Gryphon takes majority stake in Potter Electric Signal

Gryphon Investors has acquired a majority stake in St. Louis, Missouri-based Potter Electric Signal Company LLC, a provider of products for the fire safety industry. No financial terms were disclosed. Stifel Nicolaus served as financial adviser to Gryphon while Harris Williams & Company did likewise for Potter.

PRESS RELEASE

San Francisco, CA and St. Louis, MO – December 20, 2017 – Gryphon Investors (“Gryphon”), a San Francisco-based private equity firm, today announced that it has made a majority investment in Potter Electric Signal Company, LLC (“Potter” or “the Company”), a leading provider of mission critical products to the fire safety industry.

Kelly Romano, the former president of several of United Technologies’ Fire and Security, and Carrier Corporation global businesses; Mark Levy, the former President and CEO of Honeywell Life Safety; and Rob Salek, the former CEO of Gryphon portfolio company Consolidated Fire Protection, will join the Board of Directors of the Company (along with Gryphon professionals Bob Grady, Wes Lucas and Felix Park) as part of Gryphon’s investment. CEO Bernie Lears and the Potter management team have retained a significant ownership position in the Company, and will continue to lead the business, managing all day-to-day operations. Terms of the transaction were not disclosed.

Founded in 1898 and based in St. Louis, Missouri, Potter designs and manufactures specialty electronic and electromechanical products and solutions to enable fire safety protection and code compliance in commercial, industrial, multi-family, and residential end-markets in both the U.S. and international markets. Potter is a market leader with #1 share in the sprinkler monitoring products segment, and the Company has been quickly gaining share in the fire alarm systems segment. Potter is known for its high quality product offerings and solutions, and its brand, built over the past 100 years, is synonymous with fire safety and protection.

Following multiple years of attractive financial performance and increased demand for its products and solutions, Potter is well positioned for continued strong growth based on innovations, advanced product introductions, investments in sales and marketing, expansion with current customers in both the U.S. and international markets, increased penetration in the fire alarm systems market, and acquisitions. The partnership with Gryphon will provide Potter with significant resources to accelerate these investments, with a specific focus on innovation, new solutions, and increased customer service and support.

Potter CEO Bernie Lears commented, “We are excited to partner with Gryphon as we enter the next exciting stage of Potter’s evolution. Potter has many opportunities to serve our existing customers even better and to expand our share in markets such as the fire alarm systems segment. We look forward to working with Gryphon to grow our business, and most importantly to deliver even more outstanding products and service to our customers in the coming years.”

Bob Grady, Partner and Co-Head of the Industrial Growth Group at Gryphon, said, “This investment aligns very well with Gryphon’s focus on investing in companies with growth potential in the specialty electronics and light manufacturing and assembly sectors, and it takes advantage of Gryphon’s extensive prior experience in the fire safety segment. We are excited to partner with Bernie Lears and his team and we look forward to working with them, and to supporting the Company’s continued growth both organically and through acquisitions.”

Wes Lucas, Operations Partner and Co-Head of the Industrial Growth Group at Gryphon, added, “We were attracted to Potter’s long history of success in inventing high value and high quality solutions for the fire safety industry, and its mission-driven Company culture regarding customer service. The Company is committed to maintaining its leadership position in the sprinkler monitoring segment and to serving its existing customers even better through increased investment in technology and product innovation. In addition, there are exciting future growth opportunities in segments such as fire alarm systems and in international markets. Gryphon is enthusiastic about providing both capital and expertise to support Potter’s management team as they continue to invest in their business for the benefit of customers, employees, and shareholders.”

R. David Andrews, Gryphon’s Founder and CEO, commented, “Potter is another exciting example of Gryphon’s successful strategy of developing proprietary insights in specific attractive industry sectors and building expertise within these sectors. The Company is our third investment in the fire safety industry, after Consolidated Fire Protection and JENSEN HUGHES. In addition to the significant positive macro trends benefiting the fire safety sector and Gryphon’s successful track record of investing in this sector, we are also very pleased to support Potter’s mission to help save lives.”
Stifel Nicolaus acted as financial advisor to Gryphon and Harris Williams & Company acted as the financial advisor to Potter. Sheppard, Mullin, Richter & Hampton LLP acted as the legal advisor to Gryphon and Bryan Cave was the legal advisor to Potter.

About Potter Electric Signal Company, LLC
Headquartered in St. Louis, Missouri, Potter Electric Signal Company (www.pottersignal.com) designs and manufactures a wide variety of mission critical specialty electronic and electromechanical products for the fire safety industry. The company offers the industry’s largest portfolio of sprinkler monitoring devices in addition to designing and manufacturing fire alarm systems and nitrogen based corrosion prevention systems. Potter has multiple office locations within the U.S. and serves its customers across the globe through its offices in UK and China. The company traces its roots to 1898, when Charles E. Potter began developing products that sent electronically coded signals to a central monitoring station, which enabled instant dispatch of fire and police officials in the event of a fire emergency. The company and its employees are dedicated to continuing the legacy of Charles E. Potter and to their mission of helping save lives.

About Gryphon Investors
Based in San Francisco, Gryphon Investors (www.gryphoninvestors.com) is a leading private equity firm focused on profitably growing and competitively enhancing middle-market companies in partnership with experienced management. For 20 consecutive quarters, Gryphon has been ranked in Preqin’s prestigious quarterly PE report as one of North America’s top-decile buyout firms based on consistency of strong investment returns. Managing over $2.6 billion of equity investments and capital since 1997, the firm has an extensive track record of leading equity investments of $50 million to $200 million per portfolio company in enterprises with sales ranging from approximately $100 million to $500 million. Gryphon prioritizes investment opportunities where it can form proactive partnerships with owners and executives to build leading companies, utilizing Gryphon’s capital, specialized professional resources, and operational expertise. Gryphon closed its fourth private equity buyout fund, Gryphon IV, in November 2016 at $1.1 billion, and raised a $100 million captive mezzanine fund, Gryphon Mezzanine Partners, in August 2017.