Blue Wolf Capital’s CTG acquires H.C. Materials

Channel Technologies Group, a portfolio company of Blue Wolf Capital Fund II, said Friday that it has bought H.C. Materials. The seller was Dr. Pengdi Han. No financial terms were disclosed. As a result of the transaction, Dr. Han attains an equity stake in CTC and also joins its board. H.C. Materials was advised by Houlihan Lokey in this deal. Based in Bolingbrook, Illinois, H.C. Materials is a maker of giant-piezoelectric single crystals, specializing in lead magnesium niobate-lead titanate based piezocrystals and finished crystal elements.

PRESS RELEASE

Santa Barbara, CA – October 11, 2013 – An affiliate of Channel Technologies Group, LLC (“CTG”), a manufacturer of piezoelectric ceramics, transducers and complex sonar and navigation systems used in the defense, medical and energy industries, today announced it has acquired the assets of H.C. Materials Inc. and its affiliates (collectively, “HCM”) from Dr. Pengdi Han (“Dr. Han”). As part of the acquisition, Dr. Han will become an equity owner of CTG, as well as an active board member. Other terms of the transaction were not disclosed. CTG is a portfolio company of Blue Wolf Capital Fund II, L.P.
The acquisition enables CTG to capitalize on HCM’s global recognition and leadership in the piezoelectric single-crystal arena, especially within the medical ultrasound market. It also consolidates CTG’s position as a global leader in the ceramic-based piezoelectric industry.
Ralph L. Phillips, CEO of CTG, said, “This is an important strategic step for CTG as we continue to grow in mission critical segments of the defense, energy and medical technology sectors. The addition of H.C. Materials’ single-crystal technology strengthens our advanced materials segment, as well as our ability to deliver the high-quality, state-of-the-art technological applications demanded by our customers. We welcome H.C. Materials to the CTG team and are excited to expand the suite of cutting-edge solutions we are able to offer our customers.”
“By combining the capabilities of our two companies, we can further innovate and better address our customers’ needs,” said Dr. Pengdi Han, founder and president of H.C. Materials. “The core processes and techniques developed by H.C. Materials provide it with a leading global position. We are very excited about working with our new partners at Channel Technologies to create new applications for single-crystal piezoceramics.”
HCM’s operations will remain in its current Bolingbrook, Illinois location. CTG will continue to invest in research and development into next-generation applications for piezoelectric ceramics and single-crystals in both Bolingbrook and Santa Barbara.
Haranjeet Narulla, Principal at Blue Wolf, said, “We look forward to a long and fruitful partnership with Dr. Han as we continue to support CTG’s growth, including diversifying its product offering through strategically important acquisitions.”
Houlihan Lokey served as financial advisor to H.C. Materials in this transaction.
About Channel Technologies Group
Channel Technologies Group (www.channeltechgroup.com) designs and manufactures piezoelectric based advanced materials, sensors, and completed integrated systems that support mission critical applications for military and commercial markets. 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 numerous departments of the U.S. Navy and many leading defense contractors. CTG was acquired by a group led by an affiliate of Blue Wolf Capital Fund II, L.P. in December 2011.
About H.C. Materials Corporation
H.C. Materials Corporation (www.hcmat.com) is a worldwide leader in the development and manufacture of giant-piezoelectric single crystals, specializing in lead magnesium niobate-lead titanate (PMN-PT) based piezocrystals and finished crystal elements. H.C. Materials also supplies crystal products for next generation acoustic transduction devices in a variety of applications such as medical ultrasound imaging, ocean mining, sensors, transducers and sonar systems. H.C. Materials has two production lines located in Bolingbrook, Illinois, a western suburb of Chicago.
About Blue Wolf Capital Partners
Blue Wolf Capital is a private equity firm that takes control stakes in middle market companies based in the United States and Canada, and works with those companies to resolve complexities and achieve sustainable growth. Blue Wolf invests in strong businesses whose value can be increased by constructive resolutions of complex challenges, particularly those involving financial or operational distress, troubled labor relations, or governmental or regulatory issues. In July 2013, Blue Wolf closed on $300 million in limited partner equity commitments for its latest fund, Blue Wolf Capital Fund III, L.P. For additional information, please visit www.blue-wolf.com.