First Reserve Corp. has acquired Ameriforge Group, a Houston-based manufacturing firm serving the energy, power generation, aerospace and industrial markets.
Ameriforge CEO Gean B. Stalcup said the move would allow the company to grow and predicted its subsea business will be among the beneficiaries.
“We see that market has got a very strong run for many years to come, and the Ameriforge Group is going to be able to participate and accelerate in that market,” Stalcup said.
Founded in 1985, Ameriforge was acquired by Tanglewood Investments in 1999 and currently has 29 manufacturing facilities, including 12 in the greater Houston area, along with two research and development centers and two distribution centers, Stalcup said.
He and the rest of the management team will retain an equity stake in the company. Tanglewood managing director Michael Tiner and his partners also will retain an equity interest.
The companies declined to provide financial terms of the transaction, announced Tuesday. Stalcup said the objective under Tanglewood’s stewardship had been “to create a billion dollar enterprise and the associated job opportunities that are possible with such significant growth. … We knew that upon achieving that milestone it would become necessary to partner with a major equity sponsor for Ameriforge to achieve its full growth potential.”
The deal is expected to close in December.
Stalcup said he considered going public to raise the needed capital.
He and Jeff Quake, managing director of First Reserve, said that is still a possibility in the future.
“We view this as an investment, helping them to grow,” Quake said.
Ameriforge has 2,300 employees, including about 1,100 in the greater Houston area. Stalcup said all will keep their jobs and predicted employment will grow.
First Reserve is a global private equity firm focused on energy with four offices worldwide, including one in Houston. Quake said it has raised $23 billion in capital since it was founded in 1983.
Quake said Ameriforge’s subsea and unconventional onshore oil businesses were both attractive to First Reserve, which will use its global network to help the company build its international reach.
Tiner said he does not expect the company’s direction to change.
“The strategy of the company and where it is headed is exactly where we would have taken it if we could have by ourselves,” he said. “But we couldn’t. What the company needed was a new, larger financial sponsor. … It’s all about propelling us to where we were headed anyway.”