Customized Solutions. Superior Execution.
Western Reserve’s professionals have extensive experience in the distribution industry, having executed more than 40 transactions at a collective value of nearly $2 billion in the following sectors:
ESSCO INC. (PORTFOLIO COMPANY OF MCM CAPITAL PARTNERS)
Western Reserve served as the exclusive investment banker to MCM Capital Partners in the firm’s sale of ESSCO, the leading distributor of floor care products to independent storefront and internet retailers in the United States. ESSCO was acquired by Cardinal Equity Partners, an Indianapolis-based private equity firm.
Founded in 1924 and based in Twinsburg, Ohio, ESSCO distributes over 12,000 SKUs of floor care cleaning equipment and consumable parts, including products from Hoover, Kirby, Bissell, Oreck and Panasonic. ESSCO’s unique nationwide distribution network allows it to provide time sensitive floor care retailers with the fastest lead times and broadest product selection in the industry. ESSCO is also a leading provider of drop ship services for specialty floor care internet retailers and internet order fulfillment services for mass merchant retailers.
Leading the transaction for Western Reserve was Managing Director David Dunstan, Vice President Andrew Male and Analyst Jessica Fleck. Western Reserve also represented ESSCO in its original sale to MCM Capital Partners in 2005.
“Western Reserve is proud to have represented ESSCO in its sale first to MCM and now to Cardinal,” said Mr. Dunstan. “ESSCO has built the leading nationwide distribution platform and an exceptional management team under MCM’s guidance. The company, now the well entrenched market leader, is exceptionally well positioned for future growth.”
Steve Ross, Managing Director and Partner of MCM Capital Partners, said of Western Reserve’s involvement, “The Western Reserve team executed a highly efficient process that allowed MCM to realize an excellent return for its shareholders and find an ideal partner for ESSCO’s management team and employees going forward.”
ESSCO Chief Executive Officer Tom Bianco said, “Western Reserve’s assistance was critical for our management team throughout the sale process. Our team is excited to be partnering with Cardinal Equity Partners as we continue to develop new and innovative ways to best service the floor care industry.”
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Western Reserve acted as exclusive financial advisor to Fire-Dex, LLC in its recapitalization with Peninsula Capital Partners L.L.C. This transaction represented the firm’s second engagement by Fire-Dex, as Western Reserve assisted the company in its 2007 recapitalization by Brown Brothers Harriman and StoneCreek Capital.
Headquartered in Medina, Ohio, Fire-Dex, LLC is one of North America’s largest and fastest growing manufacturers of turnouts and related gear for firefighters, consistently recognized for its superior customer service and a high quality, broad product line. The Company manufactures and supplies custom fire fighting turnouts, EMS, search and rescue, wild lands and proximity apparel, as well as gloves, hoods, boots and accessories throughout the United States, Canada and South America.
As a result of the transaction, Fire-Dex provided liquidity to its previous junior capital providers and facilitated continued growth of the business with a new financial partner, Peninsula Capital Partners L.L.C. (“Peninsula”) through its Peninsula Fund V L.P., which provided subordinated debt and preferred equity.
JPMorgan Chase Bank provided the senior secured credit facility. The recapitalization was structured to allow Bill Burke, Chairman and majority shareholder, to acquire an increased equity ownership position and provide a strong financial partner to facilitate the continued growth of the business.
Mr. Burke said, ”Western Reserve ultimately delivered significant value to Fire-Dex’s shareholders. Their knowledge of our industry and attention to detail at every stage were essential to achieving an outcome much better than I had anticipated at the outset of the process. We are now well-positioned with a strong financial partner to capitalize upon our growth strategy.”
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THE ASTRUP COMPANY
Western Reserve acted as exclusive financial advisor to The Astrup Company in its sale to Glen Raven, Inc.
Founded in 1876 and based in Cleveland, Ohio, Astrup is the leading distributor of outdoor, recreational, industrial and technical fabric, hardware and trimmings to the awning, marine and casual furniture industries in the U.S. Over the past 130 years, Astrup has evolved from a single-facility sail manufacturer to the leading national specialty fabric distributor with, at the time of the transaction, 11 sales and distribution centers located throughout the U.S. In addition, Astrup is a significant equity holder in two leading specialty fabric distributors in both Canada and Mexico, making the company a virtual one-stop shop for customers throughout North America.
The shareholders of Astrup elected to explore a potential sale of the company to its largest supplier, Glen Raven, who had enjoyed a business relationship with Astrup for more than a century. Astrup retained Western Reserve as its exclusive investment banker who advised the company throughout the transaction.
Based in Burlington, North Carolina, Glen Raven markets performance fabrics in more than 100 countries worldwide. Concurrent with the Astrup transaction, Glen Raven acquired John Boyle & Co., another leading manufacturer and distributor of specialty fabrics who was also a major customer of Glen Raven’s and who, like Astrup, continued to operate as a wholly-owned subsidiary. Post-transaction, Astrup continued to be led by its President and Chief Operating Officer, Jeffrey W. Kirk. John H. Kirk, Astrup’s Chairman and CEO, retired at the close of the transaction.
