ITOCHU International Inc. is the North American flagship company of the Japan-based trading company, ITOCHU Corporation. Industrious Group Inc. (formerly Enprortech Corp.), wholly owned subsidiary by ITOCHU International Inc., is a leader in maintenance, repairing, and overhauling services (“MRO”) for heavy industrial machinery and equipment throughout North America.
ITOCHU International Inc. and Industrious Group are working to become the leading North American solutions provider for heavy industrial machinery and equipment, bringing together innovative technologies and best-in-class engineering to deliver single-source solutions for the modernization, maintenance, and repair of industrial equipment, facilities, and complex manufacturing systems, through a targeted M&A effort. .
G2 Capital Advisors, LLC (“G2”) served as the exclusive buy-side advisor to Industrious Group & ITOCHU International Inc., leading a strategic M&A effort focused on identifying and engaging with potential acquisition candidates in the renewable MRO services sector. Industrious Group and ITOCHU International Inc. partnered with G2 to leverage the firms’ deep-rooted expertise across the Industrials and Manufacturing practice area, particularly within the Industrial Equipment MRO segment.
In May 2023, Industrious Group, having been rebranded from Enprotech Corp., successfully executed the transaction through the acquisition of American Hydro, a leading provider of hydropower turbine services to customers throughout North America.
American Hydro was previously owned by Wärtsilä, a global leader in technology and lifecycle solutions for the marine and energy markets. American Hydro is a supplier of hydro upgrades, specializing in the design, engineering, manufacture, installation and servicing of high-performance hydro-turbines and pumps. The business has a full-service modernization offering and capabilities for hydropower plants across North America.
Chris Pascarella, CEO of Industrious Group Corporation commented “The Industrious Group is thrilled to join forces with American Hydro and leverage each other’s expertise to build out a more diverse business unit within the renewables and heavy industrials service market. With the support of our partners, ITOCHU, we have been examining the Hydro landscape and are optimistic in our ability to penetrate this market with Industrious Group’s existing infrastructure, American Hydro’s specialization, and ITOCHU’s global position. We thank the G2 team for running an efficient and collaborative mandate in helping our team partner with the highly reputable American Hydro business.”
Victoria Arrigoni, Managing Director of Industrials and Manufacturing at G2 Capital Advisors commented “It has been an honor to be a part of expanding ITOCHU’s footprint in the hydropower and renewables market. The opportunity for ITOCHU to expand to the hydropower space is a pivotal moment for their machinery division’s go-to-market strategy and positions the group well for further expansion into the renewable energy and other industrial end markets.”
About Industrious Group
Industrious Group is a global provider of high-value-added services, products, systems, and solutions for customers in steel, automotive, beverage, and other heavy industries. The business supports, maintains, repairs, and rebuilds heavy production equipment and controls. They also supply spare parts and sub-assemblies. Industrious Group is a subsidiary of ITOCHU International’s Machinery Division.
American Hydro is a leading hydropower turbine provider in North America. The business is a supplier of hydro upgrades, specializing in the design, manufacture, installation and servicing of high-performance hydro-turbines and pumps. This business is headquartered in York, PA and was previously owned by Wärtsilä. For more information, visit www.ahydro.com.
About ITOCHU International
ITOCHU International Inc. is the North American flagship company of the Japan-based trading company, ITOCHU Corporation. ITOCHU International provides trading services for a portfolio of over twenty subsidiaries and affiliates within their 7 divisions: Textile, General Products & Realty, Energy & Chemicals, Food, Machinery, Metals & Minerals, ICT & Financial Business. For more information, visit www.itochu.com.
Wärtsilä Corporation is a publicly traded Finnish company which manufactures and services power sources and other equipment in the marine and energy markets. The business is headquartered in Helsinki, Finland. For more information, visit www.wartsila.com.
About G2 Capital Advisors
G2 Capital Advisors provides M&A, capital markets and restructuring advisory services to the middle market. We offer integrated, multi-product and sector-focused services by pairing highly experienced C-level executives with specialist investment bankers. We aspire to be the trusted advisor of choice to our clients including corporations and institutional investors. For more information, visit www.g2capitaladvisors.com.
