Private Equity Getting Busier in the Midwest

Harbour Group has agreed to sell Lincoln Industrial to SKF Group for $1 billion in cash. Lincoln manufactures lubrication systems, tools and equipment and is projecting nearly $400 million in sales for this year. Harbour acquired its stake in the company through a 2005 LBO from a group of investors that included The Jordan Company, JZ Capital Partners and TCW/Crescent Mezzanine.

So far in 2010, PE investors have completed 177 investments in and 70 exits from companies headquartered in the Midwest, according to the PitchBook Platform. This is a marked improvement over 2009. By this time last year, only 155 investment deals had been completed, and 2010 has already far exceeded 2009's total exit count of 49. This year, PE investors have seized more investment opportunities in B2B Products and Services (68 deals) than in any other industry, and of the 147 PE investors who have invested in the region this year, the most active include Wind Point Partners (7 deals) and The Blackstone Group (6). Meanwhile, secondary transactions have increased significantly in popularity. Last year, PE investors completed only 7 sales to other PE investors. However, this year, 31 exits have already been completed using this method, representing 44.3% of the Midwest's exit activity in 2010 and a jump of 30 percentage points from 2009.