When it comes to corporate divestitures, Rockwood’s team is uniquely equipped to execute these more complex deals. We have experience on both sides of divestiture transactions: as buyers and sellers. Rockwood has proven to be the right partner for many lower middle market companies looking to make an opportunistic divestiture or carve-out non-core assets that are no longer a strategic fit or are not meeting the overall objectives of the parent company.
We strive to provide sellers with comfort around speed and certainty of close and ensure a smooth transition of the business and employees. To those ends, we aim to avoid cumbersome transition service agreements and drawn-out due diligence processes. In addition, we understand the internal limitations that may exist around providing data and financial statements for the divested entity, as well as the practical issues around taxes, intellectual property, customer contracts and relationships, employees and others.
Rockwood’s partners also have been on senior leadership teams following divestitures of:
- A non-core diesel engine component segment of a defense manufacturing business;
- A non-core plating business that was part of a public company and was ultimately sold to a European strategic acquirer; and
- An energy business that was opportunistically carved out from its sister aerospace businesses prior to a sale to a large, public U.S. strategic acquirer. The energy business was ultimately set up as a standalone entity and was subsequently sold to a European strategic acquirer.
Since 1999, Rockwood has invested in five corporate divestitures from both private and public parent companies:
Carve-out from RAD Electronics in a distressed situation. Astrex is a value-added distributor of electronic connectors and accessories primarily serving the military and aerospace end markets. Rockwood acquired the business in 2008 and sold it to TTI, Inc. in 2014.
Carve-out of a larger valve division of SPX Corporation (NYSE: SPX), which had acquired DeZurik as part of its purchase of General Signal. DeZurik is a manufacturer of valves and related equipment for water and wastewater markets. Rockwood acquired the business in 2004 and sold it to Granite Equity Partners in 2015.
Carve-out of an operating division of FuelCell Energy (NASDAQ: FCEL). FuelCell Energy did not feel its thermoelectric generator and heater business fit with its strategic direction. Rockwood acquired the business in 2004 and sold it to Gentherm Incorporated (NASDAQ: THRM) in 2014.
Rockwood recapitalized Amistco in July 2011 in partnership with the company’s founder. Later that year, Rockwood merged Amistco with a carve-out of the separations and mass transfer business of ACS Industries., Inc. The merged entity, AMACS, provides solutions for a wide range of separation applications, including mist eliminators, mass transfer products and wedge wire screen products and is part of Rockwood’s current portfolio.
In September 2014, Rockwood partnered with senior management to carve out Altimate Medical, Inc. from Invacare Corporation (NYSE: IVC). Altimate is a market-leading manufacturer of standing solutions to support therapy for adults and children with disabilities.
To discuss an corporate carve-out acquisition opportunity, please contact:
Kate Faust
kfaust@rockwoodequity.com
(216) 278-7070