Private equity firm Grey Mountain Partners, Boulder, CO, is acquiring the U.S. industrial-products distribution unit of British building products supplier SIG plc for $51 million in cash. The business is a distributor of industrial products with 300 employees in more than 20 branch locations from Texas to Maryland and more than $130 million in annual revenue.
SIG has three primary business units: insulation, roofing and commercial interiors, and specialist construction and safety products. The U.S. operations include several businesses, including SIG Southwest serving gulf coast markets, and BWI Distribution, Inc. serving east coast markets. BWI was founded in 1957 and became a subsidiary of SIG/USA in 1999.
Grey Mountain Partners plans to make additional investments into distribution sectors, according to Senior Associate Ben Ault. ‘The strategy will be to grow organically by outperforming the competition through best-in-class customer service and also to grow through selective, strategic add-on acquisitions. The U.S. business of SIG plc is already a well-established market leader, but the U.S. market was not a priority for the U.K. parent.
We believe the Grey Mountain approach towards working with management to develop aggressive but realistic growth plans will have a positive impact on their efforts to expand and better serve the customer base.’
The deal was funded with an asset-based senior loan through Bank of America NA, and equity. The sale resulted from an auction run by Cobblestone Advisors, a division of investment banking firm Harris Williams & Co., Richmond, VA, and the financial adviser to SIG.
‘Our rate of growth and expansion in the UK, Ireland and Mainland Europe has been such that the U.S. today accounts for less than 4 percent of total Group sales,’ said David Williams, chief executive of SIG. ‘Given the future opportunities for SIG within the UK, Ireland and Mainland Europe, our strategy is to concentrate our resources towards these territories. On this basis, it makes sense for the U.S. business to be allowed to develop outside the SIG Group.’ SIG realizes 68 percent of its revenues from the UK and Ireland, with 28 percent Mainland Europe.
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