Montage scores Small-Cap North America Deal of the Year; Advent’s Tricia Glynn previews NEXUS 2025 Fireside Chat

Hello, PE Hubsters! Rafael Canton here on Wednesday with the US edition of the Wire from the New York newsroom.

First, we’re going on a deep dive into the winner of PE Hub’s Small-Cap Deal of the Year in North America this morning – congratulations to Montage Partners. We announced all of the winners on Monday – Details on the winning deals can be found here.

Next, PEI Group’s NEXUS Summit is rapidly approaching. Among the featured speakers is Tricia Glynn, a managing partner at Advent International. As a sample ahead of NEXUS, we have a conversation with Glynn about Advent’s investing strategy in the consumer sector and more.

Finally, let’s take a look at a deal that stood out this morning. PX3 Partners-backed Cleanova is acquiring Micronics Engineered Filtration Group.

All organic

Data centers have become a major trend in PE dealmaking over the last several years. The interest in data centers played a part in Montage Partners’ deal to sell Southwest Data Products to steel maker Nucor for $115 million in 2024. Montage’s deal earned PE Hub’s Small-Cap North America Award Deal of the Year Award after booking a net MOIC of 11.5x.

SWDP makes data center accessories such as airflow containment systems for energy optimization, server enclosures like cabinets and racks, cable management structures, and physical security caging. Cloud computing and the rise of AI have led users to move from on-premise, physical IT infrastructures to cloud infrastructure. That increased interest in data centers has trickled down to companies like SWDP, founded in 1986 by Martin Ament.

Despite the obvious sector interest, Montage also played a part in growing SWDP. The investment’s growth was all organic.  The firm utilized two main strategies. First, SWDP launched an airflow containment line of products. Second, it set up an installation division that it said was a differentiator, leaving less responsibility for customers and shorter wait times. SWDP’s revenue grew 5x through Montage’s hold, while EBITDA expanded by 7x.

“It’s no small undertaking,” Jordan Tate, Montage co-managing partner, told PE Hub. “It required significant ramp-up in headcount and is in a lot of ways a different business than what manufacturing is. But it was well received by customers to have a single point of responsibility.”

Another driver of growth was that SWDP manufactures its own branded products with a high degree of customization. Montage also helped the company build a management team around Ament to help SWDP as it scaled up. SWDP expanded its number of team members by 80 percent over the hold period.

Read on for the rest of the story to see Montage’s strategy when it comes to hold periods with investments and how the firm valued finding the right home for SWDP to continue on its path of growth.

Lasting power

With PEI Group’s NEXUS 2025 summit rapidly approaching next week, let’s get a feel for what the conversations will be like throughout the conference. Among the featured speakers is Tricia Glynn, a managing partner at Advent International. She advises on buyouts and growth equity investments in the consumer sector. Glynn joined Advent in 2016 and is based at the firm’s Boston headquarters. PE Hub and Buyouts named Glynn to our Women in PE list in 2024.

At NEXUS, Glynn will take the stage with PE Hub editor-in-chief Mary Kathleen (MK) Flynn to discuss investing in the consumer sector and more. MK and Glynn spoke recently. To get a preview of their talk at NEXUS, here’s a sample of their conversation:

What’s Advent’s approach to investing in the consumer sector?

Consumer is a sector we’ve been investing in almost as long as we’ve been around, and the firm turned 40 years old last year. It’s been a productive sector for a long time, and really well aligned to our investment mandate.

We are looking to buy businesses where we can drive growth, whether that’s through transforming businesses that maybe are held by conglomerates right now and should be carved out and refocused, or it’s by backing growth companies that perhaps are owned by a founder and are still earlier in their trajectory where we can help provide scaffolding around a high-growth company to help them look around corners.

And we see those deal types around the globe in the sector. It’s a particularly fun business to be in when you’re working with a founder who feels so deeply about the product that they created and our diligence shows that consumers believe there’s a great product market fit. It’s still difficult to build a big global brand, but that is always our goal – to build brands that are going to last decades.

Which consumer subsectors are ripe for dealmaking these days?

Food and beverage is one of our core investment areas. We just completed the Sauer Brands deal. It’s an investment in the condiments and spices market in the US, which is one of the highest growth scaled segments of food. And it’s a great example of an Advent deal.

We had invested in Sovos Brands in 2016. That was a platform investment under the CEO Todd Lachman that invested most notably in Rao’s premium pasta sauce. It made other acquisitions and ultimately became a public company, and then the public company was sold to Campbell’s in March 2024.

Sauer Brands is one of many food brands we looked at last year in partnership with Todd. And Todd is now the chair of the board of directors of Sauer Brands.

It’s a great platform of assets already, and we’ll look to both do more M&A over time, but also it’s a great profitable core business where the brands have tremendous growth ahead of them. In some cases, they’re more regional in nature today, and they have potential to be national. And in other cases, there’s just good go-to-market sales and marketing investment that these brands will benefit from.

Read on for Glynn’s insights on luxury wellness and how Advent views DE&I now.

Glynn will be a featured speaker at PEI Group’s upcoming NEXUS 2025 conference in Orlando, March 10-12. For more of what to expect at NEXUS 2025, check out our conversation with Thoma Bravo’s Orlando Bravo about investing in tech companies.

You can find more interviews with thought leaders who are speaking at NEXUS 2025 here.

Proper filtration

Finally, we’ll take a look at a deal announced today that caught my eye: PX3 Partners-backed Cleanova is acquiring Micronics Engineered Filtration Group. Headquartered in Killarney, Ireland, Cleanova is a clean-tech manufacturer of consumable, mission-critical, and engineered industrial filtration systems. Based in Chattanooga, Tennessee, Micronics is a manufacturer of filter media and industrial filtration systems.

As part of the deal, the combined company will retain Cleanova as its name and move its headquarters to Chattanooga. Chris Cummins, CEO of Micronics, will assume the role of CEO of the enlarged Cleanova business. The deal is expected to close in the second quarter of this year. The combined company has enterprise value of $1.3 billion according to a statement.

In a collective statement, PX3’s managing partners said the transaction “significantly accelerates the industrial transformation we envisioned from the outset, establishing an independent global leader in filtration. We look forward to continuing to support Cleanova in the execution of its strategy, delivering value to its customers and shareholders.”

If you have any questions, thoughts, or want to chat about deals in the tech, consumer or sports sectors, please email me at [email protected]

Tomorrow, Nina Lindholm will be with you for the Europe edition of the Wire and Michael Schoeck will bring you the US edition.

Cheers,

Rafael