G2 CAPITAL ADVISORS SERVED AS THE EXCLUSIVE BUY-SIDE ADVISOR TO PEAK TOOLWORKS ON ITS ACQUISITION OF EXPERT DIE INC., A LEADER IN BLADE SALES AND SHARPENING SERVICES ACROSS THE SOUTHEAST UNITED STATES.
Peak Toolworks (“Peak”) is North America’s largest manufacturer of engineered diamond and carbide cutting tools serving the secondary woodworking, metal, composite, and other end markets. With two manufacturing facilities and 12 service centers across the United States and Canada, Peak provides customers a regionally focused network of direct sales and service, offering direct access to the top cutting tool brands from one convenient source. Peak puts people first in everything they do, allowing them to be a trusted, reliable partner for their clients.
Peak has a well-established reputation as the largest network in North America for cutting tools. To advance its service offering and capabilities to better service its clients, Peak implemented a successful M&A strategy to partner with a business that expands their geographical presence and service capabilities.
G2 Capital Advisors, LLC (“G2”) served as the exclusive buy-side advisor to Peak, leading a bespoke buy-side effort focused on identifying and engaging with businesses with a strong market presence and service offering within the cutting & sharpening industry.
G2’s mandate with Peak Toolworks began in 2020 and led to the successful acquisition of Expert Die Inc. The acquisition brings industrial knife sharpening to the Peak service portfolio, offering new sharpening & repair locations as well as new sales capabilities to Peak’s existing customers. Additionally, Peak’s acquisition of Expert Die Inc. creates new relationships that will lead to new avenues for growth.
Kerry Baskins, President & CEO of Peak Toolworks, commented, “I am excited to add Expert Die to the Peak family. We are pleased with the work G2 Capital Advisors dedicated to this acquisition to help share our culture, goals, and vision with Expert Die.”
“Expert Die, Inc. has an exceptional brand name and reputation. This acquisition will significantly grow Peaks footprint while also increasing our ability to drive additional value for our customers across the country. We are excited to continue executing on the Peak strategy and look forward to the company’s further growth.”
CONTACTS ON THIS DEAL:
Victoria Arrigoni, MD, Head of Industrials & Manufacturing M: 619.742.6441 E: [email protected]
Matt Ball, Vice President M: 978.914.4421 E: [email protected]
Zachary Kalman, Associate M: 413-351-1491 E: [email protected]
G2 Capital Advisors is pleased to present its Consumer & Retail, Industrials & Manufacturing, Technology & Business Services, and Transportation & Logistics market updates. Click to download the full reports, including commentary and analysis on Q4 M&A and market trends within our core focus sectors.
Consumer & Retail Market Trends:
While retail foot traffic rose for practically all categories, it wasn’t enough to counter the effects of inflation combined with deep holiday discounting. Inflation was up 6.5% from year-ago levels – while lower than the peaks seen earlier in the year, it was enough to dampen consumer confidence heading into holiday shopping. Moreover, food prices continue to climb, driving consumers to devote more of their dollars to necessities rather than discretionary goods.
Industrials & Manufacturing Market Trends:
After two years of pandemic-fueled disruption, a host of new challenges arose in 2022 for packaging businesses as increased inflation and interest rates, the war in Ukraine, and commodity prices hitting historic highs, impacted the pace of M&A activity. Despite the challenging macroeconomic environment, the appetite among private equity groups and strategic buyers for well-established packaging companies remained high.
Technology & Business Services Market Trends:
The US economic outlook remains unclear with a general negative sentiment. Increasing interest rates, supply chain issues, and geopolitical uncertainty are putting pressure on multiples in many segments of the market. Value creation and a focus on fundamentals will be key themes in 2023 with businesses and investors intent on how they build value organically and inorganically in line with core growth theses. For many privacy equity firms, the near-term focus will likely be on add-on acquisitions that enhance existing portfolio companies.
Transportation & Logistics Market Update:
As transportation and logistics providers navigate an uncertain economic and freight environment, operators in California are faced with an additional challenge as Assembly Bill 5 California (“AB5”) takes effect following numerous legal battles. AB5, which became state law in 2019, requires companies to reclassify many independent contractors as employees, prohibiting trucking companies from working with owner-operators and 1099 drivers in California. In an environment where a driver shortage persists, eliminating a strategy that provides trucking companies scalability and flexibility could have lasting implications across the freight market.
