In late November, SFW Capital Partners announced its sale of Spectro Scientific to AMETEK for approximately $190 million (see IBO 11/30/18). The specialized private equity firm invests in companies that provide analytical tools and services, with a current roster that includes FILTEC, Keypoint Intelligence and Swiftpage, and prior investments in companies such as AGDATA, Essen BioScience and MD Buyline. The principals of SFW also made successful investments in Mettler-Toledo and Waters.

SFW acquired Spectro in summer 2011, as it was drawn to the company’s growth and development potential, and helped drive its position in the oil and industrial fluid analysis market. Spectro develops instruments, consumables and cloud-based software analytics for machine condition monitoring, with a diverse product line including spectrometers, particle analysis counters, viscometers and turnkey systems.

SFW was instrumental in helping Spectro execute key growth strategies, including new product development and the completion of four acquisitions, as outlined in its press release of the sale. Spectro also revamped its approach to market strategies through targeting new sectors with the support of SFW. “Spectro developed a new channel to reach industrial customers by fostering relationships with representatives that provided vibration monitoring and thermal analysis to industrial processing companies,” said Ahmad Sheikh, partner at SFW Capital Partners. “Spectro also developed a robust marketing function that created insightful content and launched an online learning community. These tools educated new industrial customers on the benefits of real-time oil analysis for predictive maintenance.” With the support of SFW, Spectro expanded its presence in multiple new end-markets, including chemical and industrial processing, power generation, and fleet and transportation, noted Mr. Sheikh.

According to AMETEK, Spectro’s differentiated workflow offerings address a growing market in various industries, such as military and defense, process and transportation, making it a natural match for the electromechanical device giant. “Spectro’s solutions complement AMETEK’s strategy to integrate instrumentation data with cloud-based software and analytics,” said Mr. Sheikh. And for SFW, as Mr. Sheikh indicated, AMETEK’s understanding of the field helped position the company as an appealing potential buyer. “AMETEK differentiated themselves in discussions with management based on their understanding of and keen interest in the power of predictive analytics for maintenance solutions,” he said.

Having already fostered the growth and development of several successful companies within the analytical instrument industry, looking to the future, SFW remains focused on investing in analytical instrumentation, consumables and reagents, and workflow tools companies. “SFW has supported the growth and development of some of the most successful and well-regarded businesses in the analytical tools sector,” said Mr. Sheikh. “[The company] is actively seeking investments in innovative companies serving the biopharmaceutical and diagnostics, materials analysis and other high-technology industries.”

In continuing to foster companies’ development through a comprehensive process that propels growth in their respective markets, SFW is showing no signs of slowing down. “Once SFW makes an investment, it works closely with management teams to implement a range of strategic growth initiatives, including significant investments in product and applications development, an increase in sales and marketing activities, and the pursuit of acquisitions,” Mr. Sheikh explained. “SFW is currently investing out of its $350 million Fund II that has ample capital available to support majority recapitalizations, minority growth investments, corporate carveouts and complete buyouts.”

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