Information on the Target

Subsea Technology & Rentals (STR) is a premier global provider of subsea sensor equipment and solutions, primarily serving the offshore energy, infrastructure, and marine science sectors. With over 20 years of industry experience, STR specializes in delivering mission-critical solutions that support various operations, including offshore surveys, remotely operated vehicles (ROVs), inspection, repair, maintenance (IRM), positioning, environmental monitoring, and subsea construction.

Since Baird Capital's investment in January 2022, STR has rapidly expanded its operations and capabilities in both the US and Asia. Under the leadership of CEO Steve Steele, who has been at the helm since 2022, the company has achieved remarkable growth, particularly in the US market, where revenues have surged by over 300% over the past three years.

Industry Overview in the Target’s Specific Country

The subsea sensor technology industry has been gaining traction globally, with a notable emphasis on innovation and sustainability. As the demand for renewable energy sources increases, subsea solutions have become integral to offshore wind farms and other sustainable energy initiatives, focusing on environmental monitoring and infrastructure support.

In the United States, the offshore energy sector is undergoing a significant transition towards more sustainable practices. This transition is driven by federal policies aimed at supporting clean energy and reducing carbon footprints. Consequently, there is heightened interest and investment in subsea sensor technologies that can efficiently monitor and manage energy production in marine environments.

Furthermore, the marine science field is evolving, necessitating advanced technologies to address environmental challenges and support research initiatives. As a result, companies like STR are poised to benefit as they provide essential tools and solutions that enhance operational efficiency and data collection in these sectors.

The growing synergy between technology and environmental sustainability positions industries reliant on subsea technology for substantial growth in the coming years, making this an opportune time for investors to engage in these markets.

The Rationale Behind the Deal

This transaction marks a significant milestone for Baird Capital as it fully realizes its investment in STR. The decision to sell to Star Capital is underpinned by STR's demonstrated growth trajectory and strong operational alignment with the evolving demands of the offshore energy and marine science markets. Baird Capital's support in scaling STR’s capabilities has been pivotal, setting the stage for continued growth under the stewardship of its new owners.

The alignment in values and goals between Baird Capital and STR, particularly regarding sustainability and the energy transition, further justifies the deal. Baird Capital's successful exit reflects its ongoing strategy to invest in innovative companies that are vital to addressing modern energy challenges.

Information About the Investor

Baird Capital is the investment arm of Robert W. Baird & Co., managing two key platforms: Venture Capital and Global Private Equity. Since its establishment in 1989, Baird Capital has built an impressive portfolio focusing on B2B technology and service-oriented companies across multiple markets globally. Known for its deep expertise in specific sub-sectors, Baird Capital leverages its operational knowledge to foster the growth and operational excellence of its partner companies.

The firm is recognized for its strategic oversight and proactive engagement with its portfolio companies. Baird Capital’s extensive advisory network includes professionals from various fields, including legal, financial, and commercial sectors, ensuring a holistic approach to investment management.

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The sale of STR to Star Capital appears to be a strategically sound investment, given STR’s impressive growth and the strong demand for subsea technologies in the offshore energy market. Baird Capital’s proactive approach to supporting STR's international growth and technological advancements has positioned the company for ongoing success in an industry that is becoming increasingly critical to sustainable energy.

Moreover, the alignment of STR's operations with the global shift towards renewable energy further enhances its market value. As industries continue to prioritize sustainability, the demand for advanced subsea solutions will likely accelerate, presenting a lucrative opportunity for Star Capital in the long run.

In conclusion, this transaction exemplifies effective investment strategy; Baird Capital's understanding of market dynamics has facilitated a successful exit and positioned STR well for future growth under Star Capital's leadership. The emphasis on collaboration and shared values between the parties enhances the likelihood of STR’s continued success.

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