Navigation Buys Specialized Technical Services

Navigation Capital Partners, an Atlanta-based middle market private equity firm, has acquired Specialized Technical Services, Inc., a provider of infrastructure upgrades and services to utilities. STS is the first in a series of acquisitions planned by the firm on this platform.

Press release:

Navigation Capital Partners (NCP), an Atlanta-based middle market private equity firm, has acquired Specialized Technical Services, Inc. (STS), a leading provider of smart grid infrastructure upgrades and meter-related services to municipal, co-operative and investor-owned utilities. STS is the first in a series of acquisitions planned by NCP in support of its initiative to build an industry-leading provider of value-added field and data management services to electric, water and gas utilities.

STS, based in Richmond, Ky., provides a wide range of solutions designed to enhance a utility’s ability to monitor and manage its assets, including contract meter reading, Advanced Metering Infrastructure (AMI)-meter change outs and project management for mass meter deployments, Automated Meter Reading (AMR)-meter retrofits, meter calibration, testing and other lab services, and a variety of related data management services.

NCP has appointed Robert E. Shively, a member of its Executive-in-Residence program, as chief executive officer of STS. Shively formerly served as the president of SM&P Utility Resources, one of the largest providers of underground locating services to utilities nationwide. NCP’s “Executive-in-Residence” program is the firm’s approach of identifying experienced leadership within an industry attractive for investment, and then searching as a team for the right companies to acquire. NCP also engaged investment banking firm TM Capital Corp, with offices in Atlanta, Boston and New York, to support this initiative. Womble, Carlyle, Sandridge & Rice, PLLC served as legal counsel.

NCP plans to help STS expand into a “one-stop shop” of high-value field and data management solutions designed to enhance a utility’s ability to manage its assets, like the electric grid. Additional acquisitions are expected to complement STS’s core capabilities, expand the breadth of its service offerings and broaden its geographic reach.

“We are excited about combining Rob’s background of selling to utilities and managing a large, distributed, field services workforce, with STS, which has established itself within the meter-services niche,” said Larry Mock, managing partner of NCP. “We believe that the strength of the platform will enable us to quickly broaden the scope of services that we can offer to utilities. And with the added breadth of several additional target acquisitions, we can offer utilities and meter manufacturers the opportunity to “partner” with a solutions provider with substantially greater scale and capabilities than many of its competitors.” Mock and Shively will join the STS board of directors along with NCP Partner Eerik Giles and NCP Operating Partner Craig Kirsch.

NCP believes that utilities, driven by a number of market and regulatory factors, as well as by ongoing Federal stimulus investment in the development of “smart grid”, are entering a long-term infrastructure upgrade cycle to improve the “intelligence” of physical assets, and that this cycle will provide opportunities for service providers to grow at rates above historical norms. Part of this upgrade cycle will involve the continued deployment of AMI, or “smart” meters, a segment of the market in which STS participates.

“STS is well-positioned to capture new opportunities in the marketplace as they arise,” said Shively. “We will be listening to our business partners and integrating lessons learned in order to develop and market industry-leading solutions that enable our customers to upgrade their field infrastructure in a seamless and positive manner.” Shively continued, “With the backing of NCP and the support of STS’s current management, I am convinced that we have the resources, the talent, the desire and the energy to support our customers in a value-enhancing manner, all of which are necessary to propel us into an industry-leading position.”

NCP is seeking additional, high-quality companies to be a part of this initiative.

Ideal companies currently provide field services, data management solutions and/or data hosting solutions to customers in the utility sector and possess the following characteristics:

· A preferred range of $20 million to $100 million in revenue;

· A history of sustained profitability; and

· EBITDA of $3 million plus.

Shively plans to leverage the expertise and experience of existing senior executives within the acquired companies; the leadership team will be augmented with additional seasoned veterans as needed. Please contact Robert Shively at 317.750.0140 or rshively@teamsts.com with ideas of companies that may fit the profile listed herein.

About Navigation Capital Partners

Navigation Capital Partners (NCP) is an Atlanta-based private equity firm that makes growth and buyout investments in middle market niche manufacturing, distribution and business services companies across the United States. The managers of NCP formerly founded and managed Mellon Ventures, the private equity investment partnership of Mellon Financial Corporation. With the backing of Goldman Sachs Vintage Funds, NCP acquired the private equity portfolio of Mellon Ventures in December 2006. NCP currently manages approximately $375 million of invested and committed capital. For more information, visit www.navigationcapital.com.

About Specialized Technical Services, Inc.

Specialized Technical Services, Inc. (STS) is a utility services provider with headquarters in Richmond, Ky., and support facilities in Bessemer and Montgomery, Ala. STS provides a broad range of meter-related services to municipal, co-operative and investor-owned utilities. Meter-related services range from contract meter reading, to installation and change-outs to “smart” meters and associated data management.

For more information, visit www.teamsts.com.