the Detroit suburb of Livonia, MI (www.archglobalprecision.com).

“On behalf of the entire ARCH team I would like to thank the good folks at Strength Capital Partners and Main Post Partners for their support and partnership over the last several years,” said Mr. Crotzer. “Together we have achieved an extraordinary number of important milestones in building ARCH into a leading high precision metalworking platform.”

Strength Capital Partners invests in companies that have from $2 million to $20 million of EBITDA. Sectors of primary interest include manufacturing, distribution, infrastructure and industrial services. Since its founding in 2000, the firm has invested $450 million in equity across 23 platform companies and 40 add-on acquisitions. Strength Capital has offices in Birmingham, MI; Cincinnati, OH; and Denver, CO (www.strengthcapital.com).

“We are thrilled by this excellent outcome.  Our investors will receive a very good return on their investment and the company is getting an ideal partner for the next leg of its incredible growth,” said Mark McCammon, a managing partner at Strength Capital Partners.

“We are grateful to the management team at ARCH who have led a significant transformation in ARCH’s business since our investment, and we wish them well under new ownership,” added Scott Bell, a partner at Main Post.

Main Post makes both control and non-control investments in consumer, business services and industrial companies with revenues of $25 million to $250 million and EBITDA of $5 million to $25 million. The firm was founded in April 2014 by managing partners Sean Honey and Jeffrey Mills, both former partners at Weston Presidio. Main Post is headquartered in San Francisco (www.mainpostpartners.com).

“We are delighted to be partnering with the ARCH management team to support its next phase of growth.  ARCH is an industry-leading platform with a best-in-class management team.  We will continue to invest heavily in the business to support organic growth and strategic acquisitions,” said Mike Denvir, a partner at The Jordan Company.

The Jordan Company is a middle-market private equity firm with over $6 billion of assets under management.  The firm was founded in 1982 and is headquartered in New York with an additional office in Chicago (www.thejordancompany.com).

Lincoln International (www.lincolninternational.com) was the financial advisor to ARCH on this transaction.

© 2019 Private Equity Professional | April 2, 2019

Genstar Capital has sold Tecomet, a manufacturer of components for the medical device and aerospace & defense markets, to Charlesbank Capital Partners. As part of this transaction, Genstar is maintaining a minority equity interest in the company.

Tecomet manufactures a range of products used in the medical and aerospace & defense industries. Its products include orthopedic implants, surgical instruments, trauma plates and photochemical etched products for medical device customers. For the aerospace & defense industry, the company manufactures components used in missile and satellite propulsion systems, commercial aviation, vision systems, and infrared applications. Tecomet operates sixteen manufacturing facilities in five countries around the world and employs over 2,500 people. The company, led by CEO Mark Kemp, was founded in 1964 and is based in Wilmington, MA (www.tecomet.com).

This is the second time that Charlesbank has invested in Tecomet. In 2008, Charlesbank acquired Tecomet from Cardinal Health and later sold the company to Genstar in December 2013. “Our first investment in Tecomet was very successful, and we are even more excited about the business today,” said Brandon White, Managing Director at Charlesbank. “Tecomet continues to have strong customer relationships, differentiated capabilities, and attractive demographic tailwinds. The business should not only benefit from continued growth in outsourcing penetration, but also have significant opportunities to further consolidate the industry. We believe these strengths make Tecomet a very compelling investment.”

During its slightly more than three-year term of ownership, Genstar completed three add-on acquisitions for Tecomet: in October 2016 it acquired Mountainside Medical, a Boulder, CO-based supplier of medical device components and instruments used in minimally invasive surgical devices; in December 2014, it acquired the OEM Solutions business of Symmetry Medical. OEM Solutions, based in Warsaw, IN, manufactures surgical instruments, orthopedic implants, and plastic and metal sterilization cases and trays; and in August 2014 it acquired 3D Medical Manufacturing, a manufacturer of medical device components, implants, instruments, cutting tools and mechanical/electro-mechanical assemblies based in Riviera Beach, FL.

Through the three add-on acquisitions and through organic growth the company more than quadrupled in size under Genstar. “We are very pleased with Tecomet’s development, which was achieved via strong organic growth as we broadened and diversified the company’s capabilities to strengthen its value proposition in existing sectors of the medical and aerospace markets, in addition to expanding into new high-growth sectors,” said Rob Rutledge, a Managing Director of Genstar.

Both Charlesbank and Tecomet see significant opportunity to continue the growth strategy that they began in 2008.

Genstar, which close its eighth fund with $3.95 billion in commitments in March 2017, invests from $50 million to $400 million in middle-market companies that have enterprise values from $50 million to $1 billion and EBITDAs greater than $15 million.  The firm targets investments in the financial services, software, industrial technology, and healthcare industries.  Genstar was founded in 1988 and is based in San Francisco (www.gencap.com).

Charlesbank Capital Partners invests in management-led buyouts and growth capital financings in companies with enterprise values of $150 million to $1.5 billion. The firm has offices in Boston and New York (www.charlesbank.com).

Charlesbank was advised both by Jefferies Group and Robert W. Baird. William Blair & Company advised Tecomet.

© 2017 Private Equity Professional | May 15, 2017