McNally Capital to Sell Advanced Micro Instruments, Inc. to Enpro Inc.

Rhea-AI Summary

McNally Capital and AMI Management Team to Sell Leading Analyzer and Sensor Manufacturer to Enpro CHICAGO. McNally Capital (McNally) has entered into a signed purchase agreement for the sale of Advanced Micro Instruments, Inc. (AMI) to Enpro Inc. (NYSE: NPO). AMI is a leading provider of highly engineered, application-specific analyzers and sensing technologies that monitor critical parameters. The company serves customers in various markets, offers a portfolio of analyzers and proprietary sensing capabilities, and has experienced meaningful growth through its partnership with McNally Capital. The transaction is expected to close in early 2024.

Insights

Financial Analyst

The acquisition of Advanced Micro Instruments, Inc. by Enpro Inc. represents a strategic consolidation in the industrial analyzer and sensor market, which is expected to have a positive impact on Enpro's financial performance and market positioning. The transaction aligns with Enpro's portfolio expansion strategy, potentially leading to enhanced revenue streams and diversification of product offerings. The acquirer's stock market performance could see an uptrend if investors perceive the acquisition as accretive to earnings and synergistic in terms of technology and market reach.

From a valuation perspective, the deal's financial terms, although not disclosed, will be scrutinized for their impact on Enpro's balance sheet and earnings per share. Given that AMI operates with a customer base in emerging sectors like clean energy and biogas, the acquisition could position Enpro favorably in high-growth markets, assuming successful integration. The market will also closely monitor the transaction's effect on Enpro's operating margins and return on invested capital, key metrics for assessing the financial health and efficiency of the company post-acquisition.

Market Research Analyst

The sale of AMI to Enpro underscores a trend in the industrial sector where companies are seeking to bolster their capabilities in application-specific technologies. AMI's strong foothold in the midstream natural gas and biogas markets, coupled with its proprietary sensing technologies, positions Enpro to capitalize on the growing demand for infrastructure integrity and process efficiency solutions. This demand is partly driven by regulatory pressures and the global push towards sustainability and CO2 emission reductions.

By acquiring AMI, Enpro may gain a competitive edge through advanced sensing technologies that are critical for monitoring and improving environmental performance. The market's response to this acquisition will depend on how effectively Enpro can leverage AMI's technology to capture market share in these niche segments. Furthermore, the integration of AMI's product portfolio could provide cross-selling opportunities to Enpro's existing customer base, potentially leading to increased market penetration and customer retention.

Environmental, Social and Governance (ESG) Analyst

Enpro's acquisition of AMI can be viewed through the lens of Environmental, Social and Governance (ESG) criteria, which are becoming increasingly important to investors. AMI's products contribute to environmental stewardship by enabling operators to monitor and reduce harmful emissions, a factor that aligns with Enpro's ESG objectives. The transaction could enhance Enpro's ESG profile, potentially attracting ESG-focused investors and improving its standing in sustainability rankings.

Long-term implications for stakeholders include the potential for Enpro to drive innovation in clean energy transition technologies, which could lead to a stronger market position and brand reputation. However, the success of such ESG initiatives will depend on the effective integration of AMI's technologies and the continued development of products that meet stringent environmental standards. Stakeholders will also be interested in the governance aspect of the transaction, particularly how Enpro manages the integration process and whether it upholds the values and operational excellence that AMI has established.

McNally Capital and AMI Management Team to Sell Leading Analyzer and Sensor Manufacturer to Enpro

CHICAGO--(BUSINESS WIRE)-- McNally Capital (“McNally”), a private equity firm, is pleased to announce the firm has entered into a signed purchase agreement for the sale of Advanced Micro Instruments, Inc. (“AMI” or the “Company”) to Enpro Inc. (NYSE: NPO). AMI is a leading provider of highly engineered, application-specific analyzers and sensing technologies that monitor critical parameters to maintain infrastructure integrity, enable process efficiency, enhance safety, and facilitate the clean energy transition.

Based in Costa Mesa, California, AMI serves customers in the midstream natural gas, biogas, industrial processing, cryogenics, food processing, laboratory, wastewater, and aerospace markets. The company offers a portfolio of oxygen, hydrogen sulfide, and moisture analyzers and proprietary sensing capabilities that detect contaminants in a variety of processes, including natural gas and biogas streams, which enable operators to avoid flaring and, thereby, reduce CO₂ emissions. McNally invested in AMI in partnership with the company’s founder, Steven Kirchnavy, in 2014. The investment stemmed from McNally’s focus on the industrial products and services industry. It was consistent with the firm’s strategy of partnering with founders and management owners to promote the continued success and expansion of privately-held businesses.