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G2 Capital Advisors announced today that its client ITOCHU International Inc. (‘ITOCHU’ or the ‘Company) and its subsidiary Enprotech Corp has entered into a definitive agreement to acquire American Hydro, a Wärtsilä Corporation business.
American Hydro is a leading North American provider of custom hydropower refurbishment solutions and turbine services. The Company leverages world-class advanced engineering, precision machining, large fabrication, and field services capabilities to power North American hydroelectric production.
Victoria Arrigoni, Managing Director & Head of Industrials and Manufacturing at G2 Capital Advisors commented “It has been an honor to be a part of expanding ITOCHU’s footprint in the hydropower and renewables market. The opportunity for ITOCHU to expand to the hydropower space is a pivotal moment for their machinery division’s go-to-market strategy.”
The addition of American Hydro to ITOCHU’s portfolio of businesses will expand industry segmentation into the renewable energy sector and position the organization to become a leading North American maintenance, repair, remanufacture and optimization solutions provider for heavy-industrial machinery and equipment.
The transaction is subject to regulatory approvals and is expected to close in the first half of calendar 2023.
G2 Capital Advisors is pleased to present its Industrials & Manufacturing industry update for Q3 2022, providing commentary and analysis on M&A and market trends within the Industrials & Manufacturing sectors.
A historic, $1.2T of funding has been approved to invest in aging infrastructure nationwide through the Infrastructure Investment and Jobs Act (“IIJA”), coupled with additional investment of $52B through the CHIPS Act and $700B through the Inflation Reduction Act. Construction services firms have been buoyed by the news of the injections, promising years of bumper backlogs and a reliable end customer in the U.S. government. Unfortunately, new investment can’t conjure up a much-needed base of skilled laborers, as the war for talent rages on. Only 80% of the 1MM construction workers who lost their jobs at the beginning of the pandemic have returned, in the face of an estimated 1MM additional workers required in the near term to keep up with high demand. Firms have been forced into bidding wars and are providing more clearly defined career trajectories to attract new workers. As the U.S. hovers over a recessionary state, pressure on wage growth should ease more broadly, but will likely remain an acute issue for the construction services industry as demand is supported by government policy. With spending under the infrastructure law expected to peak in 2027-28, the labor strain is set to become a longer term, structural issue.
The $700B Inflation Reduction Act includes a rejuvenated solar power incentive, increasing the existing tax rebate from 26% to 30% for a period of ten years through 2032. Originally scheduled to phase out between 2020 and 2023, the reboot will be partially financed by a 15% alternative minimum tax on some large U.S. corporations and a 1% excise tax on certain corporate share repurchases. The Biden administration aims to further increase investment and development of renewable energy alternatives, providing a significant boon to developers and investors. This backdrop of robust demand has allowed firms to pass inflationary pressures on to end customers, offsetting the impact on their businesses.
While demand for the construction services and renewable energies sectors will remain robust, supported by extraordinary government funding, industry players will need to combat persistent labor shortages likely to endure through a forecasted recession.
G2 Capital Advisors, LLC (“G2”), a leading full-service investment bank and restructuring advisory firm, announced today that Jim Cotter has been hired as a Managing Director on the Industrials & Manufacturing M&A Team, reinforcing the firm’s coverage in industrial technology.
“With more than 25 years of experience in industrials investment banking, Jim’s hiring underscores G2’s commitment to investing in top talent as we continue to grow our platform,” said Matt Konkle, President of G2 Capital Advisors. “In addition to his deep expertise in Industrials, Jim has also worked to source and execute transactions within the Media, Entertainment, Telecommunications, Transportation, and Gaming industries.”
Cotter joins G2 having most recently served as a Managing Director at SunTrust Robinson Humphry for over a decade, where he was the Co-Head of their Industrials M&A group. During his tenure, Jim advised scores of clients across multiple sectors leading efforts to execute strategic transactions for various public and private companies. Before SunTrust, Jim held senior advisory roles at JPMorgan, Jeffries, and CIT Capital. Jim’s advisory experience covers healthy growth company engagements and special situations.
