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MiddleGround Capital Closes $440 Million Continuation Vehicle to Combine Castle Metals and Banner Industries


Financial Backing to Solidify Industry-Leading Market Position for Newly Combined Company

LEXINGTON, Ky., Nov. 21, 2023 (GLOBE NEWSWIRE) -- MiddleGround Capital, a Lexington, Kentucky-based operationally focused private equity firm that makes control investments in lower middle market industrial B2B and specialty distribution companies in North America and Europe, today announced the successful closing of MiddleGround Carbon CV, L.P., a single asset continuation vehicle (“CV”) with approximately $440 million in capital commitments that provided the capital to purchase Banner Industries (“Banner”), a leading processor and distributor of metal bar products for a diverse set of industrial and medical end markets, and A.M. Castle & Co. (“Castle Metals”), a leading provider of metals, services, and supply chain solutions serving industrial and aerospace customers. MiddleGround originally purchased Banner in December of 2019 from High Street Capital, of Chicago.

Since MiddleGround's investment in Banner in 2019, MiddleGround brought industry veteran Dan Stoettner back to lead the business. Under Stoettner’s leadership, the company completed two acquisitions. In 2019, the company did a little over $100 million of revenue with ~$9 million of EBITDA. For the Last Twelve Month (“LTM”) period Banner has more than tripled in size to nearly $350 million of revenue and EBITDA has expanded to ~$55 million.

The management team at Banner, led by Stoettner, has demonstrated the ability to maximize performance while integrating new acquisitions and expanding the geographic footprint of the business through greenfield expansion projects.

Castle Metals was a public company up until 2020 and has been on MiddleGround’s watch list for years. Castle has a global footprint and ~$600 million of revenue with ~$50 million of EBITDA. MiddleGround acquired Castle earlier this year and Fund I has warehoused the deal using recyclable capital while MiddleGround raised the CV.

“Our goal is to consistently deliver value to our investors through cash returns,” said John Stewart, Founding and Managing Partner of MiddleGround Capital. “With the successful close of this continuation vehicle, we were able to return significant capital to Fund I investors and had the opportunity for a meaningful liquidity event that returns $102 million of recyclable capital and $234 million of Fund I returns. In this market, this is an extraordinary achievement and demonstrates our ability to find creative solutions in a difficult market for the benefit of our investors. While the Banner investment has been a successful outcome for Fund I, the CV has a lot of opportunity to create value for its investors and we saw a strong uptake from Fund I investors investing in the CV as well as strong demand from new investors. Hamilton Lane was lead investor on the deal. Our team, led by Ryan McComb on the Transaction side and Mandy Kamm on the Investor Relations side, raised the CV in less than 30 days. We were able to sell Banner with no discount to the mark and with no placement agent fees. Since the inception of MiddleGround we have built strong investor relationships that appreciate our differentiated approach to Industrial investing. We have delivered over a billion dollars of co-investment opportunity and those relationships were the difference while raising the capital for the CV.”

“The CV allows MiddleGround to extend its ownership of Banner as well as to support a merger between Castle and Banner. The combination further expands on MiddleGround’s value creation plan by building a global leader within the metals distribution space. Following the close of the transaction, Banner and Castle will continue to operate as independent brands while also benefiting from these additional resources, expanded geographic reach, and complementary product offerings under a single capital structure,” said Ryan McComb, Director and the lead of the Transaction Team for the CV.

“The combined company will be led by industry veterans Dan Stoettner and Dan Lewis, who will be CEO and CFO, respectively. This transaction is a strong step forward for both Banner and Castle and with the ongoing support provided by MiddleGround, the combined company is well-positioned to enter the next phase of growth. Not only will the merger allow for operational improvements and geographic expansion opportunities for both Banner and Castle, it will also have no impact on current customer relationships or product offerings,” added McComb.

“This is a natural fit given that Banner and Castle have long been recognized for their unparalleled metals expertise across the medical, industrial, and aerospace sectors,” said Stoettner. “Through this combination, we will be better equipped to meet the evolving needs of a variety of industries. Further, the CV will also bring even stronger financial footing and ensure we are poised to capitalize on growth opportunities in the future, adding reliability and resilience for our employees, our customers, and our ability to serve as a leading provider in our sectors. By joining forces, we stand to greatly enhance our specialty metals platform, ensuring we have the ability to address a broader range of key end markets while simultaneously better serving the needs of our customers.”

“Our goal in this merger is to position our company as a market-leading supplier for our long-standing, loyal customers,” said Mark Zundel, Executive Vice President, Aerospace & Corporate Strategy at the combined company. “The combination enhances the many synergies between our brands, and our recapitalized structure will allow us to expand into new areas and markets. I am confident that together we will enhance our collective ability to provide the broadest range of high-quality metals as well as solve distribution, pricing, processing, and supply challenges both globally and locally.”

Cerberus and Fifth Third partnered with MiddleGround Capital to provide the debt financing to complete this transaction and serve as the combined company’s lenders post-close. Dechert LLP served as a buy-side legal advisor and Greenberg Traurig LLP served as a sell-side legal advisor to MiddleGround Capital.

About Banner
Established in 1961, Banner Industries is a value-added metals processor and distributor serving OEMs, contract manufacturers, and precision machine customers through two divisions: Banner Service Corporation (“BSC”) and Banner Medical Innovations (“BMI”). BSC serves a diverse set of industrial customers and steel service centers with applications in irrigation, diesel fuel systems, electric motors, agriculture, aerospace, and auto, among others. BMI processes medical-grade metals for device manufacturers in orthopedic, spine, dental, and other specialty medical fields. Banner is headquartered in Carol Stream, IL with additional facilities in IL, IN, OH, TX, CT, CA, TN and Mexico. For further information, please visit:

About Castle Metals
A. M. Castle & Co. is a leading provider of metals, services, and supply chain solutions. Headquartered in Oak Brook, IL and established as the metals business brand in 1890, Castle Metals distributes and processes alloy, carbon, stainless steel, nickel, aluminum, titanium, cast iron, and red metals. For more information, please visit:

About MiddleGround Capital
MiddleGround Capital is a private equity firm based in Lexington, KY. MiddleGround makes control equity investments in middle market B2B industrial and specialty distribution businesses. MiddleGround works with its portfolio companies to create value through a hands-on operational approach and partners with its management teams to support long-term growth strategies. For more information, please visit:

MiddleGround Capital Media Contacts
Doug Allen/Maya Hanowitz
Dukas Linden Public Relations
+1 (646) 722-6530

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