Creation and Exit of Successful Downstream Oil & Gas Business Adds to Sun’s Track Record of Corporate Carve-Out Success
BOCA RATON, FL – October 13, 2016 – Sun Capital Partners, Inc. (“Sun Capital”), a leading private investment firm specializing in leveraged buyouts and investments in market-leading companies, today announced that an affiliate has completed the sale of Critical Flow Solutions (“Critical Flow” or “the Company”), a leading provider of products and services to the petroleum refining industry, to CIRCOR International, Inc. The deal has an enterprise value of $210 million.
Critical Flow, based in Sandy, Utah, was formed in May 2015 when the Sun Capital affiliate acquired three business units of Curtiss-Wright Corporation. The first, DeltaValve LLC, offers solutions for the delayed coking process of refineries. The second business, TapcoEnpro International, provides solutions for the fluid catalytic cracking process of refineries. Earlier this year, the Company divested the third unit, GROQUIP, a regional pressure valve distribution business, yielding substantial proceeds from the sale.
“Critical Flow is a great example of Sun Capital’s expertise in transforming corporate carve-outs into successful stand-alone businesses.” said Marc Leder, Co-CEO of Sun Capital. “While the three business units we acquired were non-core to the prior owner, we saw very attractive characteristics including differentiated and defensible market positions, name-brand recognition, and highly-engineered, custom products that are critical to their customers’ operations. We were able to work effectively with management to transform that potential and quickly create a real industry leader.”
Sun Capital and the Critical Flow leadership team partnered to foster significant improvement in financial performance, more than doubling EBITDA from pre-acquisition levels, and achieving margins of more than 20 percent.
“We worked closely with management on several initiatives to add value and strengthen the business,” said Aaron Wolfe, Managing Director at Sun Capital. “Three highlights were the commercialization of DeltaValve’s revolutionary center-feed injection technology, forming strategic relationship with key processes licensors who provide the intellectual property and key technology necessary to operate refineries, and focusing the sales organization on the aftermarket business for its large installed base of products. In addition, the Company lowered component costs during this period. All of these contributed to Critical Flow’s success.”
Sun Capital has strong experience investing in industrial businesses, including S&N Communications, a regional provider of construction and maintenance services to telecom, cable, natural gas and utility companies; Robertshaw, a leading design, engineering and manufacturing company that sells the world’s most extensive range of critical components and control systems used to regulate all major functions of white good appliances such as cooking, refrigeration, laundry and dishwashing machines, and Flexitech, a leading global designer and supplier of high quality brake hose products for the automotive industry.
BlackArch Partners and Simmons & Company International, Energy Specialists of Piper Jaffray, served as financial advisor to Sun Capital on the transaction.