Industrials & Manufacturing

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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.

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CLIENT

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.

SITUATION

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.

ENGAGEMENT

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.

OUTCOME

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]

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CLIENT:

Biotron Laboratories, LLC (“Biotron”) and Talus Minerals Company (“Talus”), collectively (“the Company”), is a leading producer of premium, food-like speciality minerals and customized mineral solutions serving the nutrition supplement industry. The Company serves a diverse mix of customers that span the globe and provides exceptional service and high-quality products to the greater nutritional and dietary ingredients markets. Headquartered in Ogden, UT, the Company operates with a deeply ingrained, service-first culture. 

SITUATION:

Biotron and Talus, longstanding leading producers of specialty mineral chelates and complexes serving customers globally, organically built a highly scalable platform with premium products and a customer-driven approach. As part of the Companys’ long-term growth strategy, management sought a strategic partner to support its continued growth and expansion. 

ENGAGEMENT:

G2 Capital Advisors, LLC (“G2”) was engaged by Biotron and Talus as its exclusive sell-side advisor. G2 led a highly targeted, strategic, and efficient sell-side transaction process focused on identifying the right partner for the Company to further accelerate the growth of the platform. 

OUTCOME:

In March 2022, the transaction was successfully executed through a sale to Aceto, the provider of choice for differentiated specialty ingredients in the life sciences and advanced technology end markets. Aceto is a portfolio company of New Mountain Capital.

“Through this process with G2 we’ve learned more about the inner workings of our own business than we imagined was left to learn. We leaned on their team for insight and advice and were introduced to a broad array of qualified parties. With the support of G2’s team of seasoned experts we achieved an outcome that exceeded our expectations. Via G2 we have found in Aceto the right fit for ensuring continued success and a growth platform for our business, our customers, and our team,” said Gameil Fouad, PhD, President, Biotron Laboratories, LLC. 

“The partnership between the Company and Aceto will continue to fuel the growth of its platform and allow for the expansion of their commercial reach on an accelerated timeline. We are thrilled to have led our client through a successful transaction and are excited to watch these two groups continue to flourish in this new partnership,” said Victoria Arrigoni, Managing Director and Head of Industrials & Manufacturing at G2 Capital Advisors. 

ABOUT G2:

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 experience 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.g2cap.com 

ABOUT BIOTRON LABORATORIES AND TALUS MINERAL COMPANY:

Biotron Laboratories and Talus Mineral Company, founded in 1979 and 2014, respectively, are affiliated entities that in partnership manufacture and supply leading speciality minerals and nutritional ingredients to global markets. Biotron provides clients excellent customer service, agile processing capabilities, and proprietary production methods to deliver the highest quality ingredients with speed and certainty. The Company provides over 250 products including mineral complexes, custom blends, fortified blends, and chelates, which include magnesium-based, zinc-based, calcium-based and iron-based products. Products include halal, kosher, vegan and organic certified options. The Company’s manufacturing operations are located in Centerville, Utah and Ogden, Utah. For more information visit www.biotronlabs.com and www.talusminerals.com 

ABOUT ACETO:

Aceto is the provider of choice for differentiated specialty ingredients in the life sciences and advanced technology end markets. With business operations in 10 countries, Aceto manufactures and supplies more than 3,000 chemical compounds used principally by the pharmaceutical, nutraceutical, agricultural, and specialty chemical industries. In the last two years, Aceto has made seven acquisitions including Biotron, which has expanded its manufacturing, R&D, and portfolio offerings, transforming the company into a worldwide supplier of critical ingredients with a robust manufacturing footprint. Aceto’s global operations, including a significant presence not eh ground in China, India, Europe and North America, enable the companys’ deep worldwide sourcing and regulatory capabilities. Aceto is well positioned to innovate new solutions, ensure quality and customize products to meet customers’ specific needs. Its expanded capabilities and decades of global sourcing expertise are especially valuable now that supply chain management is a critical strategic issue for companies worldwide. For more information visit, www.aceto.com 

CONTACTS ON THIS DEAL:

Victoria Arrigoni: MD, Head of Industrials & Manufacturing, T: 781.604.9005 E: [email protected]

Mike Williams: Director, Industrials & Manufacturing, T: 917.523.2164 E: [email protected]

Noah Johnson: Sr. Analyst, T: 717.598.8558 E: [email protected]

Ted Malpiede: Sr. Analyst, T: 781.752.6001 E: [email protected]

Matt Ball: Sr. Associate, T: 978.914.4421 E: [email protected]

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Carbon Capture: The Future or a False Start?

