The Transaction

The Principals of Founders Investment Banking served as exclusive financial adviser to Enovation Controls in its divestiture of its Power Controls (PC) and Vehicle Technologies (VT) lines of business to Sun Hydraulics Corporation (NASDAQ: SNHY). Enovation Controls and Sun Hydraulics closed the transaction on December 5, 2016.



The Company

Enovation Controls operates in the engine and equipment protection and monitoring industry in the industrial, off-highway and recreational vehicle markets.  The company manufactures and designs its products all over the world at locations including: Tulsa, Oklahoma; Salisbury, United Kingdom; Shanghai, China; and Pune, India.  Before the sale, the company had four business units which were its Power Controls, Vehicle Technologies, Natural Gas Production Controls, and Engine Controls and Fuel Systems units. Since the company was founded, Enovation Controls has grown to lead the industry in which it operates providing products to top tier customers in the end markets that it serves.

Sun Hydraulics is a publicly traded company that designs, manufactures and sells a number of products that are used in hydraulic systems around the world. The company’s primary products are screw-in cartridge valves, manifolds, and integrated fluid power packages and subsystems, which control force, speed and motion in fluid power systems. Since being founded in 1970, Sun Hydraulics now generates almost over $190MM in annual revenue.



The Objective

The founders and owners of Enovation Controls, Frank Murphy III and Kennon Guglielmo, approached Founders Investment Banking in the 3Q of 2016 to aid them in the sale of their Power Controls and Vehicle Technologies business units to Sun Hydraulics.  While a number of suitors had expressed interest in the past, Sun preemptively approached Enovation with a very attractive offer for them to consider.  The business units contained some of the best brands in their respective markets, including the widely respected Murphy brand, and the synergistic opportunities that could be afforded to Sun were clearly evident.  Frank and Kennon believed that Sun could be the right partner for these businesses if they were able to close a transaction in a reasonable time frame at the value offered.



The Solution

Founders Investment Banking advised the owners of Enovation as they navigated with Sun through a number of key milestones including the initial signing of an LOI, the completion of diligence and the execution of the final purchase agreement.  In addition, Founders provided resources and support to expedite and streamline the diligence process as Enovation Controls and Sun Hydraulics exchanged confidential information.  Founders acted as a seamless partner to Enovation’s owners, management and legal counsel, ultimately leading to the completion of the transaction on December 5, 2016, successfully achieving:

  • An expeditious structuring of the transaction, completion of diligence and negotiation of the final agreement
  • A final purchase of the business at value consistent with the initial offer

After the transaction was consummated, Enovation Controls continued to operate its two other business units, Natural Gas Production Controls and Engine Controls and Fuel Systems, under a new operating entity not owned by Sun Hydraulics.

In order to provide securities-related services discussed herein, certain principals of Founders are licensed with M&A Securities Group, Inc. or Founders M&A Advisory, LLC, both members FINRA & SiPC. M&A Securities Group and Founders are unaffiliated entities. Founders M&A Advisory is a wholly owned subsidiary of Founders.

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