CTG, a portfolio company of Blue Wolf, has acquired HC Materials

Lincoln International (“Lincoln”), a leading global mid-market investment bank, announced today the successful completion of a financing for an affiliate of Channel Technologies Group, LLC (“Channel Technologies” or the “Company”), a portfolio company of Blue Wolf Capital Fund II, L.P. (“Blue Wolf”). Channel Technologies is a vertically integrated manufacturer and supplier of mission-critical components and systems that utilize piezoelectric ceramic technology.

Lincoln acted as the exclusive financial advisor to the Company and Blue Wolf and completed the placement of an undisclosed amount of debt financing, consisting of a senior credit facility provided by OneWest Bank and subordinated notes funded by Avante Mezzanine Partners and Fidus Investment Corporation. Proceeds from the transaction were used to refinance Channel Technologies’ existing credit facility and partially fund the acquisition of the assets of H.C. Materials Corporation (“HC Materials”), the leading producer of piezoelectric crystals. Together, Channel Technologies and HC Materials are the leading developers and manufacturers of mission-critical imaging components using piezoelectric ceramics and crystals, primarily used in defense, healthcare and energy applications.

As the Company’s exclusive financial advisor, Lincoln International worked closely with Blue Wolf and Channel Technologies’ management team to structure and arrange the financing. Haranjeet Narulla, Principal of Blue Wolf, commented, “Lincoln did an excellent job preparing materials and educating lenders on a highly technical industry. By outsourcing the financing process, we were able to focus our attention on a complex add-on M&A transaction, while Lincoln helped us secure multiple sources of debt capital that are well-suited to support the Company’s future growth and strategic initiatives.”

About Channel Technologies Group, LLC

Located in Santa Barbara, California, Channel Technologies Group designs and manufactures piezoelectric based advanced materials, sensors, and completed integrated systems that support mission critical applications for military and commercial markets. Since its founding in 1959 as Channel Industries, Channel Technologies has been providing a broad range of highly-engineered value-added products, components, and systems for use in the most demanding environments. Channel Technologies’ products and services are used in a variety of applications and by diverse end users, including medical device manufacturers, oil service and exploration companies, and customers in the defense industry, including numerous departments of the U.S. Navy and many leading defense contractors.

About H.C. Materials Corporation

Located in Bolingbrook, Illinois, H.C. Materials Corporation is a worldwide leader in the development and manufacture of giant-piezoelectric single crystals, specializing in lead magnesium niobate-lead titanate (PMN-PT) based piezocrystals and finished crystal elements. H.C. Materials also supplies crystal products for next generation acoustic transduction devices in a variety of applications such as medical ultrasound imaging, ocean mining, sensors, transducers and sonar systems. H.C. Materials has two production lines located in Bolingbrook, Illinois, a western suburb of Chicago.

About Blue Wolf Capital

Blue Wolf Capital is a private equity firm that takes control stakes in middle market companies based in the United States and Canada, and works with those companies to resolve complexities and achieve sustainable growth. Blue Wolf invests in strong businesses whose value can be increased by constructive resolutions of complex challenges, particularly those involving financial or operational distress, troubled labor relations, or governmental or regulatory issues. In July 2013, Blue Wolf closed on $300 million in limited partner equity commitments for its latest fund, Blue Wolf Capital Fund III, L.P. For more information about Blue Wolf visit www.blue-wolf.com.

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