Mitternight Boilerworks, Inc.

Sale to Stonebrook Capital Partners, LLC.


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Project Description

The Transaction:
Carr, Riggs & Ingram Capital Advisors, LLC (CRI) acted as the sole investment banking advisor to the executives and owners of Mitternight Boilerworks, Inc. (“Mitternight” or the “Company”) in the sale of 100% of the ownership interest in the Company, partially held within an ESOP, to Stonebrook Capital Partners, LLC (“Stonebrook”).

The Company:
Founded in 1927 as a boiler repair shop in Mobile, AL, Mitternight Boilerworks, Inc. evolved to become a highly-reputable manufacturer of ASME Code vessels. The Company produces heat exchangers, chemical reactors, distillation columns and similar pressure vessels for leading Fortune 500. Mitternight customers include the most notable petroleum and petro-chemical companies in the world and vessels fabricated by the Company have been installed at large-scale facilities throughout the world.

The majority of the ownership interest in the Company was held within an Employee Stock Ownership Plan. The remainder of the ownership interest was held by various members of the founder’s family, having retained or received shares over the course of the Company’s existence. As a highly-specialized fabrication company, many of Mitternight’s skilled production employees are members of the boilermakers employee union, requiring delicate navigation of employee-management relations.

The Objectives:
Mitternight family member shareholders wished to achieve a liquidity event for their relatively illiquid shares in the Company, while employee-owners wished to diversify their ownership positions and align the Company for more aggressive sales growth. As a primarily ESOP-owned company, extreme focus was placed on identifying an acquirer that would offer an appropriate valuation as well as a fair and equitable transaction structure that would pass the rigorous tests of an ESOP trustee. Key considerations included:

Valuation, deal terms and structure that would achieve the owner’s liquidity goals, prompt a positive fairness opinion and gain approval from an appointed ESOP Trustee

Alignment with financial and business partners committed to the continued growth of the Company

Proper treatment and preservation of the long-standing relationship between the Company and the boilermakers employee union

Navigation of the complex process involved in unwinding an ESOP and converting the Company to an investor-owned entity

The Outcome:
Carr, Riggs & Ingram Capital Advisors, LLC was engaged by the executives of the Company to offer Mitternight Boilerworks, Inc. for sale to an acquirer that could provide the liquidity, terms and structure deemed to be in the best interest of the numerous shareholders in the Company. An exhaustive search was conducted and multiple offers from prospective strategic and financial acquirers were considered. Stonebrook Capital Partners, LLC presented the most attractive scenario. Solid valuation, coupled with its commitment to preservation of the Mitternight legacy, employee retention and continued growth of the Company made Stonebrook an acquirer that met the numerous and complex requirements for the sale of the Company.