Commercial Heat Treating Discovered?
Our news item of earlier this week about California Brazing being acquired by an equity firm shows a trend which we have been seeing for some time now and which appears to be accelerating-namely equity firms investing in the commercial heat treating industry (this is the original news item; “Trive Capital Partners Acquires California Brazing. Well we now have our first acquisition in the North American commercial heat treating industry for 2019. An equity firm by the name of Trive Capital just announced that they have acquired California Brazing with two locations, California Brazing in Newark, CA and Nevada Heat Treating, located in Carson City Nevada.”). Going back about 5 years we at “The Monty” found that with increased regularity we were being approached (and undoubtedly many others) by private equity firms looking for information about the commercial heat treating industry in North America and for that matter the world. The reasons are obvious, commercial heat treating can be a very profitable business if done correctly and equity firms over the past few years have become more and more aggressive about improved returns. The result is that over the past few years a number of commercial heat treaters have either been outright acquired or accepted investments from equity firms. A few names that come to mind are Nitrex Inc., Premier Thermal, Bluewater Thermal, California Brazing, Alfe Heat Treating Inc., Diamond Heat Treat, P&L, Certified Heat Treat, Hudapack, Commercial Steel Treating Corp., and Applied Process. Is this trend good bad or indifferent-it really depends upon the equity firm and their objectives. Will this continue-we would say yes but it is becoming more difficult as there becomes fewer and fewer good profitable companies interested in selling. Our conclusion? We wish we had a heat treat for sale. (by the way for a list of the largest commercial heat treaters in North America https://themonty.com/largest-commercial-heat-treaters-in-north-america-october-2018/ )