Environmental, Social, and Governance (“ESG”) investing has established itself as a serious investing niche, with global sustainability fund assets almost doubling over the past six months through September to $3.9T. Encouraged by regulators worldwide eager to show their commitment to tackling wide-ranging equality and environmental issues, investors and companies alike are investing and marketing themselves as responsible and sustainable corporate citizens. Enter carbon capture, while high hopes for CCUS (Carbon Capture, Utilization, and Storage) technologies over the past decade have been a litany of false-starts and delays, this time may be different.

In this newsletter, we will demonstrate the impact of renewed investment and focus on CCUS applications for key Industrials and Manufacturing sectors and how the related M&A market has performed in the Q4 2021.

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G2 Capital Advisors is pleased to present its Industrials & Manufacturing industry update for Q3 2021, providing commentary and analysis on M&A and market trends within the Industrials & Manufacturing sectors.  We hope this report finds you and your families safe and healthy, we encourage you to contact us directly if you would like to discuss our perspective on the current market environment, trends, or our relevant industry experience.

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CLIENT
Founded in 1971, The Granite Group Wholesalers, LLC (“The Granite Group” or “the Company”), serves New England residential and commercial contractors, providing exceptional service and products to plumbing, heating, cooling, water, and propane markets. Headquartered in Concord, NH, the Company’s best-in-class e-commerce and 45+ branch network is operated by expertly trained staff that offer an industry-leading customer experience. The Company serves a diverse mix of contractors and fuel dealers with a deeply ingrained, people-first culture, positioning the Company as one of the top building product distributors in the Northeast.

SITUATION
The Granite Group has long been one of the leading family-owned businesses in the Northeast. In the past few years, the Company has embarked on a strategic, thoughtful expansion across New England and within its e-commerce platform, increasing density in key markets and expanding its presence through organic branch openings and acquisitions. A meticulous approach to product line expansion has ensured strategic alignment with the Company’s customers and differentiated product knowledge. With its sustained growth, the family identified further opportunities to fast-track their vision with the right strategic growth partner.

ENGAGEMENT
G2 has served as a long-term strategic advisor to The Granite Group and as the exclusive financial advisor for this process, was responsible for leading a highly tailored and efficient transaction process for the family and Company.

OUTCOME
The transaction was successfully executed through a growth investment by BBH Capital Partners (“BBHCP”) in the equity interests of The Granite Group. The family is retaining ownership, and Bill Condron, President and CEO of The Granite Group, will continue to lead the Company, using additional resources and expertise from BBHCP to execute on a shared vision of growth.

“G2 has been our trusted advisor and partner for many years, supporting the execution of family’s and the Company’s long-term vision. Throughout this process and the duration of our relationship, G2 has been a key strategic advisor, aligning with our people-first culture, and helping us define and execute the best possible outcome. G2’s deep knowledge of our business and industry, and vision for the potential of our platform was critical to the success of this process, along with their unique ability to guide the family through a major life event,” said Bill Condron, CEO of The Granite Group.

“The exciting partnership between The Granite Group and BBHCP will supercharge the robust growth of their platform and allow them to execute their strategic vision on an accelerated timeline. We are thrilled to have had the opportunity to lead our client through to a successful outcome,” said Jeffrey Unger, CEO of G2. “Our relationship with The Granite Group is a terrific example of our strategy of acting as an industry focused trusted advisor to innovative, high growth companies.” 

The transaction will support the Company’s growth initiatives of expanding organic footprint and executing strategic acquisitions. 

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. (www.g2cap.com

CONTACTS ON THIS DEAL:

Jeffrey Unger, Chairman & CEO: T: 617.918.7929 E[email protected]


Victoria Arrigoni, Managing Director, Industrials & Manufacturing: T: 619.742.6441 E[email protected]

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G2 Capital Advisors announced today that Matt Konkle has been appointed President of the firm. Formerly Senior Managing Director and Head of Industry Teams at G2, Matt is an accomplished C-Level executive and operator with 25 years of experience in the Technology and E-commerce services industry. Matt possesses a deep background leading complex advisory transactions in the middle market. In his role as President, Matt will lead the day-to-day aspects of G2 as well as provide oversight to the firm’s business sectors in developing and executing against its short and long-term strategies.

