CHICAGO--(BUSINESS WIRE)--Frontenac announced today that it has completed an oversubscribed secondary market transaction to fund future growth initiatives of portfolio company, Motion & Control Enterprises (“MCE”). This vehicle will allow for Frontenac’s continued investment in MCE and is expected to fuel the company’s next phase of growth. The transaction was led by Churchill Asset Management and 50 South Capital who join a collection of new and existing Frontenac investors.
MCE is a leading industrial distributor and services provider of highly engineered, full lifecycle fluid, flow, automation, and air solutions. Frontenac acquired MCE in 2018 in partnership with CEO1ST executive Charley Hale. Together, Frontenac and Mr. Hale have completed 10 acquisitions and grown EBITDA by more than 15x. The continuation vehicle provides MCE with the resources to accelerate organic growth initiatives and pursue additional acquisition opportunities.
“Our executive-led strategy is a hallmark of Frontenac’s approach, and this transaction is another example of that strategy at work. With a continuation vehicle, we can continue to support strong companies and executives like MCE and Charley Hale. This continuation vehicle furthers Frontenac’s strategy to build sizeable and long-standing companies," said Ron Kuehl, Managing Partner at Frontenac.
“The increase in size and value of MCE is a result of operational improvements, driving significant organic growth, and executing on an established acquisition playbook, which is core to Frontenac’s strategic approach. We still have a long runway for those initiatives to substantially grow the platform. We're excited about the opportunity to continue building on that momentum in partnership with the MCE team,” said Neal Sahney, Principal at Frontenac.
“Frontenac has been a trusted partner from the beginning, and they’ve supported our organic and acquisition-based growth. We’ve transformed MCE into a company that was recognized in 2023 by Modern Distribution Management on its Top Industrial Distributors list. This additional investment allows us to extend our partnership with Frontenac as we continue to scale our company,” said Mr. Hale.
Evercore acted as financial advisor for the transaction and Kirkland & Ellis served as legal counsel for the deal.
Frontenac is a Chicago-based private equity firm. The firm focuses on investing in lower middle market buyout transactions in the consumer, industrial, and services industries. Frontenac works in partnership with established operating leaders, through an executive-centric approach called CEO1ST, which seeks to identify, acquire, and build market-leading companies through transformational acquisitions and operational excellence. Over the last 50+ years, Frontenac has built a franchise working with over 300 owners of mid-sized businesses as they address complex transition issues of liquidity, management enhancement, and growth planning. For more information, please visit www.frontenac.com.
Founded in 1951, MCE is a supplier of technical fluid power, automation, flow control, compressed air and lubrication products, repair & services, and bespoke solutions. The Company serves more than 23,000 MRO and OEM customers from 39 facilities located in 13 states. For more information, please visit www.mceautomation.com.
About Churchill Asset Management
Churchill, an investment-specialist affiliate of Nuveen (the asset manager of TIAA), provides customized financing solutions to middle market private equity firms and their portfolio companies across the capital structure. With $46 billion of committed capital, Churchill provides first lien, unitranche, second lien and mezzanine debt, in addition to equity co-investments, secondary solutions and private equity fund commitments. Churchill has a long history of disciplined investing across multiple economic cycles and their unique origination strategy, best in class execution and investment are driven by more than 150 professionals in New York, Charlotte, Chicago, Dallas and Los Angeles.
About 50 South Capital Advisors
50 South, a wholly-owned subsidiary of Northern Trust Corporation, provides investment solutions to private equity and hedge fund investors. The firm’s private equity platform was established in 2000 and structured as a fund of funds manager to give investors diversified access to the private equity market. In addition to the firm’s fund of funds investment practice, it also has the capacity to make direct investments. As of June 30, 2023, 50 South has approximately $10.2 billion in assets under management and $3.7 billion in assets under advisement.