PE Weekly: Industrials, Manufacturing M&A Kickstart 2024 Dealmaking

The industrials and manufacturing sectors continue to showcase their resiliency in middle-market M&A this week, but a few other sectors shine through as well. The food and beverage market saw one deal, while a high-profile and controversial transaction in the talent agency space also made headlines this week.

Platform Investments

Pharos Capital Backs RhythMedix. Middle-market private equity firm Pharos Capital Group announced it has acquired a majority stake in RhythMedix, a remote cardiac monitoring system manufacturer. Pharos is placing Dan Delaney, former CEO of previous Paros portfolio company TechLab, on RhythMexis’ board to represent the PE firm.

Blue Wolf Finalizes LOGISTEC Acquisition. Blue Wolf Capital Partners, a middle-market private equity firm focused on the industrials and healthcare markets, announced its completed acquisition of LOGISTEC Corporation. The deal was first announced in October, with Blue Wolf partnering with Stonepeak, an alternative investment firm also focused on the infrastructure space. The transaction is valued at approximately $900 million. LOGISTEC provides marine and environmental services for the infrastructure and industrial industries.

L2 Acquires Hardwood Sports Flooring Manufacturer. L2 Capital Partners, a lower middle-market private equity firm, announced this week its acquisition of Robbins Sports Surfaces. The company manufacturers hardwood basketball floors for elementary, middle and high schools, colleges, and NCAA and NBA teams.

Grove Mountain Takes Majority Stake in HVAC Wholesale Distributor. Grove Mountain partners, a private equity firm focused on home service and business service companies, announced this week its acquisition of a majority stake in plumbing and HVAC wholesale distributor Plumpton and Hills. Grove Mountain said it is actively seeking additional wholesale plumbing and HVAC equipment companies to expand the platform.

Altamont Capital Invests in Mini Melts. Altamont Capital Partners announced its investment in frozen novelty brand Mini Melts, according to a recent press release. The backing from Altamont will enable the company to expand its distribution footprint and manufacturing capabilities.

Orangewood Partners Backs SERVPRO West Coast DRT. Orangewood Partners, a private equity firm, announced this week its investment in SERVPRO franchisee SERVPRO West Coast DRT. The company provides residential and commercial property cleaning, restoration and reconstruction services. With investment from Orangewood, the company plans to accelerate business growth and enter into new geographic markets.

Add-Ons

Godspeed Capital’s Crimson Phoenix Acquires Cybersecurity Business. Lower middle-market defense and government solutions and technology-focused private equity firm Godspeed Capital has announced a new add-on acquisition. Platform company Crimson Phoenix, a data and intelligence analysis platform supporting the U.S. intelligence community, has acquired Cyberspace Solutions. The investment adds new contracts and relationships with U.S. Special Operations Command and the Defense Intelligence Agency to Crimson Phoenix’s portfolio, a press release said.

Crestview’s Gersh Acquires A3 Artists Agency Assets. Gersh, a talent and literary agency, has announced the completed acquisition of the digital and alternative departments of A3 Artists Agency, reports in The Hollywood Reporter said. The acquisition follows less than a month after a lawsuit was filed against A3’s chairman seeking to block the sale. Private equity firm Crestview Partners acquired a 45% stake in Gersh last July, marking the company’s first equity partner since its founding in 1949.

Blue Point’s Transtar Acquires Arch Auto Parts. Blue Point Capital Partners, a private equity firm, said this week its portfolio company Transfar Holding Company has acquired Arch Auto Parts, a parts distribution company based in the greater New York City area. The investment follows Transtar’s acquisition of C&M Auto Parts in early 2023. Blue Point said it plans to pursue additional acquisitions for the platform.

Strategics

Patrick Industries Takes Sportech from Monomoy Capital. Monomoy Capital Partners, a private investment firm focused on middle-market private equity, announced this week it is exiting manufacturer Sportech to component products and building materials manufacturer Patrick Industries. Sportech services OEM customers with its designing and manufacturing of cab components and assemblies. Monomoy first invested in the business in 2019.

Exits

Vontier Exits Coats to Victor Capital. In a $72.5 million transaction, Vontier Corporation, an industrial technology company, is selling its Coats business to middle-market private equity firm Victor Capital Partners. Coats manufactures wheel service, alignment, lift and inspection equipment for the automotive industry. Vontier said proceeds from the sale will support debt reduction and share repurchases.

Insights

Alvarez & Marsal Launches AI Diligence Tool. Alvarez & Marsal, a global professional services firm, announced the launch of A&M DiligenceGPT, an artificial intelligence-powered platform designed to provide private equity firms with insights to support their diligence workflows. The solution was developed by the firm’s Private Equity Performance Improvement group, and is able to analyze large volumes of documents to help PE practitioners more efficiently develop an initial thesis.

ArcLight Capital Forms Alpha Generation to Oversee Power Infrastructure Portfolio. ArcLight Capital Partners, a middle-market private equity firm focused on the infrastructure space, announced the formation of Alpha Generation. The entity will oversee and operate power infrastructure assets within ArcLight’s portfolio, a press release said, with nearly $2 billion in annual revenue.

MidOcean Partners, Kroger Collaborate on Emerging Brands Platform. Middle-market private equity firm MidOcean Partners has announced a new collaboration with retail conglomerate Kroger to introduce emerging consumer packaged goods brands to market, according to a recent press release. Kroger’s consumer investment platform PearlRock will collaborate with MidOcean to form MPearlRock to identify and invest in emerging brands.

Middle Market Growth is produced by the Association for Corporate Growth. To learn more about the organization and how to become a member, visit www.acg.org.