3i Group plc, in connection with the target's management team, is buying private equity-backed A&A Manufacturing.

A&A, headquartered in New Berlin, Wisconsin, manufactures engineered protective and safety equipment for industrial groups. The company has manufacturing operations in North America and Germany. The deal is valued at $202.5 million, and 3i is investing about $110 million, plus debt, according to 3i managing partner Ken Hanau.

"The business is providing hard and soft covers, things that are protecting equipment, so it is tied into the capital cycle. Coming out of the last recession a lot of businesses were conservative on spending on capital equipment, so they pushed out the replacement cycle," Hanau says. But now that the economy is in better condition, companies will resume that spending, according to Hanau.

Before 3i's investment, A&A acquired two German companies – Halltech and MFB Technik. The company plans to make more add-on acquisitions in Europe, North America and Asia, according to Hanau. The transaction fits with 3i's strategy to take businesses and expand them internationally, according to Hanau.

A&A was sold by Boston private equity firm Audax Group, which picked up a majority stake in the manufacturer in 2007.

3i has a history of investing in manufacturing companies, such as MoldMasters, Hilite International, Hyva and Norma. In May, the firm sold car parts group Hilite to Avic Electromechanical Systems Co. Ltd. The London-based private equity firm recently sold its stake in architecture firm Foster + Partners back to the firm. In July, 3i sold its stake in jewelry company John Hardy to Catterton Partners. 

Robert W. Baird, Kirkland & Ellis and PwC advised 3i on the deal. GE lead the banking syndicate, which also consisted of Societe Generale and Bank of Ireland. Houlihan Lokey and Ropes & Gray advised A&A on the transaction. 

Financial services industry