MidOcean Partners Acquires Arnott Industries, a Leading Suspension Products Platform for the Auto Aftermarket

Rhea-AI Summary

MidOcean Partners has acquired Arnott Industries, a leading designer and manufacturer of air suspension systems for the automotive aftermarket. Founded in 1989, Arnott offers over 800 products for light passenger vehicles with coverage of approximately 90% of air-equipped vehicles in operation. The company produces OE quality or better replacement products at its American and European facilities. This marks MidOcean's fourth investment in the auto aftermarket sector, following investments in Cloyes, FullSpeed Automotive, and Holley Inc. (NYSE: HLLY). Financial terms were not disclosed.

Positive

• Market leadership position as #1 air suspension replacement brand
• Broad product portfolio with 800+ products and 90% market coverage
• High-quality, non-discretionary product offerings
• Strong manufacturing presence in both US and European markets

Negative

• None.

Insights

Investment Analyst

The acquisition of Arnott Industries by MidOcean Partners represents a significant development in the automotive aftermarket sector. Arnott's dominant position with 90% coverage of air-equipped vehicles and 800+ products makes it a valuable asset in MidOcean's growing automotive portfolio. The deal strengthens MidOcean's presence alongside other key holdings like Holley (NYSE: HLLY), creating potential synergies and market advantages.

This acquisition could impact HLLY shareholders as it signals continued private equity interest in the automotive aftermarket space and may affect competitive dynamics. Arnott's focus on air suspension systems complements Holley's performance parts portfolio, though they operate in different market segments. The deal validates the sector's attractiveness and could influence valuations of public companies like Holley.

Market Research Analyst

The automotive aftermarket sector shows strong fundamentals with this deal, particularly in non-discretionary replacement parts. Arnott's leadership in air suspension technology and its established distribution network across North America and Europe indicate robust market demand. The transaction highlights private equity's growing interest in automotive aftermarket businesses, suggesting potential industry consolidation and valuation uplift for sector players.

For investors, this signals continued institutional confidence in aftermarket parts, especially in specialized technical segments. The focus on non-discretionary replacement components provides recession resistance, while the expanding air suspension market offers growth opportunities. This could positively influence market sentiment toward similar publicly-traded companies in the space.

Marks MidOcean’s Fourth Investment in the Auto Aftermarket Space

NEW YORK--(BUSINESS WIRE)-- MidOcean Partners (“MidOcean”), a premier New York-based alternative asset manager specializing in middle-market private equity, structured capital, and alternative credit investments, announced today the acquisition of Arnott Industries (“Arnott” or the “Company”). Arnott is a North American and European leader in suspension technologies and a designer, developer, manufacturer and distributor of air suspension systems and suspension components for the automotive aftermarket. Financial terms of the transaction were not disclosed.

Since its founding in 1989, Arnott has established itself as a global industry leader in engineering and manufacturing quality aftermarket replacement air suspension products and accessories. Arnott offers more than 800 products for light passenger vehicles at original equipment (OE) quality or better and coverage of approximately 90% of the addressable air-equipped vehicles in operation (VIO). Arnott serves a broad customer base, including wholesale distributors, national and local retailers, e-commerce resellers, and jobbers and installers. The Company designs and engineers its mission-critical replacement products in the USA and assembles them at its American and European facilities.

MidOcean identified Arnott as an attractive acquisition target as it looked to add another industry leader to its exceptional portfolio of companies operating in the auto aftermarket space. MidOcean believes Arnott’s high-quality, non-discretionary product offerings, coupled with its leading market position as the #1 air suspension replacement brand, have positioned the Company to exceed underlying market growth. MidOcean will leverage its significant experience in the automotive aftermarket to continue to drive Arnott’s aggressive growth plan through comprehensive organic initiatives and strategic M&A.

Daniel Penn, Managing Director at MidOcean, commented, “Arnott has done a spectacular job cementing its leadership position in air and emerging suspension technologies, developing new and innovative products, and winning new customers. Informed by MidOcean’s deep expertise in the sector, we believe there are numerous opportunities to accelerate the Company’s growth. We look forward to working with Joe and his leadership team to build on Arnott’s success to date for years to come.

“We are pleased to partner with MidOcean as we continue to pave the way in designing and manufacturing innovative suspension technologies for our loyal customers across the auto aftermarket,” said Joe Santangelo, CEO of Arnott. “The deep expertise that MidOcean’s investment team and operating partners have accumulated through a unique combination of investing in and running auto aftermarket businesses sets the firm apart and makes it the ideal partner for us in this next phase of growth. We are excited to engage with and learn from the deep bench of executives and board members that support MidOcean’s existing auto aftermarket investments.”

The acquisition marks MidOcean’s fourth investment in the auto aftermarket industry over the last five years. MidOcean has previously invested in Cloyes, a leading designer, manufacturer and distributor of timing drive systems, accessory drive components, and turbochargers; FullSpeed Automotive, a leading auto aftermarket services platform with over 950 locations; and Holley Inc. (NYSE: HLLY), a leading designer, marketer, and manufacturer of high-performance automotive aftermarket products for car and truck enthusiasts.

Gibson Dunn & Crutcher LLP acted as legal advisor to MidOcean. Piper Sandler & Co served as lead financial advisor to Arnott, with BMO Capital Markets as co-advisor and Baker McKenzie LLP as legal advisor.

About MidOcean Partners

MidOcean Partners is a premier New York-based alternative asset manager specializing in middle-market private equity, structured capital, and alternative credit investments. Since its inception in 2003, MidOcean Private Equity has targeted investments in high-quality middle-market companies in the consumer and business services sectors. MidOcean Credit was launched in 2009 and currently manages a series of alternative credit strategies, collateralized loan obligations (CLOs), and customized separately managed accounts. For more information, please visit: https://www.midoceanpartners.com

View source version on businesswire.com: https://www.businesswire.com/news/home/20241118098265/en/

MidOcean Investor Relations:

Investorrelations@midoceanpartners.com



MidOcean Media:

Amanda Shpiner/Grace Cartwright

Gasthalter & Co.

(212) 257-4170

midocean@gasthalter.com

Source: MidOcean Partners

FAQ

What is the significance of MidOcean Partners' acquisition of Arnott Industries?

The acquisition represents MidOcean's fourth investment in the auto aftermarket space, adding a market leader in suspension technologies to their portfolio. Arnott is the #1 air suspension replacement brand with 90% market coverage.

How many products does Arnott Industries offer in the automotive aftermarket?

Arnott offers more than 800 products for light passenger vehicles at original equipment (OE) quality or better, covering approximately 90% of air-equipped vehicles in operation.

What other automotive aftermarket companies has MidOcean invested in besides Arnott?

MidOcean has previously invested in Cloyes (timing drive systems), FullSpeed Automotive (services platform), and Holley Inc. (NYSE: HLLY) (performance automotive aftermarket products).