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In a volatile and challenging economic environment, private equity firms are turning their M&A attention towards add-on acquisitions. This week, add-ons were announced across enterprise, industrial, manufacturing and engineering spaces, to name a few.
And as dealmakers continue to get deals done despite the headwinds, Audax Private Debt anticipates continued M&A demand in the middle market with the close of its newest direct lending fund. Catch up on more of the latest acquisition, fundraising and research announcements below.
Astara Acquires Wyandot Snacks. Middle-market private equity firm Astara Capital Partners has acquired Wyandot Snacks via its Astara Capital Fund I, a press release said. Wyandot manufactures snack foods and cereal products. “As a result of Astara’s investment, Wyandot will benefit from being debt-free and having access to significant strategic, operational and financial resources of Astara,” stated the firm’s partner Lindsey Tannenbaum. The buyout marks the second acquisition from Capital Fund I.
Boyne Capital Invests in Business Process Outsourcing. Boyne Capital, a Florida-based private equity firm, has acquired business process outsourcing company Flatworld Solutions. Flatworld targets the banking, financial services and insurance space, as well as healthcare, software, IT, and other end-markets. The business uses artificial intelligence, machine learning and robotic process automation and skilled professionals to enhance its BPO offering.
Gemspring Backs Chicago Switchboard’s Acquisition. Middle-market private equity firm Gemspring Capital Management announced a minority investment in Chicago Switchboard to support its investment in IER Electrical. Chicago Switchboard provides custom electrical power distribution equipment. Gemspring’s Growth Solutions I fund, which focuses on non-control investments in the lower-middle market, made the investment in Chicago Switchboard, which will expand its geographic footprint through its acquisition.
Apax’s EcoOnline Acquires Alcumus software division. EcoOnline, an environmental, health and safety (EHS) Software-as-a-Service provider, announced its acquisition of the software division of UK-based Alcumus. Based in Norway, EcoOnline is backed by U.K. private equity advisory firm Apax Partners. The company’s investment in Alcumus will strengthen its position in the middle-market EHS software space. EcoOnline executive chairman Chris Joseph said the integration of Alcumus technology “is a strategic step forward.”
LongueVue’s Summit Plastics Makes Packaging Acquisition. Summit Plastics, a portfolio company of private equity firm LongueVue Capital and a manufacturer of custom packing solutions, announced its investment in Fredman Bag Company. The acquisition of the niche packaging manufacturer is the third buyout for Summit since LongueVue first invested in Summit in 2020, according to a press release.
Audax’s Flow Control Holdings Acquires Andon Stainless. Flow Control Holdings, a portfolio company of Audax Private Equity, announced its latest acquisition. The business, which provides sanitary flow components for the food, beverage and pharmaceutical spaces, has acquired Andron Stainless, which provides sanitary stainless steel fittings and other accessories. The investment includes the acquisition of Andron operations in the US and Canada. The investment marks Flow Control Holdings’ third add-on acquisition since Audax invested in the business in 2022.
OceanSound’s DMI Acquires Expense Management Business. DMI, a portfolio company of private equity firm OceanSound Partners that provides enterprise technology solutions, has announced its acquisition of expense management solution provider Simplex. Both businesses offer managed mobility services for corporate customers. The acquisition of Simplex strengthens DMI’s security, tracking and cost savings offerings for enterprise mobile ecosystems.
Stone Goff’s Walker Sands Acquires Marketing Business. Stone Goff Partners, a lower middle-market private equity firm, announced that its portfolio company Walker Sands, a B2B marketing agency, has acquired KoMarketing. The acquisition target similarly offers B2B marketing solutions and marks Walker Sands’ second buyout to-date. In its announcement, Stone Goff said the investment “deepens the firm’s existing capabilities in top-of-funnel demand generation activities, including paid digital advertising and SEO for B2B audiences.”
Longshore Capital’s Blue Wheel Adds Retail Bloom. Blue Wheel, a digital commerce agency, has acquired e-commerce marketplace agency Retail Bloom, a press release announced. Blue Wheel is a portfolio company of private equity firm Longshore Capital Partners. The acquisition raises Blue Wheel’s e-commerce revenue-under-management to more than $1 billion.
Godspeed Capital’s Stratus Makes Engineering and Architectural Acquisition. Stratus, an engineering and architectural advisory company and portfolio company of Godspeed Capital, has acquired Morris & Associates, Engineers, another engineering and architectural business. Morris & Associates services both the private and public sector and strengthens Stratus’ presence in the Southeast.
Levine Leichtman’s Capsa Healthcare Acquires Tryten. Capsa Healthcare, which provides highly engineered workflow products for health systems and pharmacies, has announced its acquisition of Tryten Technologies, which provides solutions that enable telehealth services. In a statement, Capsa CEO Eric Webb said the addition of Tryten “uniquely positions us to serve our healthcare provider partners with the widest product portfolio available to further provide expanded virtual care, improved patient engagement and efficient mobility for medical devices.” Capsa is a portfolio company of private equity firm Levine Leichtman Capital Partners.
