PE Weekly: Specialty Manufacturing M&A Shines

Specialty manufacturers dominated the list of acquisitions announced this week by private equity firms and strategic buyers. Plus, a new report from investment bank Canaccord Genuity shows an uptick in global M&A activity in the first quarter.

Platform Investments and Acquisitions

Factor89 Group Acquires Master Magnetics. Factor89 Group, a PE firm focused on the manufacturing and distribution industry, has acquired Master Magnetics, a magnets manufacturer and distributor.

One Equity Partners Acquires Associated Spring. One Equity Partners, a PE firm focused on the industrial, healthcare and technology sectors, completed the acquisition of Associated Spring, a manufacturer of custom parts, from global industrial technology and aerospace manufacturer Barnes Group Inc. (NYSE: B).

H.I.G. Capital Acquires Segers. An affiliate of H.I.G. Capital, an alternative investment firm, has acquired Segers Aero Corporation, a military platform maintenance company. Segers works with companies such as Rolls Royce, Lockheed Martin and Honeywell.

Broad Sky Partners Acquires Punctual Pros. Broad Sky Partners, a PE firm specializing in business and consumer services, acquired Punctual Pros, a residential services franchisee operator.

Add-Ons

Luxium Solutions to Acquire Inrad Optics. Luxium Solutions, a portfolio company of SK Capital Partners and Edgewater Capital Partners, announced that it will acquire Inrad Optics, a manufacturer specializing in glass, crystal and metal-based optical components and assemblies.

Custom Made Meals Acquires Hearthside Food Solutions Assets. Custom Made Meals, a food supplier and a portfolio company of Stellex Capital Management, announced its acquisition of the Jacksonville, Florida, assets of Hearthside Food Solutions, a contract food manufacturer. The acquisition will expand Custom Made Meals’ regional footprint and is intended to improve the efficiency of the company’s distribution network.

Fenix Parts Acquires Neal Auto Parts. Fenix Parts, a portfolio company of Stellex Capital Management, announced its acquisition of Neal Auto Parts, a recycler and reseller of original equipment manufacturer automotive parts based in Peoria, Illinois.

CoreRx Acquires Societal CDMO. CoreRX, a drug developer and contract manufacturer backed by QHP Capital, announced that it has acquired Societal CDMO (Nasdaq: SCTL), a contract development and manufacturing organization that focuses on small molecule therapeutics.

Highland Commercial Roofing Acquires Fidelity Roof Company. Highland Commercial Roofing, a commercial roofing service provider backed by HCI Equity Partners, announced that it has acquired Fidelity Roof Company, a full-service roofing provider operating in the Northern California Bay Area. This is Highland’s second acquisition since HCI’s initial platform investment.

Strategics

Waverly Advisors Acquires McShane Partners. Waverly Advisors, an investment advisory firm, has acquired McShane Partners’ investment advisory business. This is Waverly’s third acquisition this year, after its acquisition of StrategIQ Financial Group and EFP Advisors.

Spendesk Acquires Okko. Spendesk, a spend management platform, has acquired Okko, a SaaS solution for procurement and vendor onboarding. This deal is meant to make Spendesk the first European company to fully integrate procurement and spend management for middle-market companies, according to a press release.

Fundraising

Adams Street Partners Raises $1 Billion for Middle Market CLO. Adams Street Partners, a private markets investment firm, announced the closing of a $1 billion middle-market CLO, ASP Summa. This is Adams Street Partners’ first CLO and comprises a portfolio of senior loans from PE-backed mid-market companies.

SK Capital Closes Fund VI at $2.95 Billion. SK Capital, a private investment firm that focuses on the specialty materials, ingredients and life sciences sectors, announced the final closing of its Fund VI, exceeding its target at $2.95 billion.

Compass Group Equity Partners Closes Fund III at $408 Million. Compass Group Equity Partners, a St. Louis-based private equity firm, announced that it closed Compass Group Fund III, hitting a hard cap of $408 million. This marks the firm’s second fundraising effort in the past two years, according to a press release.

Insights

Canaccord Genuity Report Finds Improving M&A Environment in Q1. A recent report from investment bank Canaccord Genuity shows that M&A activity is on the rise globally in the first months of 2024. Larger transactions are driving the increase, with global deals over $1 billion increasing by 26% compared to the same time last year.

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.