Supply chain systems design and integration firm Fortna Inc. has been acquired by the private equity firm Thomas H. Lee Partners L.P. (THL), an investment house with other holdings in the logistics industry that sees big growth prospects in e-commerce and the rising demand for advanced warehouse automation infrastructure.
Terms of the deal were not disclosed and the transaction is subject to customary closing conditions, Boston-based THL said Wednesday.
The deal will give West Reading, Pa.-based Fortna the strategic and financial resources to accelerate its growth in the e-commerce sector, including the potential for mergers and acquisitions (M&A) and continued geographic expansion, THL said in a release.
Fortna provides distribution strategy, operations design and implementation, material handling automation, and warehouse execution software systems. Those products help brands enhance their distribution operations through reduced operating costs, higher throughput, and improved service, Fortna says.
Those capabilities match up well with a broad market trend of rising use of automation to handle business growth in an economic climate where labor is both hard to find and expensive, Jim Carlisle, managing director at THL, said in an interview. Because of those pressures—as well as improving technology—warehouse automation has become very compelling from a return on investment (ROI) perspective as companies try to offset the rising cost of doing business with increased efficiency in the DC, Carlisle said.
THL plans no organizational changes at Fortna following the acquisition, saying the company would see a "business as usual" approach that will differ only in providing the firm with more resources for expansion, he said. "We intend to invest in their growth, whether on an organic basis or in finding companies [for acquisition opportunities] that are complementary through geography or capability," Carlisle said. "We believe in M&A as a driver of value creation for business and as a tool to serve our companies' customers' needs."
Even before the acquisition, Fortna had been expanding fast in recent years, moving its Atlanta operations from the suburbs into the midtown area in 2017 in a bid to attract top talent, opening a software office in Vietnam to advance the development of its "FortnaWCS" and "FortnaWES" products, and expanding into Canada in 2016 by opening a Toronto office. The firm has also extended its solutions through partnerships with logistics tech providers such as Llamasoft and Manhattan Associates.
In a previous logistics sector deal, THL also acquired Material Handling Systems Inc. (MHS) in 2017, saying the provider of advanced parcel sortation systems engineering and equipment was in a good position to benefit from accelerating demand for the automation products used in e-commerce fulfillment.
Since that deal, MHS itself has acquired OCM (Officina Costruzioni Meccaniche), a European-based company that provides sortation system technologies to international courier and warehouse & distribution logistics companies, as well as VanRiet Material Handling Systems, Atronix Engineering Inc., and Advanced Production Systems Inc.