Churchill Asset Management Leads Oversubscribed Co-Investment in Motion & Control Enterprises

Churchill Asset Management, an investment-specialist affiliate of Nuveen, has announced its role as Co-Lead Investor in an oversubscribed secondary market transaction for Motion & Control Enterprises (MCE). MCE is a leading industrial distributor and services provider in the fluid, flow, automation, and air solutions industry. The investment will support MCE's growth initiatives and provide opportunities for further M&A activities.

Frontenac, in partnership with CEO1ST executive Charley Hale, initially acquired MCE in 2018. Since then, Frontenac and Hale have successfully completed 10 acquisitions, resulting in significant growth in EBITDA. The market that MCE operates in is experiencing long-term industry tailwinds and remains highly fragmented, making it an attractive prospect for further expansion.

Nick Lawler, Head of Secondaries at Churchill, expressed his confidence in the investment, stating, "With this continuation vehicle transaction, we are pleased to support Frontenac's ongoing investment in MCE, enabling the acceleration of organic growth initiatives and the pursuit of additional attractive M&A opportunities."

This secondary transaction marks Churchill's fourth direct investment alongside Frontenac, showcasing the strong partnership between the two companies. Churchill has invested in various sectors of Frontenac's portfolio, including middle market senior lending, junior capital, equity co-investments, and secondary capital. Additionally, Churchill is an investor in Frontenac's flagship private equity funds.

Frontenac, a Chicago-based private equity firm, specializes in lower middle market buyout transactions in the consumer, industrial, and services industries. Over the past 50 years, Frontenac has partnered with over 300 owners of mid-sized businesses, helping them navigate complex transition issues. Ron Kuehl, Managing Partner at Frontenac, expressed his satisfaction with the ongoing collaboration with Churchill, emphasizing their reliability and forward-thinking approach.

Churchill launched its Secondaries strategy in 2022, with Nick Lawler leading the initiative. In the past year, Churchill has invested over $300 million in secondary transactions, focusing on the U.S. middle-market. Jason Strife, Head of Junior Capital & Private Equity Solutions at Churchill, highlighted the prospects of continuation vehicle transactions, stating, "These transactions enable sponsors to generate liquidity for existing investors, maintain ownership of top-performing companies, and raise incremental follow-on capital in support of the next phase of growth."

The scarcity of secondary capital available in the market today has resulted in a flight to quality, with top-tier sponsors pursuing continuation vehicles to secure franchise assets. Churchill recognizes the opportunities available in the secondary landscape, particularly in the continuation vehicle segment.

Churchill Asset Management LLC, an affiliate of Nuveen, specializes in providing customized financing solutions to middle market private equity firms and their portfolio companies. With over $46 billion of committed capital, Churchill offers a range of debt and equity solutions, including first lien, unitranche, second lien, and mezzanine debt. The firm has a long history of disciplined investing and employs over 150 professionals across multiple locations.

Frontenac, on the other hand, focuses on lower middle market buyout transactions in the consumer, industrial, and services sectors. Through its CEO1ST approach, Frontenac works with established operating leaders to identify, acquire, and build market-leading companies. With over 50 years of experience, Frontenac has developed a strong franchise working with mid-sized businesses, addressing issues of liquidity, management enhancement, and growth planning.

It is important to note that the information provided in this article is not intended as investment advice or a recommendation. Investors should independently assess the risks associated with specific products or services and make informed decisions based on their individual circumstances.

In conclusion, Churchill Asset Management's co-investment in Motion & Control Enterprises (MCE) through an oversubscribed secondary market transaction highlights the strong partnership between Churchill and Frontenac. This investment will support MCE's growth initiatives and provide opportunities for further expansion in the industrial solutions industry. Churchill's expertise in the secondary market and Frontenac's experience in lower middle market buyouts position both firms for continued success in their respective fields.