Chartwell Advises Michel Family and Superior Pump on Majority Equity Sale to Pedrollo Group S.p.A.

Chartwell is pleased to announce a majority sale of Superior Pump to Pedrollo Group S.p.A. (“Pedrollo”). The combination of these two entities presents an excellent opportunity for Pedrollo to penetrate the highly desirable North American water pump market with its newly-owned, well-established platform in Superior Pump. Chartwell served as the exclusive financial advisor to the Michel family and Superior Pump, providing comprehensive, unbiased counsel to the shareholders on the transaction.

Pedrollo is a family-owned, Italian-based pump manufacturer serving industrial and consumer markets in more than 160 countries worldwide. The Pedrollo multi-generational family business has prioritized the creation of sustainable water, energy, and technology solutions for its customers. In recent years, Pedrollo has been particularly acquisitive, with the prioritization of capturing both revenue and operational based synergies from numerous value-add acquisition targets.  This transaction is their first acquisition in North America.

Superior Pump is a producer and distributor of premium pumps designed for commercial and residential use. This multi-generational family business leverages strong and long-tenured manufacturing capabilities to deliver top-tier products for its wide array of North American-based customers. Management consistently maximizes its efforts to prioritize strategic resource allocation on new and existing customers, business development, and new product development. Coming from its long-standing history of family and entrepreneurial values, Superior Pump shares a similar vision and culture with its Italian-based counterpart, making it an optimal acquisition target for Pedrollo.

Pedrollo’s strategic ambition is to capture market share in North America and it sought out partnership with Superior Pump. Throughout an extensive search process, Pedrollo was intrigued by Superior Pump’s strong geographic footprint and excellent supplier relations. Through ensuing conversations with Superior Pump, it was clear that there are many complementary business aspects between these two companies.

Initial negotiations between the two entities began when Pedrollo approached the Michel family on an unsolicited basis to make a minority equity investment in Superior Pump. Through creative, solutions-based restructuring, Chartwell was able to negotiate with Pedrollo to progress from a minority to a majority equity purchase; allowing Charlie Michel (who will remain president of Superior Pump) to retain a minority equity interest. The negotiation and diligence processes were challenging on many fronts, including tariff expense and credits, working capital build-ups and draw-downs, and COVID-19 related anomalies. Pedrollo expects immediate synergies to be recognized in numerous business areas, including collaboration of design know-how, seamless integration of customer networks, and a more comprehensive product portfolio. The combined entity will now have an unparalleled reach into markets across the globe as it aims to leverage its robust manufacturing capabilities and distribution network. Pedrollo’s belief in Superior Pump is evidenced by the dedicated long-term capital commitment and is convinced it has found the right partner in Superior Pump.

Chartwell Value Add

The Michel family is extremely pleased with this partnership as it positions Superior Pump for significant growth and expansion into new markets, fully backed by the support of Pedrollo. We highly value the strategic and tactical M&A advice that Chartwell provided in this transaction process. Chartwell carefully listened to our family objectives which were successfully structured and negotiated in our transaction with the Pedrollo family."

— Charles (Chip) Michel Jr., Founder & Majority Owner, Superior Pump

This is a significant milestone for Superior Pump as we aim to combine our world-class pumps with a supreme partner like Pedrollo. We are delighted to be a part of Pedrollo’s strategic expansion plan in North America and look forward to spearheading these strategic efforts. The Pedrollo platform presents excellent synergies and cross-selling opportunities for both companies. Chartwell provided invaluable advice and insights throughout the M&A process, navigating through a number of complex financial issues while also successfully coordinating and providing due diligence requirements and reports during these unprecedented times."

— Charles (Charlie) Michel III., President, Superior Pump

About Superior Pump

Headquartered in Minneapolis, Minnesota, Superior Pump is a leading designer, manufacturer, and provider of high-quality water pumps sold to an extensive customer base including specialty retailers, wholesalers, distributors, and direct to consumer online. Consisting mainly of pumps, the Company’s wide product portfolio is tailored to incorporate numerous applications, spanning utility, sump, sewage, lawn and irrigation, pools, and more. Since 1932, the Michel family has established an extensive track record and unparalleled reputation in the plumbing industry. When Chip Michel started Superior Pump in 1999, it had a strong, long-tenured senior management team which guided the Company’s impressive business growth into several markets. Superior Pump employs a highly driven workforce, providing the Company the ability to seamlessly maintain its relationships with its well-known customer base. To learn more about Superior Pump, please visit www.superiorpump.com.

"We are absolutely delighted to have the opportunity to represent the Michel family in this all-important, transformational transaction. It was clear from the beginning of discussions that this transaction would be extremely beneficial for both parties. With Superior Pump’s excellent manufacturing capabilities and comprehensive product portfolio, we knew this was the right opportunity for Superior and Pedrollo to maximize their operations into new international markets. Superior Pump’s North American sales and marketing capabilities will provide Pedrollo many strategic benefits in the years to come. We would like to also thank all of the transaction professionals, both on the Michel and Pedrollo side, for their professionalism, creativity, and responsiveness during these unprecedented times."

— Greg Fresh, Managing Director & Head of Corporate Finance, Chartwell Financial Advisory

About Chartwell Financial Advisory

Chartwell provides comprehensive financial advisory solutions and investment banking services to the middle market. With substantial corporate finance and capital markets expertise, the Chartwell team works with clients and their advisors to deliver independent, solutions-based advisory services that are unbiased to outcome, free from conflicts, and focused on optimizing client objectives. For additional information on this transaction, please contact Greg Fresh, Managing Director and Head of Chartwell's Corporate Finance group.

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