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SFW Capital Partners completes majority recapitalization of Knoxville-based RDI Technologies

By Tom Ballard, Chief Alliance Officer, PYA

SFW Capital Partners LP, a Rye, NY-based private equity firm, announced yesterday that it has completed a majority recapitalization of Knoxville-based RDI Technologies, a provider of vision-based analytical solutions used for predictive maintenance and test and measurement applications across a diverse set of industries.

The West Knoxville company was founded in 2015 and has placed high on Inc. Magazine’s listing of the 5000 fastest growing privately held companies in the country for the past three years. It was the Knoxville region’s highest listed company in 2019 at #33, again led the region in 2020, but this time at #301, and was #2036 in 2021. How does that decline happen? The methodology that Inc. uses is the percentage of a company’s revenue growth in a three-year period, making it a real challenge to continue to outperform yourself year-after-year.

RDI is best known for its patented technology, which includes proprietary video and image processing algorithms. The platform, powered by Motion Amplification®, enables customers to identify vibration-related machine issues that are difficult to diagnose through the naked eye or traditional sensors. By detecting these issues early, RDI’s customers can increase the uptime and reliability of their assets and improve their decision making. Those customers include some of the largest companies in the world such as Google, Nissan, Duke Energy, Newmont, and Chevron.

Jeff Hay

Yesterday’s announcement noted that RDI Founder and Chief Executive Officer Jeff Hay, President Bob Wilson, and Chief Operating Officer Jenna Johns are all reinvesting alongside SFW to retain a significant equity stake in the company.

“RDI is a true innovator with proprietary and proven technology that is delivering significant ROI for its customers, which include many blue-chip names from various industries,” said Ahmad Sheikh, Partner at SFW who will serve as Chair of RDI’s Board of Directors. “We look forward to applying our expertise and network in the industrial technology sector to support Jeff and the RDI management team in unlocking significant value for their customers, employees and all other stakeholders.”

We first spotlighted the then early stage company in this 2015 teknovation.biz article when it was exploring both bridge and machinery inspections as well as baby monitoring. Our last update focused on how the company had adapted successfully to COVID-19 in this article 13 months ago.

Bob Wilson

In yesterday’s news release, SFW noted that the global predictive maintenance market size has been valued by industry analysts at more than $4 billion in 2020, and it is projected to reach $64.25 billion by 2030, growing at a compound annual growth rate of 31.0 percent from 2021 to 2030.

“When we met Ahmad and the SFW team at a trade show several years ago, we were impressed by their expertise in the predictive maintenance and test & measurement sectors, as well as their approach to partnering with founders and management teams,” Hay said. “We have enjoyed great success since our founding, and we’re confident SFW’s extensive network and market knowledge will enable us to accelerate our growth rate, expand our client base, and bring more innovative solutions to market that take predictive maintenance forward. We also look forward to working with SFW to pursue acquisitions of complementary technologies for predictive maintenance and test and measurement applications, in areas such as video-based measurement and analysis, machine learning, and IoT (Internet of Things).”

Jenna Johns

Johns added, “SFW is the perfect strategic partner for RDI as we look to continue scaling over the next several years while also establishing a more significant international footprint.”

SFW has led investments in several leading family and founder-owned businesses in the industrial and life sciences technology sector including Caron Products and Services, Essen Bioscience, Filtec, Granite River Labs, Micromeritics, Pion, and Bigneat, a subsidiary of Caron Products and Services. In each of these investments, the combination of SFW’s industry expertise and partnership approach were critical factors in being selected as an investment partner.

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