“As we continue to invest and grow our presence in the industrials sector, we’re delighted to welcome Jim, who brings extensive experience across the Industrials and Communications sub-sectors and a proven track record in mergers and acquisitions, strategic corporate development, and special situations,” said Victoria Arrigoni, Head of Industrials & Manufacturing M&A, “With this hire the G2 Industrials & Manufacturing team continues to expand our transaction capabilities and further build on our mission to help clients achieve their strategic and financial goals.”
“G2’s platform is ideally positioned at the forefront of investment banking and restructuring advisory services to the industrials & manufacturing industry. I am thrilled to join the practice and look forward to partnering with the exceptional team assembled under Victoria Arrigoni’s leadership,” said Jim Cotter, Managing Director.
G2 Capital Advisors’ Industrials & Manufacturing team has significant M&A and capital markets experience, which brings deep and relevant knowledge and insight to clients. The firm offers comprehensive and complimentary advisory capabilities through industry experts and M&A bankers that bring expertise across subsectors, geographies, and deal structures.
To learn more about G2’s Industrials & Manufacturing investment banking practice, visit:https://g2capitaladvisors.com/industry-expertise/industrials-manufacturing/
VP – Head of Marketing
Andler Packaging Group (“Andler Packaging” or the “Company”) is a value-added distributor of plastic, glass, and metal packaging products. Founded in 1893 by Israel Andler in Cambridge, Massachusetts, the Company was originally a recycler of glass bottles for the local community. With multiple locations across Massachusetts, New Jersey, Maryland, and Florida and 130 years of operational experience, Andler Packaging is one of the largest packaging suppliers in the United States. The Company serves a variety of markets, with expertise in the rapidly growing pharmaceutical and nutraceutical industries. Andler also offers value-added services, including proprietary custom tools, printing and labeling capabilities, and repacking and sterilization services.
As a leading value-added provider of packaging solutions and a 4th generation family-owned business, Andler was approached regularly with strategic discussions regarding exit opportunities. After much consideration, the Company decided to engage an advisor to support the exploration of its options, including a possible sale process with a select list of strategic parties. “Supporting the Andler Family in evaluating and refining their family and personal goals was a highly collaborative process. Together we were able to identify the best path forward and deliver maximum value with an optimal long-term partner,” said Pat Reinhardt, Managing Director at G2 Capital Advisors.
G2 Capital Advisors, LLC (“G2”) served as the exclusive sell-side advisor to Andler Packaging Group in its sale to Berlin Packaging. Through a fast-paced and collaborative process, G2 focused on identifying the right partner and deal structure to ensure the family and employee legacy would be maintained and realize maximum value for the brand and enterprise.
“Working with G2 was a great experience for all our stakeholders. They were knowledgeable and responsive and helped us not just maximize value but find a partner we could feel truly good about taking on our family’s business and legacy. We enjoyed working with G2 and are excited to watch this next chapter of our business unfold,” the Andler family said of the process.
G2 successfully led the Andler Packaging organization through an accelerated strategic process that achieved our clients’ primary goals and ultimately led to its acquisition by Berlin Packaging, a leading global supplier of packaging services and solutions.
“It has been an honor to be part of preserving the generational legacy of Andler Packaging. G2’s expertise in working with family-led businesses in the middle market, such as Andler Packaging, allowed for a great outcome across all family stakeholders by deploying our deep operational and transactional industry expertise. There were several elements of unique complexity based on the 130-year company history and complex, multi-generational, and multi-family ownership,” said Victoria Arrigoni, Managing Director & Head of Industrials & Manufacturing M&A at G2.
“We have a longstanding relationship with Berlin Packaging, not only as a competitor but also as a customer and supplier,” said Sam Andler, Managing Director of Andler Packaging Group. “Berlin Packaging’s values and dedication to customer thrill make this an excellent partnership. I look forward to continued growth for our Company and our employees.”
G2 Capital Advisors provides M&A, capital markets, and restructuring advisory services to the middle market. G2 offers integrated, multi-product, and sector-focused services by pairing highly experienced C-level executives with specialist investment bankers. G2 aspires to be our clients’ trusted advisor of choice, including corporations and institutional investors.
Cyberattacks: A potent reminder of technological vulnerabilities in the age of automation.
