Electrical Components International, Inc., a portfolio company of KPS Capital Partners, agreed to acquire Whitepath Fab Tech, Inc., which supplies components and assembly services to the heaving, ventilation and air conditioning industry. Financial terms were not disclosed. A syndicate of banks and institutional investors, led by BofA Merrill Lynch, will provide financing.
KPS Capital Partners, LP (“KPS”) announced today that its portfolio company Electrical Components International, Inc. (“ECI”) has entered into a definitive agreement to acquire Whitepath Fab Tech, Inc. (“Whitepath” or the “Company”). Financial terms of the transaction were not disclosed.
ECI is the world’s leading manufacturer of wire harnesses and value-added assembly services for consumer appliance and specialty-industrial applications. ECI has over 850 customers globally and its products can be found in a wide variety of electronic and electro-mechanical applications, including home appliances, agriculture and construction, heating, ventilation and air conditioning (HVAC), specialty transportation, automotive, commercial appliance, and commercial electronics. ECI has 13 manufacturing facilities in seven countries with approximately 15,000 associates worldwide. KPS acquired ECI in May 2014.
Whitepath is a leading North American supplier of control boxes, wire harnesses, and value added assembly services to the HVAC industry. The Company has long standing relationships with the leading commercial HVAC OEMs. Whitepath manufactures the control box as well as the wire harnesses used within the control boxes it assembles. Whitepath has a unique system and process enabling it to manufacture over one million possible control box permutations with short lead times. The Company operates five manufacturing facilities, four located in Georgia and one located in Saltillo, Mexico and employs approximately 260 associates.
Raquel Palmer, a Partner of KPS, said, “We are very excited about the progress that ECI has made under KPS ownership, with the company generating record profits in 2015. The strategic and industrial logic of ECI acquiring Whitepath is compelling, as it allows ECI to continue to expand its presence in specialty-industrial end-markets while also leveraging its industry-leading quality, service and product development capabilities to enhance Whitepath’s operations. We look forward to continuing to aggressively grow ECI both organically and through acquisitions in both North America and around the world.”
David Webster, Chief Executive Officer of ECI, said, “The acquisition of Whitepath is an important step in ECI’s continued expansion and diversification. We are very impressed by Whitepath’s unique product capabilities and strong relationships with its customers. The acquisition of Whitepath allows ECI to expand relationships with key specialty-industrial customers, cross sell products into new geographies and product segments and expand into new markets. Furthermore, we believe that we can enhance Whitepath’s manufacturing operations by leveraging ECI’s culture of manufacturing excellence and continuous improvement. ECI intends to invest significant additional capital and resources into Whitepath to ensure total customer satisfaction.”
Completion of the transaction is expected in May 2016.
Paul, Weiss, Rifkind, Wharton and Garrison LLP is serving as legal counsel to KPS and ECI and its affiliates. Financing for the transaction will be provided by a syndicate of banks and institutional investors with BofA Merrill Lynch acting as Lead Arranger.
About Electrical Components International
ECI was founded in the 1950s and is headquartered in St. Louis, Missouri with 13 manufacturing facilities, 19 distribution centers and sales and engineering offices located in North America, South America, Asia, Europe and Africa. ECI is the leading global manufacturer and marketer of wire harnesses and provider of value-added assembly services for the home appliance industry and is a leading provider of wire harnesses to a diverse range of end markets. ECI has over 850 customers globally and its products can be found in a wide variety of electronic and electro-mechanical applications, including home appliances, agriculture and construction, heating, ventilation and air conditioning (HVAC), specialty transportation, automotive, commercial appliance, and commercial electronics. ECI employs approximately 15,000 associates worldwide. For more information, please visit www.ecintl.com.
About Whitepath Fab Tech, Inc.
Headquartered in Ellijay, Georgia, Whitepath is a leading North American supplier of control boxes, wire harnesses, injection molding products, and value added assembly services to the HVAC industry. Whitepath operates five manufacturing facilities, four located in Georgia and one located in Saltillo, Mexico and employs approximately 260 associates.
About KPS Capital Partners, LP
KPS is the manager of the KPS Special Situations Funds, a family of investment funds with approximately $5.4 billion of assets under management. KPS seeks to realize significant capital appreciation by making controlling equity investments in companies across a diverse range of manufacturing industries experiencing a period of transition or challenged by the need to effect immediate and significant change. The KPS investment strategy is based primarily upon partnering with world-class management teams to effect material and sustainable improvements in the operations of its businesses. Thereafter, KPS focuses on growing its businesses, both organically and through strategic acquisitions. KPS portfolio companies have aggregate annual revenues of approximately $5.1 billion, operate 93 manufacturing facilities in 23 countries, and employ approximately 41,000 associates, directly and through joint ventures worldwide. The KPS investment strategy and portfolio companies are described in detail at www.kpsfund.com.