Electronic Data Magnetics, a client of SC&H Capital, an investment bank specializing in M&A advisory, completed a going concern sale of its 38-year-old family-owned-and-operated manufacturing company to Paragon Group ID, a French société anonyme.
Electronic Data Magnetics is certified to manufacture and supply technically advanced printed products — both magnetically striped and patented radio-frequency identification (RFID) products —to original equipment manufacturers (OEMs) of card vending equipment in the transit market and other industries. Electronic Data Magnetics has provided these products to nearly every major city in the U.S. either directly or through its OEM partners. However, widespread shutdowns and stay-in-place orders induced by the COVID-19 pandemic contributed to a significant loss of ridership for Electronic Data Magnetics’ customers.
In late April, SC&H Capital’s special situations team was retained as the exclusive court-approved investment banker to seek a buyer for the company. The team conducted a marketing process that generated market interest and negotiated a transaction with Paragon, a manufacturer of RFID products.
Paragon also purchased the related real estate from Electronic Data Magnetics’ affiliate, Hallman Properties. As a result of these transactions, the business will continue to operate on its existing 150,000 square-foot campus and employ a majority of its management team and more than 30 employees.
“We were extremely pleased to negotiate a transaction with Paragon,” Hank Waida, principal at SC&H Capital, said. “This allows EDM’s experienced workers to continue employment and gives the buyer the opportunity to expand their U.S. manufacturing capabilities.”
Other professionals who worked on the transaction included James C. Lanik, Jennifer Lyday and Evan Lee of Waldrep, Wall, Babcock & Baily (counsel for the debtor); James R. Hundley of Wyatt, Early, Harris & Wheeler (counsel for Hallman Properties); Walter W. Pitt Jr. and Daniel Bruton of Bell, Davis & Pitt (counsel for Truist Bank); and John Magee of Aurora Management Partners (financial adviser to Truist Bank).