Crestview Partners has agreed to sell JR Automation Technologies to Hitachi for $1.4 billion. Crestview acquired JR Automation in March 2015 from Huizenga Automation Group. A source close to Private Equity Professional reports that this transaction netted Crestview a 7.5x return on its equity. With a four-year hold this calculates to a 65% IRR.
JR Automation is a designer and manufacturer of automated or operated assembly line equipment such as sonic welders, riveters, adhesive dispensers, vision inspectors and verifiers, leak testers, robotic palletizers, and other equipment. The company’s products are used in the automotive, aerospace and defense, life sciences, battery and energy, electronics and consumer goods, food and beverage, construction and amusement industries.
JR Automation has more than 2,000 employees and facilities in 23 locations in North America, Europe, and Asia. The company was founded in 1980 and is headquartered in Holland, MI (www.jrautomation.com).
As a result of this acquisition, Hitachi will enter the North American robotic systems integration sector that is experiencing growth of more than ten percent per year. The buy of JR Automation follows Hitachi’s acquisition of KEC Corporation, a Japanese robotic system integrator in March 2019. Additionally, the acquisition of JR Automation will allow Hitachi to expand its Lumada Solution business which is active in data analytics, internet of things (IoT) platform components, artificial intelligence and machine learning.
“The team at Crestview is incredibly proud of the dramatic growth and transformation of JR resulting from our successful partnership with the JR team,” said Alex Rose, a partner and the co-head of industrials at Crestview. “We want to thank outgoing Chairman Mike DuBose and CEO Bryan Jones as well as the rest of JR’s employees for their hard work and dedication. Since our investment in JR in 2015, the company has grown dramatically from $170 million in revenues and five production facilities in North America to more than $600 million in revenues and 23 facilities worldwide.”
Crestview invests from $100 million to $250 million in companies with enterprise values up to $3 billion. Sectors of specific interest include media, industrials, energy and financial services. The firm will invest in other industries where its relationship network and senior operating capabilities provide an advantage. Crestview, founded in 2004 and headquartered in New York, manages funds with over $9 billion of aggregate capital commitments (www.crestview.com).
“It has been a privilege to work with the very talented teams from JR and Crestview,” said Mike DuBose, outgoing chairman of JR Automation. “Over the past four years, we have built on JR’s strong entrepreneurial passion for custom automated solutions and put in place systems and processes that have allowed the company to rapidly scale around the world. JR has become the largest independent provider of custom automation systems in North America while simultaneously increasing revenue generated internationally to approximately 25% of the company. With the global resources of Hitachi continuing to support the JR Automation team, JR will be able to continue on its phenomenal growth trajectory.”
Hitachi (TSE: 6501) is a multinational conglomerate with products and services in a number of industries. The company, headquartered in Tokyo with more than 300,000 employees worldwide, had revenues in 2018 of $88 billion (www.hitachi.com).
Goldman Sachs & Co. (www.goldman.com) and BofA Merrill Lynch (www.bofaml.com) were the financial advisors to JR and the selling shareholders. Mitsubishi UFJ Morgan Stanley Securities was the financial advisor to Hitachi.
This transaction is expected to close in the second half of 2019 and is subject to various closing conditions including regulatory approvals.
© 2019 Private Equity Professional | April 24, 2019
