Palladium Equity Partners has acquired a majority stake in Trachte USA, with existing investor MPE Partners staying on as a minority investor in the company. Trachte provides easy-deployment application-engineered protection and control buildings, serving electric utilities, renewable energy companies, hospitals and data centers. Stephens provided financial advice to Trachte on the deal, while Stifel advised Palladium.
New York, NY and Oregon, WI, September 22, 2020 – Palladium Equity Partners, LLC (along with its affiliates, “Palladium”), a middle market private equity firm with approximately $3 billion in assets under management, today announced that it has acquired Trachte USA (“Trachte”), a leading provider of engineered buildings, hardware and related solutions that house electrical controls, switchgear, and other advanced equipment and systems, in partnership with management and members of the Trachte family, who will continue to be investors in the business.
Palladium is acquiring a majority equity interest in Trachte from MPE Partners, which will also maintain a minority equity interest in the business. The terms of the transaction were not disclosed.
Trachte’s products serve a broad base of customers including electric utilities, renewable energy companies, hospitals and data centers. Among these products are steel structures that house and protect critical infrastructure within transmission and distribution substations and key equipment in industrial applications such as switchgear, motor controls and fire protection pumps. Trachte’s approximately 200 employees, including approximately 50 engineers, provide coverage to customers nationwide. The company has manufacturing facilities in Wisconsin and Georgia.
“We have been proactively seeking an investment in the Power and Utility space, and believe that Trachte is an ideal growth platform to execute this strategy,” said Caleb Clark, a Partner at Palladium. “Trachte provides a highly engineered, total solution to its customers. The company’s design engineering, project management and related value-added services and reputation for quality make it the provider of choice for leading utilities and equipment OEMs. We are excited to work with Trachte’s exceptional management team led by Jim Gross in supporting the company’s legacy and the execution of its organic and acquisition growth strategy. Lastly, we also are pleased to be partnering with the Trachte family, who will continue to be investors in the business.”
Jim Gross, President and Chief Executive Officer of Trachte, said, “We welcome Palladium as our new partner, and look forward to benefiting from their experience accelerating growth and enhancing operations, which is the focus of their portfolio companies. At the same time, we thank MPE Partners for their contributions to the company over the past five years.”
Joe Machado, Partner at MPE Partners, said, “Palladium brings a wealth of knowledge, expertise, and resources to Trachte. We are also impressed with their ability to close a negotiated transaction during the COVID pandemic. MPE will continue to support Trachte as a co-investor alongside Palladium.”
Marcos Rodriguez, Chairman and Chief Executive Officer of Palladium, said, “We look forward to supporting Trachte in writing the next chapter in a great American success story which began more than a century ago. The company’s rich history as a technological innovator began with the Trachte brothers’ first patent in 1910. We are delighted to be partnering with this team in their mission to upgrade, protect and harden the country’s electrical grid while making it more efficient by ensuring the delivery of safe, clean energy. We also are pleased to make an investment that represents a commitment to U.S. manufacturing jobs at this challenging time.”
Stephens Inc. acted as the exclusive financial advisor to Trachte on the transaction. Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. served as legal counsel. Stifel acted as exclusive financial advisor to Palladium on the transaction. Greenberg Traurig acted as legal counsel.
Trachte is a leading provider of easy-deployment application-engineered protection and control buildings. Founded in 1919, the company has unparalleled experience in prefabricated structures that provide state-of-the-art environments and protection for its customers’ investments in critical equipment and systems such as switchgear, battery systems, servers, and data center hardware that control and protect electrical infrastructure and equipment. Trachte’s success is based on continuous technological advancement, quality improvement and mutually beneficial relationships and strategic partnerships with end users, consulting engineers, contractors, OEMs and value-added resellers. Additional information may be found at www.trachteusa.com.
About MPE Partners
MPE Partners (“MPE” or “Morgenthaler Private Equity”) seeks to be the preferred partner for entrepreneur- and family-owned companies. Based in Cleveland, OH, and Boston, MA, MPE invests in profitable, lower middle market companies with EBITDA between $5 – $20 million. MPE has two primary target investment areas: high-value manufacturing and commercial & industrial services.
About Palladium Equity Partners, LLC
Palladium is a middle market private equity firm with nearly $3 billion in assets under management. The firm seeks to acquire and grow companies in partnership with founders and experienced management teams by providing capital, strategic guidance and operational oversight. Since its founding in 1997, Palladium has made 36 platform investments and over 135 add-on acquisitions. For more information on Palladium, please visit www.palladiumequity.com.