Berkshire, Summit Go Nuclear

Private equity firms are seeing a radioactive glow from Bartlett Nuclear, a company that recently gained approval and sizable investment from Berkshire Partners and Summit Partners.

Plymouth, Mass.-based Bartlett Nuclear provides radiological protection services to the U.S. government and the nuclear power industry. It claims to be the largest supplier of radiation protection and support staff in the nation.

While the size and terms of the deal were not disclosed, Bartlett Nuclear and the two Boston-based private equity firms confirmed the deal closed under $100 million. The two investment banks that worked on the deal, Merrill Lynch Capital Markets and the Royal Bank of Scotland, are also providing debt equity financing. Individual investors, including company management, also invested.

Company founder Bruce Bartlett has retained a “significant” stake in the company and will continue to serve as chairman. Vice President Gabriel Gomez and Managing Partner Marty Mannion of Summit Partners will join Bartlett on the board of directors. Berkshire Principal Michael Ascione and Managing Director Kevin Callaghan will also serve on the board.

Bartlett founded the company in 1979 and was not initially familiar with private equity investment when he set out to raise outside capital almost a year ago. He chose Berkshire and Summit out of 11 private equity firms that made investment proposals.

“I knew this private equity industry existed, but I didn’t realize how extensive it was,” he said.

Bartlett, which has 3,000 employees and $200 million in annual revenue, plans to expand to help meet the U.S. government’s needs to clean up Cold War era nuclear waste sites. The company has also developed a patent pending radiation detection device for seaports, which is close to being adapted for use by the Port of Houston. The technology is currently undergoing test at other seaports.

Bartlett also sees opportunities for nuclear cleanup work in Europe, which draws a much larger percentage of its power from nuclear energy than does the United States.

Although there are no plans for another fund-raising, Bartlett says the company has considered growing through acquisitions and is actively looking into such opportunities now.

Investors, meanwhile, are actively looking at energy. Investors lit up industrial and energy private equity deals with more than $7.5 billion in 2003, almost double 2002’s total deal flow of $4.5 billion, according to Thomson Venture Economics (publisher of PE Week).

Plus, the Energy Investors Funds Group (EIF Group) recently announced it raised $250 million to close the United States Power Fund. EIF Group is a private equity fund manager that invests in the energy and electric power market, usually in power plants.

The firm, which became independent via management buyout from Dresdner Bank, now has about $700 million under management.