Sparton Corporation, a portfolio company of Cerberus Capital since March 2019, has agreed to sell its contract manufacturing unit, Manufacturing & Design Services (MDS), to One Equity Partners.
MDS engineers, designs, and manufactures electronic and electromechanical devices, including printed circuit card assemblies and cable/wire harnesses. The unit specializes in low-to-medium volume manufacturing of products used in military, aerospace, industrial, medical, and biotechnology sectors. MDS operates nine plants in the United States and one plant in Vietnam.
At the closing of this transaction, which is expected by the end of the third quarter, MDS will rebrand as Spartronics, and Paul Fraipont, the current president and chief executive officer of MDS, will lead the newly-named company.
“We are extremely proud of the robust manufacturing platform we have built over the decades and are excited about our opportunities ahead,” said Mr. Fraipont. “MDS has become a trusted partner to many leading businesses around the world, with a strong reputation for delivering high-quality, complex manufacturing solutions. Today’s announcement underscores the strength of our MDS business and our unwavering commitment to providing best-in-class services. We look forward to our partnership with OEP and leveraging their industry expertise as we reach new heights.”
One Equity Partners, founded in 2001, was spun out of JP Morgan in 2015. The firm invests from $30 million to $300 million in industrial, healthcare, and technology companies that are based in North America and Europe. In October 2019, OEP held a final closing of its seventh fund, One Equity Partners VII LP, with $1.75 billion in total capital commitments, the largest fund that OEP has ever raised. OEP has offices in New York, Chicago, and Frankfurt.
“We look forward to supporting the very talented team at MDS as they continue to meet the strong global demand for advanced manufacturing solutions while helping them to identify new organic and strategic acquisition opportunities that will drive growth in North America and worldwide,” said Chip Schorr, a senior managing director at OEP. “MDS is a fantastic platform, and this transaction is well aligned with OEP’s historic experience in acquiring non-core but high growth potential businesses through corporate carve-outs that position them for their next chapter of growth as an independent company.”
In addition to its MDS unit, Sparton also operates an engineered components and products unit which designs, develops, and produces products – including anti-submarine warfare devices – for the U.S. Navy, allied governments, and defense contractors. The company is headquartered near Chicago in Schaumburg, Illinois.
“The sale of MDS is an important milestone for both our defense products and contract manufacturing businesses, which have operated in separate industries with distinct long-term strategies,” said Sparton CEO Bill Toti. “Now, these leading platforms will be able to focus on their respective core strengths and capitalize on opportunities specific to each business. We wish our MDS colleagues all the best and look forward to watching their continued success in their next chapter.”
Lincoln International was the financial advisor to Sparton on the sale of MDS.
Private Equity Professional | June 30, 2020
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