PE Weekly: Industrials, Tech-Enabled Business Services Drive M&A

Tech-enabled business services and industrials lead the way for a relatively slow week in M&A. But signs of more dealmaking in the New Year are clear: Two new investment platform launches were announced this week as investors brace for an improvement in dealmaking conditions. Read more about the latest deals and other activity in middle-market M&A below.

Platform Investments

Molior Growth Marks Launches with Acquisition of Western Storage & Handling. Denver-based Molior Growth Partners announced its first acquisition since launching, investing in Western Storage & Handling. Morlior specializes in lower middle-market infrastructure and industrial investments across the Midwest and Southeast. The firm, founded earlier this year, is making its debut with the acquisition of Western Storage, a designer, distributor and installer of material handling and storage equipment.

Trulink Capital Acquires Marketing Technology Company. Trulink Capital, a Los Angeles-based middle-market private equity firm, announced its investment in marketing technology company Ansira Partners. The acquisition TruLink’s fourth after launching in 2022. The private equity firm focused on the industrials and tech-enabled services sectors.

Platte River Forms Industrial Platform with TIPCO and HydraTech. Platte River Equity, a private equity firm focused on niche industrial companies, announced the formation of a new platform following its investments in TIPCO Technologies and HydraTech Industrial Solutions. The new platform, which will operate under the TIPCO Technologies name, is a distributor of fluid conveyance and sealing solutions. The combined entity encompasses 30 locations across 13 states, a press release said. 

Impel Capital Backs Sky Communications. Sky Communications, a provider of IT support and managed services, has secured investment from Impel Capital, a lower middle-market private equity firm. A press release said Impel’s acquisition of the company will fuel further M&A activity for SkyCom to drive growth.

E78 Partners Acquires PMI Consultancy. E78 Partners, a business advisory firm focused on private equity, announced this week its acquisition of Global PMI Partners USA, a post-merger integration consultancy serving the U.S. and Canada. The investment marks E78’s 13^th acquisition since its launch in 2016, a press release noted, and expands E78’s reach across the entire M&A lifecycle, from transaction through optimization and sale readiness.

Add-Ons

Makai Capital’s Paladin Acquires Chemical Manufacturer. Paladin holdings, a portfolio company of middle-market private equity firm Makai Capital Partners, announced its acquisition of Texize, a manufacturer of commercial and industrial cleaning products including soaps and detergents. With Makai’s support, Texize plans to expand its product offerings and grow production capacity, a press release said.

Olympus Partners’ Rise Baking Company Acquires Pie Facilities. Rise Baking Company, a portfolio company of middle-market private equity firm Olympus Partners, announced its acquisition of two pie facilities from Wonder Brands Holdings and FGF Brands. Rise Baking Company provides cookies, cakes, brownies and other baked goods to retail locations and foodservice providers across North America. Its investment in the pie facilities expands its product offering.

Exits

Vestar Capital Exits Foodservice Equipment Business to Sysco. Middle-market private equity firm Vestar Capital Partners announced the sale of portfolio company Edward Don & Co., a foodservice equipment and supplies distributor, in a press release this week. The firm is exiting the business to Sysco Corporation, a wholesale restaurant food distributor. While a part of Vestar’s portfolio, Edward Don expanded its customer base and grew its foodprint in the market, the announcement noted.

Strategics

SPAC to Acquire Electric Vehicle Battery Technology Business. TMT Acquisition Corp., a special purpose acquisition company (SPAC), has announced its acquisition of electric vehicle battery technology and energy storage systems business eLong Power Holding Limited. A press release said the companies have entered into a merger agreement and expect the transaction to close in the first half of 2024. The combined entity will operate under the name eLong Power Inc and will be listed on the Nasdaq Stock Exchange.

Insights

Investcorp to Launch Climate Solutions Investment Platform. Global investment manager Investcorp announced this week its plans to launch its Climate Solutions Investment Platform. With an anchor commitment by the Kingdom of Bahrain’s sovereign wealth fund, Mumtalakat, the climate change platform will target businesses that offer products, services and technology to drive decarbonization efforts. The platform will continue Investcorp’s focus on middle-market investments on a global scale.

Wafra, AP3 Form Investment Platform Covalent. A new investment platform focused on private equity co-investments was announced this week, the result of a partnership between The Third Swedish National Pension Fund (AP3) and global alternative investment manager Wafra. Covalent, as the investment platform is called, will pursue co-investments that combine Wafra’s and AP3’s resources and relationships. “By deploying flexible, patient capital and collaborating with highly skilled investment sponsors, we expect to continue to construct high quality portfolios of carefully selected private equity investments in targeted sectors alongside top tier investment firms,” stated Wafra managing director Steve Moseley.

S&P Global Analysis Eyes Industrials Investment Slump. Recent analysis by S&P Global Market Intelligence anticipates a significant year-over-year drop in industrials investments by venture capital and private equity investors. An announcement by S&P Global noted that by the end of 2023, data is likely to show a significant decline in industrials funding despite previous expectations for the sector to emerge as an attractive investment target amid macroeconomic turbulence. 2023 is on track to have the lowest total global investment by private equity and venture capital firms in the industrials sector since 2018, the data revealed.

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.