The L.S. Starrett Company is set to go private.

The Athol, MA-based manufacturer of precision tools, cutting tools and metrology systems announced March 11 that it has agreed to a go-private transaction with an affiliate of private equity firm MiddleGround Capital.

The all-cash transaction involves MiddleGround paying $16.19 per Starrett share, representing about a 63% premium to the company’s closing stock price on March 8 — the last trading day prior to announcing the transaction. Overall, it represents a deal value of approximately $122 million.

“Following comprehensive outreach to potential parties, our board of directors determined that MiddleGround is the right partner for Starrett because of its deep knowledge within the manufacturing industry,” Starrett Chairman, CEO and President Douglas Starrett said in a news release. “As a private company, the company will have additional financial and operational flexibility to continue providing industry-leading service and products to our customers across our markets and maintaining Starrett’s proud tradition among its employees, communities and other stakeholders.” 

Founded in 1880 by Laroy S. Starrett and incorporated in 1929, Starrett manufactures over 5,000 different products for industrial, professional and consumer markets. The company currently operates four major global manufacturing plants to serve the global industrial base, with a concentration in the metalworking, construction, machinery, equipment, aerospace and automotive markets. 

Based in Lexington, KY, MiddleGround has over $3.5 billion of assets under management. The firm makes control equity investments in middle market B2B industrial and specialty distribution businesses.

Approved by Starrett’s board, the proposed transaction is expected to close in mid-2024, subject to approval by Starrett’s shareholders and other conditions. Upon closing, Starrett will become a wholly-owned subsidiary of MiddleGround and its common stock will no longer be listed on public markets.

“MiddleGround is thrilled to be partnering with Starrett, a brand we have long admired, and a company that we have followed in the public markets for several years,” MiddleGround Managing Partner John Stewart added. “Most of MiddleGround’s Operations team gained familiarity with Starrett products over the course of their manufacturing careers, and we are excited about the opportunity to further position the company for its future on the front lines of innovation, advanced manufacturing and reshoring.”

Starrett is being advised by Advisors Lincoln International (lead financial) and Ropes & Gray (legal). MiddleGround is being advised by William Blaire & Company (exclusive financial) and Dechert LLP (legal).