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Praesidian funds Davis Inotek’s acquisition of GE division

Middle-market mezzanine firm Praesidian Capital Investors announced that it has provided $7m in debt financing for the recapitalization of manufacturer Davis Inotek Instruments—thus allowing the company to buy General Electric’s calibration and repair business.

Praesidian Capital Investors, a $157 million private fund, said it has helped finance Baltimore, Maryland-based Davis Inotek Instruments’ recent acquisition of rival GE Instrumentation Services, enabling its calibration business to become a market leader. Praesidian provided subordinated debt financing of $7 million (€5.6 million) for the manufacturer’s recapitalization. The senior debt for the transaction was provided by Merrill Lynch Capital.

Davis Inotek Instruments makes and distributes various test, measurement and control instruments for manufacturers, and also runs a calibration business for those instruments. Davis’ acquisition of GE’s calibration and repair business makes the combined company the single largest calibration provider in the country, with 28 laboratories nationwide in every major market in the continental United States. The labs are used by the aerospace, automotive, and pharmaceutical industries, among other manufacturers.

“This is a stable business with an exciting plan and strong prospects for growth,” said Praesidian managing partner Neil Marks in a statement. “Davis’ management team continues to demonstrate its ability to build significant value by executing an acquisition strategy in an attractive and highly fragmented market.”

General Electric just sold its electrical services unit, GE Supply, last week to Paris-based Rexel, a company owned by an investor group including Clayton, Dubilier & Rice, Eurazeo, and Merrill Lynch Global Private Equity. Dozens of businesses have been sold by GE since CEO Jeffrey Immelt took over five years ago.

This past April, Praesidian also provided $9.75 million in debt financing for the recapitalization of Pro-Motion Distributing, a California aftermarket auto parts distributor for compact sports cars. Praesidian’s debut $157 million fund closed in February of last year.