Sentinel Captures Third Infrastructure Deal

Target: Precision Pipeline Solutions LLC

Price: Undisclosed

Sponsor: Sentinel Capital Partners

Seller: Management

Legal Adviser: Buyer: Kirkland & Ellis LLP

Sentinel Capital Partners, which invests across a wide variety of sectors, has gained a majority stake in Precision Pipeline Solutions LLC, a Newburgh, N.Y.-based company that provides installation, repair and maintenance services to natural gas and electric utility companies. It will entertain add-on opportunities.

The purchase price was not disclosed, although the firm typically invests between $20 million and $50 million in companies generating EBITDA between $5 million and $25 million. The Sept. 9 deal marks the third investment in infrastructure for New York-based Sentinel Capital, whose five stated areas of focus include consumer products, food and restaurants, franchising, manufacturing, and service businesses. TD Bank financed the deal.

Precision Pipeline is a market leader that has benefited from a trend toward outsourcing among its customers, Eric Bommer, a partner at Sentinel Capital, told Buyouts, adding: “There’s some wind at its back.” Michael Fabian, a vice president at Sentinel Capital, added that natural gas and electric utilities based in the Northeast, where Precision Pipeline operates, have a particular need for the services the company can provide due to their aging infrastructure.

Management at the company, which founded Precision Pipeline seven years ago, decided to sell a controlling stake in the business as a way to generate funds necessary for the company’s continued growth.

The investment in Precision Pipeline marks the second deal from Sentinel Capital’s fourth fund, Sentinel Capital Partners Fund IV LP, which closed at $765 million in July 2008. Executives hope to invest in about 20 companies through the pool, up from 13 with Fund III, David Lobel, founder of the firm, told Buyouts in July 2008.

As for its two earlier infrastructure deals, Sentinel Capital in 2007 sold Fasloc Inc., a Martinsburg, W. Va.-based manufacturer of underground mine-support systems that it had acquired from E.I. du Pont Nemours & Co. That same year, Sentinel Capital bought Trinity Consultants Inc., a Dallas-based provider of air quality consulting and compliance services for companies in the energy, manufacturing, industrial and utility sectors.