Benford zooms in on the uncharted glass inspection market

Including LiteSentry's add-on for Softsolution, Benford to date has invested in six test and measurement businesses, and eight in the broader industrial tech space.

Benford Capital Partners is quietly building out a unique platform in a pocket of industrial technology that specializes in glass inspection – a market which, up until now, has remained largely uncharted territory for private equity.

Benford’s LiteSentry this week acquired Softsolution, an Austrian glass inspection company within the test and measurement sector – an industry well explored by the lower-mid-market firm.

The add-on is the first for LiteSentry, which is also a glass inspection company but highly focused on optical distortion.

“If you ever had a pair of sunglasses on a bright sunny day, the reflection [iridescence] you get back is distorted,” explained Benjamin Riefe, managing director at the firm. “LiteSentry would reject glasses with those specs.”

Applying that deep sector knowledge, Benford bought Northfield, Minnesota-based LiteSentry back in November 2019, inking the deal before raising its first vehicle. Benford, which launched as an independent sponsor in 2004, closed its $130 million debut fund in September last year.

Founded in 1999, LiteSentry plays in a relatively small market, designing and manufacturing patented inspection technology for the solar photovoltaic systems and sheet plastic industries.

With Softsolution in the fold, LiteSentry is set to considerably grow its potential end-market. “[Softsolution] has a broader market application because they are measuring for a simpler, more basic type of defect – scratches, size imperfections etc.,” Riefe said.

Softsolution’s total addressable market is more than 5x that of LiteSentry, according to Riefe.

While Chicago-based Benford is well-versed with industrial tech companies, this is the firm’s first investment outside of North America.

The proprietary deal was relatively easy to identify once the firm started mapping the market of add-ons [for LiteSentry], Riefe said. “It’s a niche market in general, worldwide,” he reasoned.

Softsolution has a satellite office in Glenview, Illinois, not far from Benford’s headquarters. “In one of their [founders’] trips to Chicago I was able to meet with them [Softsolution] in person and started to develop a relationship,” Riefe said.

The deal closed on June 30, following a letter of intent signed in the fourth quarter of last year.

A long period of exclusivity and diligence was attributed to the Austrian government’s new screening process for foreign investments, which came into effect July 2020.

“We were frankly very surprised that a small-niche glass company could warrant that level of approval,” he added.

Looking ahead, the Austrian manufacturer will expand LiteSentry’s customer base in Europe and vice versa. Another upside, Riefe added, is an opportunity for the companies to work together on various technology enhancements.

Benford will continue to fuel the growth trajectory at LiteSentry with add-ons that will be proprietarily sourced, the investor said. “We have a list of targets that we know through learning the industry,” he said.

“If we already own a platfrom, it’s more impactful for the seller [to hear directly from us] because then he knows who he’s dealing with,” Riefe explained. The firm also has a full-time operating partner that sources test and measurement deals.