Capstone Partners advised Garlock Pipeline Technologies (GPT) — a manufacturer of critical pipeline sealing and electrical isolation products — on its sale to Branford Castle Fund II, as well as on the accretive sale leaseback of its 64,000 sq ft manufacturing facility with Tempus Realty in a separate, simultaneous process. Terms of the deals were not disclosed.
Based in Denver, Colorado, Garlock Pipeline Technologies produces critical-service flange isolation kits (FIKs) and monolithic isolation joints (MIJs) for oil, natural gas, and water pipeline applications globally. Prior to the acquisition, GPT was an operating division of Enpro Industries (NYSE:NPO). GPT’s patented, highly engineered products help prevent the leading causes of pipeline failures and protect against potential explosions, fires, and pollution. GPT’s “Pikotek“ brand is known as the pioneer of the flange isolation gasket industry and is recognized as the original brand to have introduced FIKs to the broader market in the 1980s.
Branford Castle is a private market investor focusing on lower-middle-market investments, with a more than 30+ year history of helping to grow businesses. The firm typically makes control investments in companies with less than $15 million of EBITDA and a leadership position in a niche industry. Branford is particularly keen on the strong relationships it develops with its portfolio company managers. Branford has particular expertise in industrials/specialty manufacturing, consumer products, business services and logistics.
Tempus Realty Partners is an investor-centric real estate investment partnership focused on acquiring and developing commercial real estate mainly in the South and Midwest. Tempus aims to create superior risk-adjusted returns via unique commercial real estate opportunities by investing with its network of partners in targeted cities. To date, Tempus has acquired $800,000,000 of property in 24 states over the past six years.
Darin Lane, President at GPT, said
“We look forward to our next stage of growth in partnership with Branford Castle. With Branford’s support, we are ready to hit the ground running with our growth initiatives.”
"Capstone successfully completed a difficult and complex carveout transaction for us during a tightening M&A market. They provided excellent guidance throughout the deal and remained very nimble as the transaction took some difficult turns."
David Castle, Managing Partner at Branford Castle, added
“We are excited to partner with Darin and the GPT leadership team and help them expand their products into new markets and geographies. We believe the company’s technological leadership and established reputation of quality and reliability makes it well-positioned for future growth.“
Wolfgang Zahner, Director at Capstone Partners, commented
“Our team was delighted to support Enpro and GPT as the companies turn to their next chapters. We see Engineered Products companies with a large, branded install base and aftermarket sales increasingly targeted by buyers, and we expect to see similar trends moving accelerate over the next two years. Further, we expect to see sale leasebacks and other multi-pronged sale mechanics utilized by sellers in the middle market. Doing so unlocks value by aligning cash flow profiles to the relevant investor type. This affords buyers opportunity to underwrite their investment without dilution from other asset classes. We delight in achieving a fantastic outcome for every party involved, to include the seller, management team, debt provider, real estate buyer and private equity firm. This transaction highlights the benefits to the seller when combining the multi-pronged capabilities of Capstone under one team.”