American Cap Takes Two for Portfolio –

Sunvest Industries LLC, a platform holding company established to acquire contract manufacturers and a portfolio company of publicly traded American Capital Strategies, last month acquired Dyna-Fab Inc. and Advanced Fabrication Technologies Inc. Terms of the transaction were not disclosed.

Jeri Harman, a principal at American Capital, said the management of Sunvest Industries is taking advantage of some very strong outsourcing trends in the original equipment (OEM) sector. “I like the fact that we have a strong management team that has executed a similar strategy in their prior endeavors and the fact that they have terrific operating experience and a strategy that should create value through acquisitions as well as internal growth. The two companies that we’ve initially acquired with them have strong high margins and are quality providers in their respective markets,” she said.

Rockland, Mass.-based Dyna-Fab primarily serves the semiconductor and specialty original equipment manufacturers markets. Hayward, Calif.-based Advanced Fabrication Technologies serves the medical and pharmaceutical markets as well as the semiconductor and specialty original equipment manufacturers sectors.

“We’ve seen some outsourcing trends in the OEM sector, in particular the semiconductor, telecom and the medical device markets for almost everything outside of the initial design in the market such as the sheeting and assembly,” said Harman. “They’re finding it more productive and quicker to market at a lower cost to outsource that. That has been going on in the aerospace market for years and now it has hit a lot of the other markets.”

Harman also said American Capital intends to realize some synergies between the newly acquired companies in terms of customers that can be serviced on each coast as well as add machining capabilities which would allow them to be a more value and integrated supplier to their customers.

“This is representative of the kind of situation we’re very good at in terms of being able to partner with management teams and executing on the strategy to create value through both internal and acquisition growth,” she said.

Last December American Capital invested $12 million in Sunvest Industries in the form of senior debt, senior subordinated debt with warrants and equity. LaSalle Bank provided a revolving line of credit for the deal.