Harvest Partners LP and Audax Private Equity have completed the combination of AP Emissions Technologies (AP) and Centric Parts, respectively, to form an automotive aftermarket parts company called APC Automotive Technologies.
APC serves as an undercar parts manufacturing company with a portfolio of aftermarket products. The newly established company brings together the resources of both companies, providing: friction and brakes, exhausts, mufflers, spark arrestors, flex tubes and pipes. As part of the deal, Harvest provided a new equity investment into the combined business and Audax retained a significant ownership stake in APC. Financial terms of the transaction were not disclosed.
“We expect our platform to continue to grow through leveraging the combined strengths of both businesses and through future acquisitions in the undercar aftermarket to provide a comprehensive offering to our customers,” states Hugh Charvat, who will lead the combined business as CEO.
New York-based Harvest Partners focuses on management buyouts and recapitalizations of middle-market companies in North America, including services companies in the healthcare, business, consumer, industrial and energy sectors, and manufacturing and distribution companies.
Audax, a Boston private equity firm, backs lower middle-market companies with up to $35 million in Ebitda. Audax has been rather busy recently. The PE firm raised a $1.6 billion senior loan fund to target business services and consumer product deals in October 2016. The PE firm also purchased RelaDyne, a fuel and lubricant distributor from AEA Investors LP. Audax won Mergers & Acquisitions’ 2015 Mid-Market Award for Private Equity Firm of the Year.
The manufacturing industry is ripe for M&A and is continuing to rise. Recent deals involving parts suppliers to the automobile and aerospace industry include: Crestview Partners-backed Accuride Corp.’s (NYSE: ACW) purchase of KIC LLC; Audax’s recent acquisition of Fastener Distribution Holdings LLC, a distributor of hardware materials for the aviation industry; Sonaca Group’s deal to buy LMI Aerospace Inc. (Nasdaq: LMIA) for nearly $190 million in cash; Monroe Truck Equipment Inc.’s purchase of equipment maker Towmaster Inc.; W.W. Williams Co. LLC’s buying of parts provider Auto Safety House LLC; and Watermill Group’s purchase of metal parts maker Experi-Metal Inc.
Jefferies LLC advised AP Emissions Technologies, while Lazard Middle Market LLC and Angle Advisors advised Centric Parts. Kirkland & Ellis LLP served as legal counsel to AP Emissions Technologies and Centric Parts. White & Case LLP served as legal counsel to Harvest Partners. Jefferies, Goldman Sachs (NYSE: GS) and Crescent Capital Group provided financing on the deal.