John Kirk said, “The team at Western Reserve worked diligently with us through the many details and nuances of the transaction and created significant value for Astrup’s shareholders. I’ve known the firm for many years, and they are truly dedicated to providing superior service to their clients.”
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REESE CENTRAL WHOLESALE, INC.
Western Reserve acted as exclusive financial advisor to Reese Central Wholesale, Inc. in its recapitalization by Bank of America Business Capital.
Reese is a leading distributor of roofing, siding and other building products in the state of Indiana. The company is headquartered in Indianapolis, Indiana and also operates eight other branches throughout the state. Reese’s products are used in a variety of applications, including new home construction, replacement roofing and large commercial projects.
Western Reserve worked with Reese’s senior management team and advisors to refinance the company’s existing credit facilities and recapitalize the business. The new capital structure was comprised of a senior secured revolving facility and term loan and enabled Reese to refinance existing indebtedness and establish access to additional capital to finance continued growth of the company.
John Reese, Chief Executive Officer and primary owner of Reese, commented, “We were very pleased with both the strategic and technical advice Western Reserve provided us in executing this transaction. Their expertise and dedication from start to finish resulted in a well-structured and flexible financing for our company.”
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LESCO, INC. (MANUFACTURING AND DISTRIBUTION OPERATIONS)
Western Reserve acted as financial advisor to LESCO, Inc. (NASDAQ: LSCO) in the sale of its manufacturing and distribution operations to Platinum Equity Partners, LLC.
LESCO, headquartered in Cleveland, Ohio, is the largest provider of products for the professional turf care segment of the green industry. The company’s consumable turf care manufacturing and distribution operations represented nearly 80% of LESCO’s annual net sales.
In an effort to improve shareholder value, LESCO’s Board of Directors engaged Western Reserve to divest the company’s manufacturing and distribution operations. This would enable LESCO to harvest its working capital and utilize the proceeds to invest in its retail operations, pay down debt and return cash to shareholders. Management could then execute on a focused, highly profitable professional retail strategy that should be well received by Wall Street.
LESCO’s manufacturing and distribution operations were acquired by Platinum in October 2005. Platinum, a Los Angeles, California private equity firm, was selected based on its recognized track record of success in corporate carve-outs, shared vision for the business and unique expertise in creating supply chain efficiencies. In conjunction with the transaction, LESCO secured a long-term supply arrangement with Platinum for the manufacturing and distribution of its turf care products on favorable terms.
LESCO President and Chief Executive Officer Jeffrey Rutherford said, “The entire Western Reserve team did a terrific job in a very complex transaction. We greatly valued their creativity, strategic advice and execution capabilities.”
In May 2007, Western Reserve acted as financial advisor to LESCO in its sale to Deere & Company (NYSE: DE).
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GRAMMER INDUSTRIES, INC.
Western Reserve Partners served as the exclusive investment banker to Grammer Industries, Inc. in its recapitalization by Linx Partners, LLC. The transaction was led by Managing Director Joseph Carson and Director Kevin White of Western Reserve’s Industrial Group, supported by Vice President Matthew Mueller and Associate Thomas Creegan.
Grammer is a leading hauler of bulk hazardous and non-hazardous materials, known for its expertise in transporting anhydrous ammonia. Headquartered in its namesake town of Grammer, Indiana, the company is regarded for its industry-leading safety record, top-quality fleet and superior customer service. Grammer serves customers operating in industries such as agriculture, chemical manufacturing, energy production and fertilizer production.
Mr. Carson said, “We are proud to represent Grammer’s shareholders and delighted that we were able bring the Linx and Grammer teams together in this transaction.” Mr. White added, “With significant experience in the transportation and hauling industry, Linx will be a great partner for Grammer. The partnership will undoubtedly allow Grammer to bolster its position of leadership in the industry.”
Charles “Shorty” Whittington, Founder and CEO of Grammer, will continue to serve as the company’s CEO. Mr. Whittington stated, “I am impressed with Linx’s knowledge of the industry and commitment to growing this business. This company has a very bright future.” Mr. Whittington remarked, “The leadership and advocacy of Western Reserve resulted in an optimal outcome for Grammer’s shareholders and management team.”
Peter Hicks, Managing Director and Founder of Linx Partners, commented, “Linx Partners looks forward to building on the Company’s success and establishing Grammer as the leader in the domestic hauling of anhydrous ammonia and other bulk hazardous liquids. We appreciate Western Reserve’s professionalism and dedication to executing this transaction.”
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Western Reserve acted as exclusive financial advisor to Yoder Brothers, Inc. in its divestiture of certain assets to Syngenta AG (NYSE: SYT).
From modest beginnings as a partnership of two, hardworking Mennonite brothers – Menno and Ira Yoder – the company has evolved into a world leader in flowering research and breeding. Today, almost 90 years after its founding, Yoder, a privately-held company based in Barberton, Ohio, is the world’s leading breeder and propagator of all types of chrysanthemums, including potted mums, garden mums, spray mums and Fleurettes. The company is also a leading propagator and marketer of perennials, asters, azaleas, hibiscus, gloxinias, lisianthus, poinsettias and pot roses.
