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Capstone Partners Advises Avtek, Inc. on its Acquisition by Fidelity Capital Investors

October 2005

Boston, MA - Fidelity Capital Investors (FCI), a private equity leveraged buyout group, announced today that it has acquired a majority interest in Providence, RI, based Avtek, Inc, a leading manufacturer and distributor of industrial and commercial connectivity products and solutions. The purchase was made in conjunction with members of Avtek’s senior management team who will remain with the company and continue to operate Avtek as an independent business unit. Capstone Partners LLC served as advisor to Avtek in the sale. Terms of the deal were not disclosed.
 
Avtek conducts business through two operating subsidiaries:  B&B Electronics Manufacturing Company Inc. and System Connection, Inc. B&B Electronics designs, manufactures and sells industrial connectivity products such as communication protocol converters and Ethernet infrastructure products. B&B has locations in Ottawa, Illinois and Galway, Ireland. System Connection is a manufacturer of custom and OEM solutions cabling with offices in Provo, Utah and Taipei, Taiwan. With locations in the US, Europe, and the Pacific Rim, Avtek is able to deliver its products globally.
 
"The market for connectivity products is growing rapidly as communication protocols proliferate,” said FCI Managing Director David Wilson. “There is tremendous growth potential for companies that can provide a full range of products to meet the needs of industrial and commercial customers. As a leading manufacturer of both industrial and commercial connectivity products, Avtek, along with its subsidiary companies, is extremely well positioned to capitalize on the growth opportunities that exist in this market.”
 
“The acquisition presents many exciting opportunities for Avtek’s companies and our customers,” commented Richard McGrail, president and chief operating officer of Avtek. “Fidelity Capital Investors’ financial backing will ensure that we have the resources necessary to support our growth initiatives. We are very excited about the potential of this relationship and, moving forward, will remain focused on delivering exceptional service and high quality products to our customers.”
 
Fidelity Capital Investors (FCI) is a private equity leveraged buyout firm focused on acquiring established middle-market businesses. Investing exclusively for the account of Fidelity Investments, FCI actively seeks to partner with existing management teams to acquire and grow companies with revenues between $25 million and $250 million.
 
Avtek, Inc. is a privately-held, Providence, Rhode Island-based company that conducts business through two operating subsidiaries, B&B Electronics, Inc. and System Connection, Inc. Avtek is a premier manufacturer of industrial and commercial connectivity solutions in the U.S. With locations in the U.S., Europe, and the Pacific Rim, Avtek is able to deliver its connectivity solutions globally.
 
B&B Electronics, founded in 1981, Ottawa, Illinois-based, designs, manufactures and sells industrial connectivity products such as commercial protocol converters and Ethernet infrastructure products.  With offices in the US and Europe, the company sells its products worldwide. In addition to manufacturing products, B&B is also a value-added distributor for many quality vendors, allowing the company to serve as a single source for comprehensive data communications solutions.
 
System Connection, founded in 1985, provides cabling and interconnection solutions to OEMs, distributors, contract manufacturers and cable assembly manufacturers. Its customers represent a wide spectrum of industries, including audio/video, auto, computer, data/telecom, electronics, health fitness, industrial, medical, POS and security. Headquartered in Provo, Utah, the company has international offices in Taiwan.
 

 “Capstone’s understated professional demeanor was a major selling point as we evaluated potential partners to assist with the sale of our company.   Once engaged, they produced a comprehensive list of premier buyers dedicated to closing a transaction that met the needs of all shareholders.  As promised, Capstone delivered a partner and a transaction that positioned the Company and its management team for future success while maximizing value for its existing shareholders.” 
Richard McGrail
President, Chief Executive Officer
Avtek, Inc.