Apax Partners agreed to acquire a majority stake in engineering products and services outfit Contech Construction Products, giving the Ohio-based company an enterprise value in excess of $1 billion (€853 million).
New York-based Butler Capital Corp. is the selling party in the transaction, which is expected to close in January of next year.
According to the Wall Street Journal, Apax is paying around $330 million for Contech, and will assume roughly $670 million in debt.
Contech’s primary engineering focus is in the stormwater and bridge structure markets. The company, which reportedly has annual sales of around $750 million, operates through subsidiaries such as Stormwater360, Continental, Steadfast and BridgeTek.
Apax is financing the transaction with a senior debt component led by Wachovia Securities and a mezzanine tranche provided by Goldman Sachs Mezzanine Partners. Company management, led by Contech chairman and CEO Patrick Harlow, will roll over a significant portion of equity, representing a large minority stake.
Apax was advised on the deal by Wachovia Securities, while Ropes & Gray served as legal counsel to both parties, Apax and Contech.
John Megrue, co-CEO of Apax Partners, said in a statement: “This is an important transaction for Apax Partners, as it further strengthens our focus on relationship investing in an industry sector where we have deep experience.”
Apax augmented its North American efforts eariler this year, when it merged with Saunders Karp Megrue. Apax previously merged its European and North American operations in 2002 to more closely align the groups’ transatlantic businesses.