The Sterling Group, a middle market private equity firm based in Houston, Texas, today announced that they have finalized the sale of their portfolio company, Velcon Filters, LLC to Parker Hannifin Corporation (NYSE: PH). Terms of the transaction were not disclosed.
Headquartered in Colorado Springs, Colorado, Velcon is a niche manufacturer of filtration systems, including vessels and replacement cartridges, which meet specific requirements for fluid filtration processes in a variety of domestic and international end-markets.
When Sterling acquired Velcon in 2009 from the founding family, the business was the market leader in the aviation filtration market with a stable base of recurring revenue. Sterling and Velcon together have made three strategic acquisitions over the past three years, expanding Velcon’s end markets beyond aviation into both upstream and downstream oil and gas filtration, as well as other process applications, and diversifying Velcon’s geographical footprint into Europe, the Middle East, Asia and Africa. “Sterling partnered with the Taylor family to capitalize on Velcon’s market leading position in jet fuel filtration, and together we have built a global and diversified industrial fluid filtration company,” said Greg Elliott, Partner at The Sterling Group. Under Sterling’s ownership, Velcon has more than doubled in size.
The combination with Parker’s filtration business is expected to further solidify Velcon’s position as the highest standard in the filtration industry. “This acquisition brings us a leadership position in aviation and industrial fuel filtration, particularly for aviation fuel which requires specialist expertise and certifications,” said Peter Popoff, President of the Filtration Group at Parker. “We are excited about the opportunities to combine our strengths and extend our solutions to more customers, markets and geographies.”
During its 30 year history, The Sterling Group has partnered with 13 different family businesses, bringing its operating expertise and a commitment to partnering with management to improve North American based industrial businesses. The Sterling Group was advised by Robert W. Baird & Co. and Willkie Farr & Gallagher.
About The Sterling Group
Founded in 1982, The Sterling Group is a private equity investment firm that targets controlling interests in basic manufacturing, distribution and industrial services companies. Typical enterprise values of these companies range from $100 million to $500 million. Sterling has sponsored the buyout of 42 platform companies and numerous add-on acquisitions for a total transaction value of approximately $9.9 billion. Currently, Sterling has $1.1 billion of committed capital under management through three funds. Current portfolio companies include CST Industries, Universal Fiber Systems, Express, B&G Crane, Saxco International, Stackpole International, Liqui-Box and Dexter Axle.
About Parker Hannifin Corporation
With annual sales exceeding $13 billion in fiscal year 2012, Parker Hannifin is the world’s leading diversified manufacturer of motion and control technologies and systems, providing precision-engineered solutions for a wide variety of mobile, industrial and aerospace markets. The company employs approximately 60,000 people in 48 countries around the world. Parker has increased its annual dividends paid to shareholders for 56 consecutive fiscal years, among the top five longest-running dividend-increase records in the S&P 500 index. For more information, visit the company’s web site at www.parker.com or its investor information web site at www.phstock.com.
Past performance is no guarantee of future results and all investments are subject to a loss.