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Company Overview
TESCO – The Eastern Specialty Company and affiliates (“TESCO”) is a leading manufacturer of electric meter testing equipment and related products and services which are sold to electric utilities throughout the U.S. and internationally. Equipment and services provided by TESCO fill a critical need among its end users to ensure that power is being accurately transmitted, monitored, measured and billed, and has experienced growing demand as smart grid technology continues to advance and utilities continue to invest in infrastructure upgrades. TESCO is a privately-held business headquartered in Bristol, PA, with additional operations in Emeryville, CA, Montreal, CN, and the Philippines.
Situation
After several years of strategic transformation, including domestic and international acquisitions, TESCO’s electric metering business had significantly outgrown its original line of business which provides unrelated engineering services to third-party manufacturers. In order to simultaneously accomplish the strategic and personal goals of the Company’s two equal owners while also better positioning both businesses operationally, the Company elected to purchase one owner’s equity in TESCO and to spin out the legacy business unit to this departing shareholder. In addition, the Company had negotiated and entered into a Letter of Intent to make a strategic acquisition of Dial Machine Co. which would allow for a significant expansion of in-house manufacturing capabilities. TESCO also sought to inject additional growth and working capital into the remaining business and refinance its existing credit facilities. Given the complexities of funding these various strategic initiatives, the Company was unable to source financing on its own.
Solution
Griffin was engaged by TESCO to (i) design a leveraged recapitalization plan that achieved all of these goals, and (ii) raise the institutional capital required to finance the recapitalization. Griffin managed a competitive capital raise process, which ultimately resulted in new debt facilities being provided by the Philadelphia office of TriState Capital Bank (“TriState”) and Energy Impact Partners (“EIP”) in a transaction that closed in May 2020. TriState is a Pittsburgh-based commercial bank which provided a revolving credit facility, and EIP, a global investment platform leading the energy transition, provided a term loan facility through its credit fund. EIP’s investor coalition includes the world’s most forward-looking utilities and operating companies making for a strong strategic fit with TESCO.
For more information on this transaction, contact John A. Lee, Senior Managing Director, at 610.205.6106 or Thomas Hill, Senior Vice President, at 610.478.2034. For more information on Griffin’s services in general, contact any one of our investment banking professionals.