High profile cyberattacks are a potent reminder of growing technological vulnerabilities as manufacturers implement higher levels of automation. Adoption of “Industry 4.0” technology infrastructure is increasing the attack surface to include legacy systems not designed to defend against today’s sophisticated cyber criminal or rogue nation. Ransomware can trigger financial losses, but disruption to production and supply chains can cause harm beyond the initial shake-down. Breaches such as the Colonial Pipeline and SolarWinds attacks grab headlines and underscore the need to defend operations and silo production networks from companies’ external facing business networks. In response, manufacturers should audit not only their existing cyber defenses, but also the resiliency of their operations in the event of a cyber attack.
Cybersecurity plays a vital role in M&A strategy and execution. Firms considering a transaction should understand risks present in the form of data leaks, ransomware, and opportunities for malicious actors to use a transaction as a way to break into an acquiring company. According to IBM, more than half of companies wait until due diligence is completed to perform cybersecurity assessments. Considerations surrounding data privacy regulations, mandatory disclosure laws, and the risk of business interruption should be a priority for sellers and acquirors from the early stages of the transaction process.
Cibes Lift Group is one of the world’s most innovative manufacturers of space-saving lifts designed for fast and easy installation, also offering a wide range of conventional lift solutions. Thanks to the wide range of lift products and a flexible design concept, the lift solutions of Cibes Lift Group adapt to the requirements of public, commercial, and private settings. Sales, installation, and maintenance services are provided by a global network of subsidiaries and partners. The company group is headquartered in Gävle, Sweden, and has production facilities in Sweden and China. In 2021 the Group had approximately 1200 employees and a revenue of 1.9 billion SEK.
In Europe and Asia, Cibes established its reputation as a premium vertical platform lift manufacturer serving primarily residential customers and experienced substantial growth. To compound on its global reach, the company entered the United States market in 2020 by establishing a state-of-the-art showroom in the Miami metropolitan area. Cibes looked to apply its successful M&A track record in Europe to bolster its growth in the United States by acquiring new customers, capabilities, and geographic markets.
G2 Capital Advisors, LLC (“G2”) served as the exclusive buy-side advisor to Cibes, leading a bespoke buy-side effort focused on identifying and engaging with American companies that have a strong market presence and operations within residential elevator markets.
G2’s mandate with Cibes began in 2021 and led to a successful acquisition of American Elevator of Atlanta (“AEA”), followed this month by the acquisition of Bella Elevator LLC, manufacturer of Symmetry Elevating Solutions (“Bella” or “Symmetry”). The acquisition secures a manufacturing center for Cibes in the United States and further establishes its U.S. presence after its 2021 acquisition of AEA. Symmetry adds local manufacturing capabilities, an enhanced home elevator and accessibility product portfolio, and an increased reach in the U.S. and Canada through a robust 80-location distributor network. Bella will remain in operation and work in tandem with Cibes to promote the Cibes and Symmetry brands across the U.S.
Per Lidström, CEO of Cibes Lift Group, commented “I am excited to add Bella and Symmetry to our U.S. arm and Cibes family. We entered the United States with a high level of excitement for adding domestic manufacturing capabilities and are grateful for the work G2 did to promote our relationship with Bella. We are pleased with the work G2 dedicated to this acquisition to help share our culture, goals, and vision with Bella. We look forward to having Bella on board as a key contributor to that vision.”
“The G2 team is thrilled to help welcome Bella and Symmetry to the Cibes team. Symmetry has an exceptional brand name and reputation in the U.S., adding to Cibes international acclaim in the residential elevator space. Its manufacturing capabilities will be instrumental to bringing the full Cibes product suite to the U.S. and will add a significant product expansion to its world-class offerings. We are excited to continue supporting Cibes’ U.S. strategy and look forward to seeing the company’s continued growth.” said Peter Reed, Director at G2.
About G2 Capital Advisors
G2 Capital Advisors provides M&A, capital markets and restructuring advisory services to the middle market. We offer integrated, multi-product and sector-focused services by pairing highly experienced C-level executives with specialist investment bankers. We aspire to be the trusted advisor of choice to our clients including corporations and institutional investors.
CONTACTS ON THIS DEAL:
Peter Reed, Director, Head of Buy-Side: T: 617.918.7972 E: [email protected]
Aaron Levy, Associate: T: 857.250.2767 E: [email protected]
Ben Stevenson, Associate: T: 857.317.2785 E: [email protected]
Jeremy Caulkins, Analyst: T: 857.317.2790: E: [email protected]