“Under McNally’s stewardship, AMI has strengthened in all facets. From facilitating revolutionary product development and organic growth to diversifying our client and distribution base with widespread industry adoption of AMI’s products, they have driven tremendous value creation for the Company,” said AMI founder and former President and CEO, Steven Kirchnavy.

Adam Lerner, Partner of McNally Capital, stated, “The sale of AMI highlights the merits and strength of McNally Capital’s value creation process, directly impacting our investors and management teams throughout a full transaction lifecycle. It is also a testament to our differentiated investment strategy of successfully bringing industry expertise to founder-owned businesses to not only support but greatly enhance their growth journey. We are proud to have worked with such a highly accomplished team in providing a solutions-focused approach to accelerate the business.”

“AMI has experienced meaningful growth through our partnership with McNally Capital, further establishing us as industry leaders. We look forward to continuing our growth trajectory by joining the Enpro family,” said Kevin Bates, President and CEO of AMI. “We are grateful for the strong positioning McNally has strategically fostered for the Company, and this is an exciting next chapter for AMI.”

McNally Capital makes thesis-driven investments in the U.S. and targets founder- and management-owned companies. The firm leverages a deep bench of industry partners who provide incremental industry and operating knowledge and expertise. McNally focuses on investing in lower middle-market businesses with $5 million to $20 million in EBITDA in the Aerospace & Defense/National Security, Industrial Products & Services, and Business Services industries. The firm is currently investing out of its committed buyout fund, McNally Capital Fund II, LP.

The transaction is expected to close in early 2024, subject to limited closing conditions, including regulatory approvals.

William Blair served as the sell-side advisor to AMI. Ropes & Gray LLP served as legal counsel supporting the transaction on behalf of the sellers.

About McNally Capital

McNally Capital is a lower middle-market private equity firm targeting thesis-driven investments in the U.S., specifically focused on acquiring founder and management-owned companies. Formed by the McNally family, who owned and operated Rand McNally & Company, McNally Capital is dedicated to upholding a 160+ year legacy as a family-owned and operated company. We look for businesses where we believe we can apply our hands-on experience, institutional capabilities, and proprietary value creation framework to benefit management teams in their next phase of growth and build value for our investors. For more information, please visit www.mcnallycapital.com.

About Advanced Micro Instruments, Inc.

AMI is a majority-owned portfolio company of McNally Capital, LLC, a Chicago-based private equity firm. AMI is a leading provider of highly engineered, application-specific analyzers and sensing technologies. Based in Costa Mesa, California, AMI serves customers in the midstream natural gas, biogas, industrial processing, cryogenics, food processing, laboratory, wastewater, and aerospace markets. The company offers a portfolio of oxygen, hydrogen sulfide, and moisture analyzers and proprietary sensing capabilities that detect contaminants in a variety of processes, including natural gas and biogas streams, which enable operators to avoid flaring and, thereby, reduce CO₂ emissions. For more information, please visit www.amio2.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240103743480/en/

Nicole M. Henderson, Head of Fundraising & Investor Relations

(312) 757-5158

nhenderson@mcnallycapital.com

Tyler Ashley, Head of Business Development

(312) 767-2511

tashley@mcnallycapital.com

Source: McNally Capital

FAQ

Who is selling Advanced Micro Instruments, Inc. to Enpro Inc.?

McNally Capital is selling Advanced Micro Instruments, Inc. to Enpro Inc.

What is the ticker symbol for Enpro Inc.?

The ticker symbol for Enpro Inc. is NPO.

What type of products does Advanced Micro Instruments, Inc. offer?

Advanced Micro Instruments, Inc. offers a portfolio of oxygen, hydrogen sulfide, and moisture analyzers and proprietary sensing capabilities.

When is the transaction expected to close?

The transaction is expected to close in early 2024.

What industries does McNally Capital focus on for investments?

McNally Capital focuses on investing in lower middle-market businesses in the Aerospace & Defense/National Security, Industrial Products & Services, and Business Services industries.