Following a thematic multi-year search in the North American transformer industry, OpenGate identified Power Partners as a prime acquisition candidate. Over the course of a two-year period, OpenGate engaged in proactive dialogue with the private owners of PPI, who had carved the business out of the industrial group ABB in 2003. OpenGate ultimately completed the acquisition in 2016 in a direct transaction and outside of a formal process.
Market-leading position in a steady replacement market
50+ year relationships with blue chip North American industrial companies
Underperforming margin profile relative to peers
Previous owners had not fully completed the carve-out of the sales function from ABB (limiting growth and strategic buyer interest)
Replaced senior leadership and promoted talented individuals from within
Rationalized high-complexity / low-margin SKUs
Set up working capital lines for financing business activity to promote future growth
Overhauled manufacturing footprint to improve daily unit production rates and optimized sourcing function
Invested in product redesign to improve quality and reduce costs
Launched new pad-mount product that doubled the company’s addressable market within its existing customer base
Completed carve-out of sales function from ABB, creating a fully standalone company that was more attractive to strategic buyers
Achieved a 3x increase in EBITDA performance
Under OpenGate’s operational oversight, major improvements were made to all aspects of PPI’s operations including sourcing, product design, manufacturing, and sales and marketing efforts, all of which led to a threefold increase in the company’s EBITDA in nearly four years. Power Partners was ultimately sold to a strategic acquirer, Pioneer Transformers, through a competitive sale process.