LOUISVILLE, Kentucky and ATLANTA–(BUSINESS WIRE)–MHS Global (“MHS”), a leading global provider of material handling automation and systems integration technologies, and Fortna (“Fortna”), a leading software and solutions provider for Warehousing and Distribution, will combine to form a billion-dollar multinational company providing parcel, warehousing and distribution, and lifecycle services. MHS and Fortna are part of the investment portfolio of Thomas H. Lee Partners, LP (“THL”), a leading private equity firm that invests in middle-market growth companies. THL will remain the majority owner of the combined company and a wholly owned subsidiary of Abu Dhabi Investment Authority (“ADIA”) will acquire a significant minority stake to support the combination.
As businesses increasingly demand improved throughput and faster execution, there is an increased demand for automation, advanced operating software, and services. The combination of MHS automation technologies and Fortna’s operational optimization software, in addition to each company’s deep industry partnerships, addresses the need for end-to-end solutions in logistics operations. Customers will benefit from the breadth and depth of both companies’ offerings: industry-leading capabilities in parcel, cross-docking, transportation and sortation solutions combined with state-of-the-art orchestration and optimization software and to unique operational designs leveraging advanced automation to increase efficiency. and cost savings for customers.
“MHS has built its reputation over the past 20+ years on being a trusted and committed partner while expanding our capabilities and taking a progressive, forward-thinking stance to deliver new products and solutions,” said Scott McReynolds, CEO from MHS. “The association with Fortna will allow us to accelerate our collective efforts on all fronts, for the benefit of our customers, employees and suppliers.
“Fortna has been a trusted advisor that has delivered a competitive advantage to our customers as they build direct-to-consumer models, increase service levels and drive down service costs,” said Rob McKeel, CEO of Fortna. “The combination with MHS will allow the model to evolve with our customers globally and allow the combined company to further drive innovation in operating models, software and automation.
Upon closing, McKeel will become CEO and McReynolds will become President of the combined entity.
Hamad Shahwan Al Dhaheri, Executive Director of Private Equity at ADIA, said: “MHS and Fortna are leading players in their respective industries, and their combination will create a significant operating platform for the company to deliver automation solutions to its customers globally. This transaction is part of our approach of investing alongside proven partners to support technology leadership. »
Jim Carlisle, Managing Director of THL and Head of Technology and Business Solutions and THL Automation Fund, said: “We look forward to working with the management teams and talented employees of Fortna and MHS as we continue to drive excellence in logistics automation. Automation solves industry-wide problems, such as labor shortages, and helps customers meet growing demand. Both companies are well positioned to meet these challenges and open up new opportunities for their customers. »
Carlisle will serve as Chairman of the Board of the combined company.
This transaction is subject to customary closing conditions and regulatory approvals. Terms of the transaction were not disclosed.
Morgan Stanley & Co. LLC and RBC Capital Markets, LLC served as financial advisors to MHS. Baird served as financial advisor to Fortna. Kirkland and Ellis respectively acted as legal counsel for the two companies. JP Morgan Securities, LLC will lead the debt financing for MHS.
JP Morgan Securities, LLC and Gibson, Dunn & Crutcher LLP respectively acted as financial and legal advisors to the ADIA subsidiary.
MHS is a leading global provider of automated materials handling systems, solutions, software and products for key customer fulfillment, distribution and logistics operations. Specifically, MHS provides project engineering, systems integration, conveyor, sorting robotics and a range of other software products and solutions.
MHS is part of a large, exciting industry that is experiencing significant growth and transformation driven by two megatrends: e-commerce and automation. Against this backdrop, MHS is transforming into a high-growth global multinational, encompassing new product and solution offerings, new geographies, product manufacturing and best-in-class corporate culture.
Headquartered in Louisville, Kentucky, with approximately 3,000 employees worldwide, the company operates in North America, Europe and Asia. MHS has a global installed base of over $6.5 billion for small to large parcel, distribution and fulfillment projects across a variety of industries, including e-commerce, parcels, third-party logistics and external integrators. To visit www.mhsglobal.com.
Fortna partners with the world’s leading brands to transform their distribution operations to keep pace with digital disruption and growth goals. Known worldwide as The Distribution Experts™, Fortna designs and delivers intelligent solutions, powered by FortnaWES™ software, to optimize fast, accurate and cost-effective order fulfillment. Fortna’s people, innovative approach and proprietary algorithms and tools ensure optimal design of operations and flow of material and information. Fortna delivers exceptional value to customers every day through comprehensive services including network strategy, distribution center operations, material handling automation, supply chain systems, design and implementation of warehouse software, as well as a full suite of lifecycle services and support. To visit www.fortna.com.
Thomas H. Lee Partners, LP (“THL”) is a leading private equity firm that invests in mid-market growth companies exclusively in three sectors: healthcare, technology and financial services and technology solutions and commercial. THL combines deep industry expertise through our Identified Industry Opportunity (“ISO”) process with dedicated internal operational resources from its Strategic Resource Group (“SRG”) to transform and build large businesses of sustainable value into partnership with management. The company’s domain expertise and resources help build great companies with the goal of accelerating growth, improving operations and creating long-term sustainable value. Since 1974, THL has raised more than $30 billion in equity capital, invested in 160 companies and completed more than 500 follow-on acquisitions representing an aggregate enterprise value upon acquisition of more than $210 billion. To visit www.thl.com.
Founded in 1976, ADIA is a globally diversified investment institution that prudently invests funds on behalf of the Government of Abu Dhabi through a strategy focused on creating long-term value.
ADIA has been investing in private equity since 1989 and has built a large in-house team of specialists with experience across asset products, geographies and sectors. Thanks to its extensive relationships across the industry, the Private Equity department invests in private equity and credit products on a global scale, often alongside external partners, and through primary and secondary funds managed in external. Its philosophy is to build long-term, collaborative relationships with its partners and corporate management teams to maximize value and support the implementation of agreed strategies. To visit https://www.adia.ae/.