Stellus Capital Management, LLC Provides Unitranche Financing in Support of Summit Park’s Acquisition of Michelli Weighing & Measurement

Rhea-AI Summary

Stellus Capital Management, LLC (SCM) provided senior debt financing and equity co-investment in support of Summit Park’s acquisition of Michelli Weighing & Measurement, a leading provider of test and measurement services and equipment. Michelli, founded in 1947 and headquartered in New Orleans, LA, operates 30 locations across 11 U.S. states, serving over 6,000 customers in various end markets. Summit Park plans to expand Michelli's service offering and capitalize on growth opportunities within the industrial weighing and precision measurement markets.

Insights

Market Research Analyst

The acquisition of Michelli Weighing & Measurement by Summit Park, with financing from Stellus Capital Management, indicates a strategic move within the calibration services and equipment sector. It is essential to analyze the market dynamics that make this acquisition noteworthy. The industrial weighing and precision measurement markets are crucial for various industries, including manufacturing, logistics and healthcare, where accuracy and regulatory compliance are paramount.

Given Michelli's extensive operational footprint across multiple U.S. states and its diversified client base, the acquisition could signify an increase in market share for Summit Park's portfolio. This expansion can potentially lead to economies of scale, improved bargaining power with suppliers and a broader service offering. The long-term growth prospects mentioned by Gavin Roseman suggest that the market for calibration services is experiencing favorable tailwinds, possibly due to increasing regulatory demands and technological advancements in measurement equipment.

Financial Analyst

From a financial perspective, the involvement of senior debt financing in the transaction is indicative of a leveraged buyout, which is a common strategy in private equity acquisitions. The equity co-investment by Stellus may align their interests with those of Summit Park, potentially leading to more aggressive growth strategies such as further acquisitions or expanding service offerings.

Investors and stakeholders should closely monitor Michelli's post-acquisition performance, focusing on the company's ability to integrate new operations and realize synergies. The success of the acquisition could be reflected in improved financial metrics such as revenue growth, margin expansion and return on investment. However, the additional debt taken on to finance the acquisition could also increase financial risk if the anticipated growth does not materialize.

Industrial Analyst

From an industry standpoint, the acquisition of Michelli highlights the growing importance of precision in industrial processes and the increasing demand for calibration services. The reference to 'ever-changing regulatory environment' by Andrew Gilbert underscores the need for companies to stay compliant with industry standards, which can be a driving force for the calibration services market.

Michelli's position as a 'best-in-class' provider suggests that it has a competitive edge in terms of service quality and technical expertise. The company's strategy to grow through greenfield and acquisition opportunities, as mentioned by Gavin Roseman, could indicate a consolidation trend within the industry, leading to fewer, but larger, players dominating the market. This consolidation could affect competition and pricing strategies, potentially benefiting customers through improved service quality and innovation.

HOUSTON--(BUSINESS WIRE)-- Stellus Capital Management, LLC (“Stellus”) announced today that its affiliates provided senior debt financing and an equity co-investment in support of Summit Park’s acquisition of Michelli Weighing & Measurement (“Michelli” or the “Company”), a leading provider of test and measurement services and equipment.

Founded in 1947 and headquartered in New Orleans, LA, Michelli is a best-in-class provider of calibration, maintenance, inspection, repair, and installation services and product sales & rentals for heavy and medium-capacity scales, precision measurement devices, and calibration equipment. The Company operates out of 30 locations located across 11 U.S. states throughout the Southeast, Texas, and the West Coast. Michelli’s skilled field-technicians and lab-based metrologists provide re-occurring service to over 6,000 customers within a wide variety of end markets, enabling them to meet their goals of accuracy, quality, and safety while complying with an ever-changing regulatory environment.

Andrew Gilbert, Partner at Summit Park, said, “Michelli has built a leading brand within the calibration services market and we are excited to partner with the entire Michelli team to continue to support the Company and to capitalize on significant growth opportunities within both the industrial weighing and precision measurement markets.” He added, “We appreciate the support and partnership provided by Stellus throughout the transaction process and we look forward to working together to accelerate Michelli’s growth.”

“We are thrilled to partner with Summit Park to support the Michelli acquisition and the team’s strategy to expand the Company’s service offering and grow through greenfield and acquisition opportunities,” said Gavin Roseman, Managing Director at Stellus, adding, “Summit Park’s investment experience within the sector coupled with the Company’s strong foundation and favorable industry tailwinds position Michelli for long-term growth.”

About Stellus Capital

Stellus Capital Management (“Stellus”) is one of the longest tenured direct lenders specializing in senior secured loans in the lower middle market. Formed within the D.E. Shaw Group in 2004, Stellus spun out in 2012 and today manages $2.8 billion across various investment vehicles including closed-end institutional funds, a public BDC (NYSE: SCM), and a perpetual non-traded private BDC. Stellus is a single strategy firm and its founding partners have been investing together in the lower middle market for 19+ years with a track record of over $8.7 billion deployed in over 350 transactions. Stellus is headquartered in Houston, TX with offices in the Washington D.C. area and Charlotte, NC. Learn more at stelluscapital.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240109912949/en/

Sarah Bowes

860-805-1759

Sarah.bowes@backbaycommunications.com

Source: Stellus Capital Management, LLC

FAQ

What type of financing did Stellus Capital Management provide for Summit Park’s acquisition of Michelli Weighing & Measurement?

Stellus Capital Management provided senior debt financing and an equity co-investment in support of Summit Park’s acquisition of Michelli Weighing & Measurement.

What services and equipment does Michelli Weighing & Measurement provide?

Michelli Weighing & Measurement provides calibration, maintenance, inspection, repair, and installation services and product sales & rentals for heavy and medium-capacity scales, precision measurement devices, and calibration equipment.

Where is Michelli Weighing & Measurement headquartered?

Michelli Weighing & Measurement is headquartered in New Orleans, LA.

How many locations does Michelli Weighing & Measurement operate?

Michelli Weighing & Measurement operates 30 locations across 11 U.S. states.

What are Summit Park's plans for Michelli Weighing & Measurement?

Summit Park plans to expand Michelli's service offering and capitalize on growth opportunities within the industrial weighing and precision measurement markets.