Castle Harlan has completed the sale of IDQ Acquisition Corp., a manufacturer of do-it-yourself automotive aftermarket air conditioning recharge products, to Kinderhook Industries. The sale resulted in a 3.3X gross multiple on Castle Harlan’s original investment.
“Castle Harlan specializes in partnering with management teams to help them accelerate the growth of their businesses by adding capital and strategic guidance,” said Marcel Fournier, senior managing director of Castle Harlan. “Throughout our investment in IDQ, we helped the company through a number of important strategic and operational initiatives, including building consumer awareness of the category, launching a new product line and expanding the company internationally. As a result, the company is well positioned to continue its ongoing and anticipated growth, and we were able to reward our investors with a very satisfactory return.”
IDQ Holdings is a manufacturer of do-it-yourself automotive aftermarket air conditioning recharge products used for servicing and repairing automotive air conditioners. IDQ products, such as air conditioning recharge and retrofit kits, premium refrigerant blends, specialty chemicals, straight refrigerants, and a wide range of complementary DIY and professional-use items, include brand names such as Arctic Freeze, Sub Zero and Super Seal Stop Leak. These products are sold to consumers through approximately 25,000 retail stores including national chains such as AutoZone, Advance Auto Parts, Wal-Mart, O’Reilly, NAPA, Pep Boys, and others. The company also sells a full range of commercial air conditioning products designed for automotive repair shops. IDQ is based in Garland, TX (www.idqusa.com).
Castle Harlan supported IDQ’s programs to build consumer awareness of the category, increase penetration of the do-it-yourself air conditioning market, and convert consumers from commodity products to higher value-added offerings. Under Castle Harlan’s ownership, IDQ developed, tested and launched the A/C PRO product line and rolled out an advertising and awareness campaign that included nationwide television and radio ads, various social media elements and interactive merchandising displays. These efforts were well received by customers and consumers, and the A/C PRO product line is emerging as a leading brand in the category.
“The Castle Harlan team worked closely with CEO Michael Klein, CFO Gerry Rooney and the entire management team,” said Heather Faust, vice president of Castle Harlan and a member of the IDQ Board of Directors during Castle Harlan’s ownership. “We know these executives well and have great confidence that under their leadership the company will continue to grow.”
Castle Harlan invests in controlling interests in the buyout and development of middle-market companies in North America, Europe and, together with CHAMP Private Equity, in Australia. Since its inception, Castle Harlan has invested in more than 53 companies representing more than $11 billion in enterprise value. Castle Harlan currently manages investment funds with equity commitments of $3.5 billion. The firm was founded in 1987 and is based in New York (www.castleharlan.com).
© 2013 PEPD • Private Equity’s Leading News Magazine • 1-9-13
