Corporate Carveouts

At the time of our investment, IEP consisted of three legacy brands— Fenwal, Kidde, and Incom—which have been sold in the U.S. and Europe since the 1950s. These brands comprised five separate businesses owned by United Technologies Corp. (“UTC”) that had not been integrated into one unified company. UTC decided to divest IEP as a noncore asset, but IEP could not stand alone as a business; it relied on UTC for its operations, finance, IT, insurance, and benefits and operated out of UTC facilities in the U.S., Germany, and the U.K. Also, as part of the transaction, UTC planned to retain the Fenwal and Kidde brands, which meant that a new brand would be needed.

UTC needed a buyer that could create a standalone business from the assets it was selling. Importantly, all of this needed to be accomplished without disrupting IEP and its global customer base. UTC hired a boutique investment bank with which Sentinel has a strong relationship to advise it on the transaction. UTC ultimately selected Sentinel based on (i) our proven record of closing complex carveout transactions and willingness to take on the challenges of making IEP a standalone business; and (ii) the fact that we were management’s preferred partner.

• To acquire the global leader in a growing industrial niche with a favorable outlook, driven by increasing regulation and stronger enforcement
• To invest in a platform with a long history of profitability, a high return on invested capital, and attractive free cash flow
• To partner with IEP’s committed and highly experienced senior management team, who now had the opportunity to run a standalone business

Smooth Transition to a Fully Standalone Business: Within nine months of the closing, working closely with management, we recruited a talented CFO, promoted a highly experienced manager from the U.K. as head of European operations, introduced the new global “IEP Technologies” brand, relocated to new facilities in three countries, and implemented a new worldwide IT system, all with minimal disruption to IEP’s business.

Positioned the Business for Growth: After the carveout, Sentinel helped IEP’s management develop its first consolidated strategic growth plan. The new strategy included (i) strategic add-ons, (ii) expansion into new product lines, (iii) penetration of emerging growth markets, and (iv) innovative outbound, demand-generation marketing campaigns.

Following a successful transition to a standalone business, and having positioned the business for its next stage of growth, IEP was sold in 2015 to HOERBIGER Group, a leading European provider of compression technology, drive technology, and hydraulics, in a highly successful transaction for both Sentinel and IEP’s management team.