Washington Equity Invests in Arc Drilling

11/22/17

Washington Equity Partners, in partnership with the Company's existing owners and management, today announced an investment in Arc Drilling, LLC. Headquartered in Cleveland, Ohio, Arc Drilling is a leading provider of electrical discharge machining (EDM) solutions to the industrial gas turbine and aerospace engine markets. Arc Drilling is Washington Equity's second portfolio company in the Aerospace, Defense and Government (ADG) sector and will serve as Washington Equity's platform company in the growing EDM market.

Founded in 1961, Arc Drilling's capabilities include Fast Hole EDM, Wire EDM and Sinker EDM. The Company has a long history of being an industry leader in production quality and turnaround times, and it performs EDM services on over 200,000 parts per year for a diversified customer base that includes GE, Parker Hannifin, Precision Castparts, Swagelok and Woodward. With facility locations in Cleveland, OH, Greenville, SC, and Charleston, SC, Arc Drilling is strategically positioned near major industrial gas turbine and aerospace engine manufacturing centers.

Arc Drilling's current management team, led by Lee Trem and Kevin Trem, will continue to lead the Company going forward. "We are very excited to partner with Washington Equity as we lead Arc Drilling through this next stage of transformative growth," said Lee Trem, President of Arc Drilling. "Market demand for high quality EDM suppliers like Arc Drilling is at an all-time high, and Washington Equity's strategic focus on growth and market leadership make it an ideal partner for us."

Kevin Trem, Vice President of Arc Drilling, commented, "We look forward to leveraging Washington Equity's resources, relationships and domain expertise in gas turbines as we expand our business. Having more resources and capital available will enable us to provide even better value to our customers through geographic expansion and the development of new capabilities."

Jesse Liu, a Partner at Washington Equity, said, "As a pure-play EDM provider, Arc Drilling is uniquely positioned to benefit from the growing demand in the turbine market for manufacturing technologies that can reliably produce small and complex hole channels and gas pathways. Lee Trem, Kevin Tremand the entire management team at Arc Drilling have built an industry leader in EDM capability and execution quality and we are proud to have the opportunity to partner with them."

Gladstone Capital, Farragut Capital and Siguler Guff provided debt and equity financing in support of the transaction.

EdgePoint Capital provided M&A advisory services to Arc Drilling.

About Washington Equity Partners

Washington Equity Partners is a sector-focused private equity firm that makes control equity investments in established lower middle market businesses with strong prospects for rapid organic and acquisition-driven growth. The firm is headquartered in McLean, VA and is focused on investing in: (i) Aerospace, Defense, and Government Contracting, (ii) Industrial and Advanced Manufacturing, and (iii) Software and Technology. www.w-equity.com

About Arc Drilling

Headquartered in Cleveland, Ohio, Arc Drilling is a leading provider of Fast Hole EDM, Wire EDM and Sinker EDM manufacturing services. The Company was founded in 1961 and is a long-time supplier to OEMs and Tier I suppliers in the industrial gas turbine, aerospace engine and industrial markets. Arc Drilling has manufacturing operations in Cleveland, Ohio; Greenville, South Carolina; and Charleston, South Carolina. www.arcdrilling.com

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