Pioneer Power Solutions Inc., a Fort Lee-based maker of electrical transmission and distribution equipment, has agreed to sell its liquid filled and dry type transformer businesses to a private equity firm for $65.5 million.
The deal with Mill Point Capital, which is funding the transaction with $60.5 million in cash and a $5 million note, will see Pioneer Transformers Ltd. and Pioneer Dry Type Transformer Group — including Jefferson Electric Inc., Bemag Tranformer Inc. and Harmonics Ltd. LLC — taken over by the middle-market firm.
“Our belief that our assets were worth more individually than the market valuation of our combined organization is validated by this transaction, wherein we will divest a portion of our business for approximately 1.5x our current market capitalization, while retaining two exciting businesses and our status as a publicly traded Nasdaq listed company,” Chairman and CEO Nathan Mazurek said in a prepared statement. “Following the closing of this transaction, we plan to focus on streamlining and enhancing our Titan business in Minneapolis and our switchgear business in Los Angeles.”
Pioneer will retain its Pioneer Critical Power and Pioneer Custom Electrical Products units, along with shares and warrants in CleanSpark Inc.
The transaction is expected to close in the second half of the year, pending customary approvals and conditions.
Lincoln International acted as exclusive financial adviser to Pioneer.