Miami-based private equity firm H.I.G. Capital last month picked up Lakeland, Fla.-based Viasys Corp., a company that provides engineering, installation and maintenance services for the transportation and electric utility industries, in a deal completed entirely with equity. Terms of the transaction are undisclosed.
The equity for the deal was invested from H.I.G. Fund II, which currently has about $105 million of its $255 million invested. Matthew Sanford of H.I.G. said that the firm had a short time frame in which to complete the transaction and take advantage of a very attractive price. “Because of the short time frame we didn’t have the time to go to our normal lending partners with a professional package, so we’ll be financing over the course of the next couple months,” he said.
Viasys, formerly owned by Bracknell Communications, generates business through two businesses – one that focuses on the integration and installation of intelligent transportation systems (ITS), and another that installs underground power distribution systems for electric utility companies. Viasys counts a number of government transportation agencies among its customers, which was an attractive ingredient in the deal for H.I.G. “This is a sector that you can project fairly far in the future because it’s driven to a large extent by government spending,” said Sanford. “And with the Transportation Equity Act for the 21st Century (TEA-21), you can look out five to 10 years in the future and see there’s a tremendous amount of money that’s going to be spent in the build-out of intelligent transportation systems across the country.”
TEA-21 makes part of its mission to deploy ITS throughout the country over the next six years and it allots more than $200 billion to do so. Viasys, which has revenue of approximately $100 million, has a committed backlog of more than $90 million of ITS contracts.
Initially, H.I.G. plans to grow Viasys’ business internally, but will eventually look to make add-on acquisitions to the utility side of the business.
H.I.G. also was drawn to similarities between Viasys and other successful companies in its portfolio. As examples, Sanford cited Axion Communications, a Fort Lauderdale, Fla.-based company that is working to consolidate suppliers of in-plant telecommunications infrastructure services, and Orius, an exited portfolio company based in West Palm Beach, which engineers, installs, and maintains aerial and underground fiber optic, coaxial, and copper cable systems for telecommunications clients.
“So while this is a slightly different sector, it’s one that we know and are fairly comfortable with,” said Sanford, adding, “We like this sector in particular because it’s a type of construction work that requires a fair amount of sophistication and ability to manage complex projects. It’s also one that’s sheltered from the problems in the telecom market.”