Blue Wolf Capital Partners Buys Channel Technologies

New York-based buyout shop Blue Wolf Capital Partners has acquired Channel Technologies Group, a manufacturer and supplier of piezo-electric ceramics, transducers and complex systems and services. Terms of the deal were not released. Blue Wolf bought the company from Channel Technologies Inc.

PRESS RELEASE
Blue Wolf Capital Partners LLC, the New York-based private equity firm, today announced that Blue Wolf Capital Fund II, L.P. (“Blue Wolf”), through an affiliate, has acquired Channel Technologies Group, LLC (“Channel Technologies” or the “Company”), a vertically-integrated manufacturer and supplier of piezo-electric ceramics, transducers and complex systems and services, from Channel Technologies, Inc. The Company’s executive management team and Gladstone Investment Corporation (NASDAQ: GAIN) are investing in the Company alongside Blue Wolf. Terms of the transaction were not disclosed.

Channel Technologies designs and manufactures products used in military, commercial, geophysical and medical applications. The Company has four divisions: Channel Industries, which manufactures piezoelectric ceramics; International Transducers, which designs, manufactures and repairs acoustic transducers; Sonatech, which provides consulting and highly engineered acoustic solutions for defense-industry customers; and Electro-Optical Industries, which manufactures advanced infrared and visible light spectrum test and calibration equipment. Based in Santa Barbara, CA, the company has approximately 250 employees.

The Company’s management team, led by CEO Kevin Ruelas, will remain with Channel Technologies under its new owner. Mr. Ruelas said, “We look forward to continued growth under Blue Wolf’s ownership. The financial resources and broad expertise they bring to the table will allow us to augment our organic growth and consider potential acquisitions to keep up with the rapid expansion of our end-markets.”

Blue Wolf Partner Adam Blumenthal said, “Channel Technologies serves customers with complex requirements, driven by both U.S. Government defense-spending priorities and the trajectory of the broader market. Channel Technologies has a diverse customer base, has been a market leader virtually since its inception in 1959, and is led by a smart, engaged management team. Blue Wolf’s commitment to managing the environmental, social and governance features of companies makes us the ideal partner for a company whose business is so closely tied to important national and global trends.”

Blue Wolf Principal Haranjeet Narulla added, “The Company’s cutting edge technology has sophisticated applications in many scientific, engineering, medical and military areas. We believe our experience working with government and businesses in the healthcare, energy and other industries, coupled with our operational focus, will make us a good partner for this dynamic organization. We expect to invest in all aspects of the Company, including human capital, capital equipment and information systems, to further strengthen the Company’s leadership position.”

Blue Wolf was assisted in this acquisition by Renaissance Strategic Advisors, a Washington, D.C.-based defense consulting firm. Holland & Knight served as Blue Wolf’s legal counsel.

About Channel Technologies Group
Channel Technologies Group (www.channeltechgroup.com) is a vertically integrated manufacturer that specializes in mission critical technologies for military and commercial applications. Since its founding in 1959 as Channel Industries, Channel Technologies has been providing a broad range of highly engineered value added products, components, and systems for use in the most demanding environments. Channel Technologies’ products and services are used in a variety of applications and by diverse end users, including medical device manufacturers, oil service and exploration companies, and customers in the defense industry, including several departments of the U.S. Navy and many leading defense contractors.

About Blue Wolf Capital Partners
Blue Wolf Capital Partners LLC is a private equity firm that invests in companies in which effective management of relationships with complex constituencies, such as government and labor, can change organizations and create value. For additional information, please visit www.blue-wolf.com.

About Gladstone Investment Corporation
Gladstone Investment Corporation is a publicly traded business development company that seeks to make debt and equity investments in small and mid-sized businesses in the United States in connection with acquisitions, changes in control and recapitalizations.