By Andy Serbe
July 10, 2019
ClockSpring|NRI, a Houston-based manufacturer of infrastructure maintenance products, aims to expand its product pipeline through acquisitions, according to CEO Matt Boucher.
“We are in the market for manufacturers of innovative technology for the repair and rehabilitation of infrastructure,” Boucher said in a phone interview.
Electrical grid repair is one sector the company might shop around in, along with water infrastructure where it already has a strong presence, he said. Product lines will be the main motivator for any deals rather than geographic expansion, the CEO said, since ClockSpring has sold its products in more than 70 countries.
Ideally, the company would like to make one to three acquisitions in the next 12 months or so, Boucher said. He declined to estimate the value of possible deals by numbers; however, he provided a range based on prior ClockSpring acquisitions whose terms were undisclosed.
At the higher end, he pointed to its July 2018 purchase of Elk Grove, Illinois-based Advanced Valve Technologies. He also indicated the price Chicago-based private equity firm Wind Point Partners paid for Clock Spring Company and Riviera Beach, Florida-based Neptune Research in January would be representative of the larger-sized deals the company could seek. Wind Point merged those two firms to create ClockSpring|NRI.
Although details of this year’s Neptune and Clock Spring transactions went undisclosed, Wind Point typically invests USD 50m to USD 100m in companies with a minimum EBITDA of USD 10m, according to Mergermarket data.
At the lower end of the company’s spectrum of potential deal sizes, Boucher pointed to the company’s first and only bolt-on this year, Milliken Infrastructure Solutions, a division of Spartanburg, South Carolina-based Milliken & Company. The deal closed on 16 June. Terms were not disclosed, but Boucher said it “traded on EBITDA” and was paid in cash.
He added that the company has no deals in its pipeline right now, and the size of any potential deal would govern how many more it would make in the immediate term.
Prior to the merger, Boucher became CEO of Clock Spring Company in June 2016 to revitalize the company with acquisition-fueled growth. In February 2018, Boucher told this news service the company saw 40% top-line growth in 2017 and quintupled its profits. He also said that revenues were north of USD 20m at that time.
Boucher declined to give an updated revenue estimate but noted that its number of employees has grown from 65 in February 2018 to more than 250 now.
ClockSpring has long provided maintenance solutions, such as composite repair sleeves that provide an alternative to welding steel on damaged pipes.
One of the flagship products that drew it to Milliken is “concrete cloth,” a ber-cement product that comes on rolls and solidifies into concrete when wetted for use in erosion control or in culvert pipes. “We think there is a large need to reinforce critical infrastructure, and there are a number of solutions or technologies out there for that,” Boucher said.
Kirkland & Ellis has provided legal counsel for Wind Point and ClockSpring|NRI, according to the company. KPMG has acted as a financial advisor for both as well.