Blue Point Capital Partners continues to mold its metals solutions portfolio.
The Cleveland-based private equity firm has just acquired Commercial Metal Forming in a tax-free reorganization from Parker Hannifin Corp. for an undisclosed sum. Commercial Metal Forming makes cold-formed metal products, tank ends and tank accessories for storage vessels. It had $50 million in annual sales last year.
Blue Point is calling the new ownership group it formed with metals industry executive William Kowal, Metal Technology Solutions Inc. Kowal is president and CEO of the new entity. He was formerly president and chief executive of Senior Flexonics Inc., a metals business, which had $700 million in sales.
“We provided the equity,” in the deal, said Sean Ward, a principal with Blue Point, and “Bill Kowal also participated.” The investment was made through the Blue Point Capital Partners fund, which Ward said his firm expects to close by the end of this year. Its target is $400 million.
In February this year, Key Equity Capital spun out of KeyCorp by bringing Blue Point’s fund to market. KeyCorp is a Cleveland-based financial services company with assets of approximately $83 billion.
Blue Point kept Key Equity’s investment focus as it concentrates on industries such as manufacturing, services and distribution in the industrial and consumer markets, and investments in Commercial Metal Forming fits in with that strategy, said Ward.
“It’s one of the two largest companies out there in this segment,” he said, adding the company fits a niche in the metals market, and that “building larger industrial companies from smaller niches,” is part of his firm’s strategy. It may therefore acquire complementary companies that add to its geographic, purchasing or customer service standpoint. He said Blue Point has already signed a letter of intent to acquire a second complementary company, about which it is too soon to disclose details, he said.
Blue Point has a long history in the metals market. Among its portfolio companies is Consolidated Foundries, a precision casting company specializing in engineered investment, sand and permanent mold castings of small- to medium-sized parts. The majority of Consolidated’s revenues are generated in aerospace, military and industrial markets. It also owns EMS Inc. (Engineered Materials Solutions), one of the world’s largest producers of clad metals. The company’s products are primarily sold into the automotive, appliance, HVAC and telecom markets with applications as diverse as truck bumpers, industrial controls, cookware and copper cable-shielding products. And earlier in the year, Blue Point sold its stake in CSM Industries Inc., a source of a full line of alloys and molybdenum product forms and is a major producer of molybdenum metal products, for an undisclosed amount.
Key Equity Capital built a portfolio of 16 companies with combined annual revenue of more than $1.5 billion. Blue Point Capital has continued to manage that portfolio.