- Why it’s important: SCG’s latest acquisition further expands its focus on industrials in the midwest
Independent sponsor Stratford-Cambridge Group (SCG) acquired AIC Equipment & Controls and Platsi-co Equipment Co., assets of Applied Instruments Company, in a deal that closed June 28, Jay Freund, the firm’s managing director, told Buyouts.
Founded in 1974, Applied Instruments is an aftermarket replacement company that provides injection moldings to the plastics processing and heat-treating industries, according to its website.
“It’s got some of the basic, raw characteristics that we look at in any deal. It’s got a terrific management team and employee base that’s built a solid foundational business,” Freund said. “We found that the business has some very interesting and actionable growth opportunities that we can help them out with.”
Stratford-Cambridge Group focuses on lower middle market industrial businesses in the midwest. Other businesses in the firm’s portfolio include Aetna Bearing Company, Hy-Brid Lifts, Speedgrip Chuck Co. and Sterling Technologies Inc. as active portfolio companies under SCG.
“When we say industrial, we usually mean manufacturing and within manufacturing, we’re looking for companies that have engineered products or some intellectual property surrounding their existing product line,” Freund said. “That’s a very key, high level aspect of each company that we look for.”
The Michigan-based independent sponsor was founded in 2009 by Stephen Ellis. Ellis wanted “to utilize his operational skills and experience to build value within its portfolio,” according to his bio on SCG’s website.
Financial details of the transaction were not disclosed. Stratford-Cambridge usually invests in companies that have $1 million to $5 million in Ebitda and that “this company falls in that range.”
Freund joined Stratford-Cambridge Group in 2018, after spending four years as partner at private equity firm Canal Holdings. He also worked for more than 15 years as managing director at PNC Erieview Capital, according to his LinkedIn.
SCG may focus on smaller, industrial companies in the midwest, but sees organic growth opportunities with Applied Instruments that would expand its client base to other parts of the U.S., Canada and Mexico, Freund said.
“I think our baseline strategies will always be what it is today, in terms of size, location and types of businesses that we’re interested in,” Freund said. “There may be tweaks down the road, but right now we’re pretty happy where we’re at and the results that we’re getting.”