Succession Plans
Engineered Controls (“ECI”) is the leading global provider of highly engineered, mission-critical flow control products used in the transportation, delivery, and storage of LPG, LNG, and other cryogenic gases. ECI serves a large global customer base that includes distributors and OEMs in more than 85 countries.
Background
Sentinel acquired ECI from a prominent family who, for several years, was uninvolved in the day-to-day operation of the business. Management, who had run the business for more than 25 years but did not own any equity, was looking for a partner to help transition ECI to its next phase of growth.
Challenge
ECI’s long-term CEO planned to retire during our ownership and wanted to work with us to recruit his successor. Given the long tenure of the senior management team and the CEO’s strong reputation with ECI’s key customers and within the industry, finding the right successor was critical to the success of our investment.
Accomplishments
Worked Collaboratively to Recruit New CEO: Involving ECI’s outgoing CEO and his senior management team was crucial to ensuring that the CEO transition would be smooth and successful.
Following a broad search process, we recruited as CEO an exceptional senior executive with significant experience in both flow control-related products and niche manufacturing. The new CEO, who had the full support of the former CEO and the other senior executives, stepped seamlessly into the business.
Outcome
During Sentinel’s ownership, ECI built a strong foundation for growth, expanded into new markets and geographies, and grew its EBITDA by more than 50%. In December 2013, ECI was sold to another private equity firm in a management buyout, which was highly successful for Sentinel and its management partners, who did not have the opportunity to share in equity appreciation under prior ownership. The smooth and seamless CEO transition was a very important factor in achieving our return objectives.
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