Havencrest’s Apara Autism Center Announces Acquisitions. Apara Autism Center, a portfolio company of lower middle-market private equity fund Havencrest Capital Management, has acquired Autism Learning Collaborative (ALC), as well as Missouri operations of Early Autism Services (EAS). Both acquisition targets offer clinic- and home-based applied behavior analysis therapy to children and adolescents with autism spectrum disorder.
Beltmann Relocation Group Acquires Warn North American. Beltmann Relocation Group, a full-service corporate moving and storage company with more than $200 million in annual revenues, announced its acquisition of Warn North American. Ward is the second-largest van lines agent on the continent, and expands the size of its fleet of interstate drivers. Beltmann president Brett Battina said the merger creates “one of the largest and most dominant movers in the country.”
McKinsey Acquires Israeli AI Business. Global management consulting firm McKinsey & Company has announced its acquisition of Israeli artificial intelligence and machine learning company Iguazio, its first investment in the country. Merging Iguazio’s technology and team of AI experts will support McKinsey’s efforts to accelerate AI deployments, the company said, pointing to its QuantumBlack, AI solution currently in development. “The final element we have been working on is a technology solution that will accelerate AI deployment, embedding it in real-time and in any environment,” the press release said.
ScionHealth Acquires Cornerstone Healthcare Group. Just over a year since its inception, hospital operator ScionHealth announced its acquisition of Cornerstone Healthcare Group, adding 15 specialty hospitals and eight senior living facilities to ScionHealth’s operations. ScionHealth was formed in December 2021 through the combination of LifePoint Health and Kindred Healthcare.
Rock Hill Exits KV Power to Warren Equity. Private equity firm Rock Hill Capital said in a press release that its portfolio company, electrical infrastructure solutions provider KV Power, has completed its recapitalization and been acquired by PE firm Warren Equity. Following the recapitalization, KV Power acquired Station Electric, which KV founder and CEO Bryan Hoffman described as “a compelling next step in our growth trajectory through both acquisitions and organic growth.”
Quad-C Acquires Manufacturing Solutions Business. Middle-market private equity firm Quad-C Management said in a press release it has reached an agreement to acquire a manufacturing service provider from semiconductor material and solutions supplier Entergis. Entegris has offloaded QED, which provides polishing and metrology services for manufacturers supplying a variety of end-markets, including semiconductor, space, and military. The firm expects to complete its acquisition in the first quarter of the year.
Clearlake Exits FloWorks to Wynnchurch. Clearlake Capital has completed the sale of a majority stake in FloWorks International to Wynnchurch Capital, according to a press release. Clearlake will retain a minority stake in the business. FloWorks provides flow control solutions for maintenance and repair activities. Since Clearlake’s investment in the company, it completed seven acquisitions. Wynnchurch’s acquisition and recapitalization will support continued organic and acquisition growth.
Audax Private Debt Closes $3 Billion Fund. Audax Private Debt, a debt capital provider targeting middle-market private equity sponsors, has announced the close of Audax Direct Lending Solutions Fund II. Audax secured $3 billion in capital commitments, exceeding its initial target of $2.25 billion. Audax Private Debt now has $4.5 billion in total investible capital, a press release said. DLS Fund II will continue the investment strategy of DLS Fund I, providing senior secured unitranche finance, a form of hybrid debt often used my middle-market companies to fuel acquisitions, as well as stretch senior financing, often used to finance leveraged buyouts.
Sterling Closes $934 Million Fund. Sterling Investment Partners, a middle-market private equity firm, announced the close of Sterling Investment Partners IV at $934 million, surpassing its initial funding target of $900 million. “We have continued to grow by investing in our people and adding talented professionals, and plan to continue to do so with the successful closing of SIP IV,” stated Sterling managing partner and cofounder Bill Macey. The firm did not disclose its investment strategy for the fund.
Morrison Foerster Eyes 2023 M&A Trends. New research from law firm Morrison Foerster examines M&A trends for the year, finding private equity investors are fueling dealmaking thanks to the high volume of dry powder at their disposal. Citing MergerMarket data, Morrison Foerster notes that while M&A activity declined overall in 2022, PE buyouts were 50% higher, while exits were up 43% compared to 2015-2019 data. Looking ahead, PE buyout volume is expected to remain strong this year.
“Investors, both corporates and private equity, have sizable investment capital at the ready to take advantage of current valuations with many companies in need of liquidity while financing costs remain high,” says Spencer Klein, Morrison Foerster M&A partner and co-chair of the firm’s global Mergers & Acquisitions Group, in a statement sent to Middle Market Growth. “In this time of market recalibration, companies are staying nimble by increasing operational efficiencies, exploring alternative financing, separating businesses and preparing to defend against activist shareholders.”
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