Beginning in early 2007, Yoder’s Board of Directors began exploring strategic alternatives to strengthen the company’s financial position and achieve long-term value for the business and shareholders. After several rounds of preliminary discussions with certain strategic parties, senior management and the Board of Directors elected to pursue a sale of Yoder to Syngenta. Headquartered in Basel, Switzerland, Syngenta is a world-leading agribusiness committed to sustainable agriculture through innovative research and technology.
Western Reserve was engaged by Yoder’s Board of Directors to represent the company in negotiating a letter of intent with Syngenta and assist senior management through the closing process. The form and scope of the purchase offer changed several times during the course of due diligence, and Western Reserve worked closely with management in evaluating the relative value and benefits of Syngenta’s proposals. Western Reserve led the way in negotiating, on behalf of management, a favorable transaction for Yoder’s shareholders, which involved the sale of certain assets and intellectual property related to the genetics, development, breeding, production, marketing and sale of the company’s potted and garden mum and asters product lines. The transaction allowed Yoder to strengthen its balance sheet and management to focus resources on creating significant brand value for its remaining ornamental lines.
Yoder’s Chief Executive Officer Bill Rasbach commented, “The Western Reserve team did an excellent job of advising our board of directors through this complex divestiture and creating significant value for our shareholders, employees and customers going forward.”
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Western Reserve acted as exclusive financial advisor to the G.C. Hanford Manufacturing Co. (d/b/a Hanford Pharmaceuticals) in the divestiture of its cephalosporin finishing facility to Steri-Pharma LLC.
Founded by George C. Hanford in 1846 and based in Syracuse, New York, Hanford Pharmaceuticals is the only U.S.-based independent contract antibiotic finisher, specializing in the sterile filling of injectable antibiotics. The company also fills proprietary veterinary products and provides ancillary product development and support services for its customers.
Western Reserve was engaged by the Board of Directors to assist them in exploring strategic alternatives that would strengthen Hanford’s financial position and achieve long-term value for the business and shareholders. After several rounds of preliminary discussions with certain strategic parties, the Company elected to pursue a sale of its cephalosporin finishing facility to Steri-Pharma LLC, a Paramus, New Jersey-based sterile pharmaceutical finisher. Steri-Pharma is a subsidiary of ACS Dobfar spa, a top five producer and exporter of bulk cephalosporins and penicillins. Proceeds from the divestiture were used to pay down Hanford’s debt and reinvest in the remaining business.
George W. Hanford, Chief Executive Officer of Hanford, said, “Western Reserve did an outstanding job of evaluating our alternatives and advising us through all stages of the transaction.”
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Distributor of automotive paints to the automotive collision repair industry
Provided fairness opinion for the repurchase of common stock
Manufacturer, wholesaler and distributor of branded and private label potato salads and other foods
Independently managed distributor of branded metalworking consumables and related products to industrial manufacturers
Sold to: Mr. Cedric Beckett (Detroit, MI)
Distributor of natural gas across five Northwest Ohio counties
Retailer and distributor of groceries
Western Reserve Partners served as the exclusive financial advisor to R. Thompson Trucking, Inc., a portfolio company of Linx Partners, LLC, in its sale to RLJ Equity Partners, LLC. The transaction closed on December 31, 2012 and was led by Managing Partner Ralph Della Ratta, Director Kevin White and Vice President Matthew Mueller of Western Reserve’s Industrial Group, who were supported by Associate Thomas Creegan and Analyst Gregory Hill.
Thompson Trucking is a top provider of industrial logistics solutions, serving both commercial and governmental customers in the Mid-Atlantic region. With its market-leading fleet, the Company hauls a wide range of commodities, including aggregates, scrap metal and non-hazardous waste for customers in industries such as construction, industrial recycling and waste collection and disposal.
“We are proud to have represented Thompson’s shareholders in this transaction. With its familiarity with the Mid-Atlantic market and track record of operating successful businesses, RLJ Equity Partners is an excellent partner for the company,” Mr. Della Ratta stated.
Mr. White, who leads Western Reserve’s transportation and logistics practice, remarked, “Thompson’s diverse, flexible fleet and outstanding customer service are unrivaled by those in its peer group. Western Reserve welcomed the opportunity to represent such a market leader.”
The company’s existing management team, including President and CEO Richard Thompson, all will continue to serve in their current capacities. Mr. Thompson reflected, “I appreciate Linx’s stewardship in helping to grow this company, and I am excited to team with RLJ to expand our presence in the Mid-Atlantic region and along the East Coast. I am grateful for Western Reserve’s leadership and role in executing this transaction.”
Edward Leinss, Managing Director and Founder of Linx Partners, stated, “Linx Partners is pleased to realize another successful investment for the firm. Linx greatly values its relationship with Western Reserve and is particularly satisfied with the results achieved in this transaction.”
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