The Sterling Group, a Houston-based middle-market private equity firm, announced that its affiliated investment fund, Sterling Group Partners III, acquired the Dexter Axle business from Tomkins Industries, Inc., a subsidiary of Pinafore Holdings B.V. This is Sterling’s fourth investment in its third fund, an $820 million fund raised in 2010. Dexter is the second business Sterling has acquired from Tomkins in the last 14 months.

Dexter designs and manufactures trailer axle, brake and suspension assemblies and related replacement parts and components for use primarily in the industrial and utility trailer and RV markets in North America.

The acquisition was financed with equity from Sterling Group Partners III and several other co-investors. Senior debt financing was arranged by BNP Paribas and mezzanine debt was provided by Hancock Capital Management and Fifth Street Capital.

Sterling has sponsored 22 business carve-outs from larger corporate parents, including multiple acquisitions from DuPont, British Petroleum and Tomkins.

“We are excited about the opportunity to draw on our deep experience with corporate carve-outs to transition Dexter to a stand-alone business,” Kevin Garland, partner at The Sterling Group, said. “We look forward to partnering closely with management to achieve new levels of profitability and create value for all shareholders.”

The Sterling Group is a private equity investment firm that targets controlling interests in basic manufacturing, distribution and industrial services companies.