“With the explosive and sustained growth of the firm, it is the right moment for us to continue to invest in our organizational leadership. Matt has the vision, leadership, and expertise to support the changing and growing needs of our organization as G2 continues to scale and drive towards our long-term strategic objectives,” says Founder & Chief Executive Officer Jeffrey Unger.  “Matt’s unique understanding of our clients from entrepreneurs to institutional investors and their respective requirements makes him the ideal leader to complement our management team. We are making this organizational change to support the next stage of our growth, amidst significant firm-wide momentum as we charge through the second half of this year. Matt will be working very closely with our entire leadership team to leverage its collective experience, market and industry knowledge and operational expertise to position G2 to achieve, if not exceed, the objectives set for growth.”

“I am honored and excited to take on the role as President of the G2 team. It’s a privilege to be a part of a tremendously strong company poised for continued growth. We have an extremely talented, diverse and accomplished team who are deeply committed to achieving success for our clients. Now is the time to focus on how G2 can evolve holistically to support overall firm growth.” says Konkle. “This is a pivotal moment for G2 to build on the impressive momentum we have accomplished, the collaborative relationships we have with our clients, and the organizational culture and go-to-market strategy established by our CEO and founder, Jeffrey Unger. I have worked beside Jeffrey for the last six years and personally understand the significance of his contributions. His dedicated leadership and passion provide an example for us all, and I look forward to partnering together as we leverage the knowledge and expertise across the organization to unlock G2’s growth potential.”

Before joining G2, Matt was President of Fifth Gear, a tech-enabled services company and provider of end-to-end e-commerce solutions, including order management, fulfillment, customer care, and freight management. Matt led Fifth Gear from inception, including developing the company’s product and service offerings and go-to-market strategy. Matt partnered with G2 on buy-side, financial advisory, and sell-side mandates as part of Fifth Gear’s growth strategy. In 2014, Matt and G2 completed a strategic sale of the business to Speed Commerce (NASDAQ: SPDC). As the Chief Operating Officer of Speed Commerce, Matt was responsible for a team of over 1,500 employees serving over 30 retail and consumer brands. In his previous role at G2 as Head of Industry Teams, Matt was focused on maximizing the value of firm’s industry-specific, operations-centric approach in the middle market. Through that work, Matt has developed a deep understanding of the support required for a high-growth organization like G2. He has had a direct impact on the firm’s agile approach to accommodating the evolving needs of its clients. 

Matt holds a Bachelor of Science in Business Administration from the Indiana University Kelley School of Business and a Master’s in Business Administration from the University of Chicago Booth School of Business.

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CLIENT:
Systems Control (the “Company”) is a best-in-class designer and manufacturer of customized, highly engineered control panels and electrical substation equipment enclosures for the transmission and distribution industry across North America. The Company is recognized by electric utility providers for supplying high-quality, critical components to ensure reliable operations of the electrical grid. Systems Control is headquartered in Iron Mountain, Michigan and employs over 750 people.

SITUATION:
Systems Control established aggressive growth objectives and an acquisition strategy to identify manufacturing expertise in the market that would enhance and expand utility customer relationships, broaden its geographic presence, and maintain an aligned business philosophy. With fresh capital through its financial partnership with Comvest Partners (“Comvest”) in 2018, Systems was well positioned to accelerate its growth through a disciplined acquisition strategy and explore expansion opportunities.

ENGAGEMENT:
G2 Capital Advisors, LLC (“G2”) was engaged by Systems Control as the exclusive buy-side advisor to identify, source and engage with acquisition targets that fit with the Company’s end-market profile.

OUTCOME:
The definitive agreement was announced on June 21st, 2021. The acquisition provides additional capabilities and geographic scale to Systems Control’s operations.

The team at Keystone is a strong cultural fit with the Systems Control family. Both companies have similar values and approaches to providing engineering and manufacturing services. Furthermore, the additional investment in Keystone will accelerate growth, while unlocking core capabilities in a high growth market.

“We are really excited about the opportunity to partner with the Keystone team” said Brad Lebouef, CEO of Systems Control. “Keystone has a reputation for high quality products, is a great cultural fit all around, and will immediately expand our production capabilities.”
“It was a pleasure working with Systems Control and the Comvest team to help identify opportunities, build relationships, and ultimately execute a highly strategic transaction with Keystone. We look forward to watching the ongoing success of Systems as they continue to expand the platform within the electrical enclosures and systems industries,” said Michael Williams, Director at G2 Capital Advisors.

About Systems Control
Systems Control specializes in engineering and manufacturing of equipment enclosures and control and relay panels used in electrical transmission and distribution substations across North America.

About Comvest Partners
Comvest Partners is a private investment firm providing equity and debt to middle-market companies across the U.S. Since its founding in 2000, Comvest has invested over $6.1 billion. Today, Comvest Partners has approximately $5.0 billion of assets under management. Through extensive capital resources and broad network of industry relationships, Comvest Partners offers companies financial sponsorship, critical strategic and operational support, and business development assistance.

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:
Michael Williams: Director, Industrials & Manufacturing: T: 917.523.2164 E: [email protected]
Andrew Keleher: Vice President: T: 617.918.7982 E: [email protected]
Matt Ball: Associate: T: 617.918.7933 E: [email protected]
Aaron Levy: Senior Analyst: T: 857.250.2767 E: [email protected]

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CLIENT

Founded in 1986, Action Target, Inc. (“Action Target” or the “Company”), a portfolio company of Dubin Clark & Company, Inc. (“Dubin Clark”), is the leading provider of equipment and services for live-fire training facilities. With the most technologically advanced and customized live-fire solutions, Action Target is the provider of choice for law enforcement, military, international, and commercial customers.

SITUATION

Action Target successfully implemented a growth strategy started in 2019 to expand and professionalize service offerings for live-fire training facilities. With the reorganization of the business into two distinct and focused business units, Range Projects and After-Market Services, Action Target was seeking to refinance its existing debt to lower the cost of capital and expand capacity to fund growth initiatives.

ENGAGEMENT

G2 Capital Advisors, LLC (“G2”) served as the exclusive financial advisor to the Company. G2’s Capital Markets team leveraged deep capital markets expertise and precise positioning of the Company’s growth strategy to generate a competitive process that ultimately yielded a flexible capital solution capable of supporting Action Target’s strategy going forward.

OUTCOME

The new senior secured credit facility consists of an Asset Based Revolver and Term Loan Facility (i.e., unitranche) provided by Emigrant Bank.

Mike Birch, Chief Executive Officer, commented, “Despite a turbulent year stemming from the COVID-19 pandemic, we continued to successfully expand our After-Market Services unit while also continuing to drive strong performance in our core Range Products business across all channels. We hired G2 to find a new financial partner who could support our growth objectives for the future. G2 took the time to understand all facets of our business. They helped us articulate a compelling and detailed investment opportunity for potential lenders, which we believe was an important part of the success of this transaction.

Tom Caracciolo, Managing Partner at Dubin Clark, added, “We also were impressed with G2’s ability to access a broad range of lenders, which allowed us to simultaneously evaluate multiple structures for the Company. G2 seamlessly coordinated an efficient competitive process and found the right partner for the Company in Emigrant Bank.”

“We are proud to have partnered with Action Target to execute a refinancing that will provide the fuel for the next stage of their growth. Management put in a significant amount of dedication and focus to execute a strategic shift during a pandemic. It is great to see this hard work pay off as the Company now has the capital structure in place to support initiatives to drive higher growth and profitability,” said Howard Lanser, Managing Director and Head of Capital Markets at G2.

About Action Target

Action Target is a business that has transformed the concept of shooting range installations. Founded in 1986, the company started by creating a pneumatic turning target system for the Provo Police Department training curriculum. From there, the Company continued to design, develop, and implement new products and services for the $600 million live-fire training facility market serving the U.S. commercial, U.S. military, U.S. law enforcement, and international segments. The Company has redefined the customer experience in live-fire training facilities by introducing groundbreaking technology-driven solutions that generate a modern feel and maximize engagement. For additional information, visit https://actiontarget.com/.

About Dubin Clark

Established in 1984, Dubin Clark is a private equity firm that focuses on strategic and operational value creation. Dubin Clark seeks to acquire interest in branded consumer and industrial niche manufacturers and specialty services businesses with unique business models and a strong growth trajectory. The Firm is based in Boston, Massachusetts, with an additional office in Jacksonville Beach, Florida. For additional information, visit https://dubinclark.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.

CONTACTS ON THIS DEAL:

Howard Lanser, Managing Director, Head of Capital Markets
C: 312.961.7227 E: [email protected]

Cullen Moore, Senior Analyst, Capital Markets
C: 774.571.7926 E: [email protected]

Ben Wright, Chief Operating Officer
C: 619.972.3586 E: [email protected]

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G2 Capital Advisors is pleased to present its Industrials & Manufacturing industry updates for Q1 2021, providing commentary and analysis on M&A and market trends within the sectors. We hope these reports find you and your families safe and healthy, and encourage you to contact us directly if you would like to discuss our perspective on the current market environment, trends, or our relevant industry experience.