Fairway Building Products, a portfolio company of Argosy Investment Partners, has acquired Carfaro, a manufacturer of aluminum railings used in residential and commercial buildings.
The buy of Carfaro is the first add-on acquisition for Fairway – a manufacturer of railing systems for residential and commercial decks – since being acquired by Argosy in September 2014. Argosy’s objective is to build the Fairway platform into a provider of a complete line of railing products to multiple end markets.
In addition to manufacturing aluminum railings, Carfaro also provides drafting, estimating, engineering, and installation services. Customers of Carfaro include 8 of the 10 largest homebuilders in the country including Toll Brothers, Pulte Homes, and Lennar Homes as well as home improvement contractors, international general contractors, and architects. The company was founded in 1994 by Joseph Carfaro, President, and operates out of a single manufacturing facility in Trenton, NJ (www.carfaro.com).
According to Argosy, Mr. Carfaro has created in-house automated manufacturing and production capabilities which differentiate Carfaro from its competition. These capabilities have allowed Carfaro to build relationships with local and regional contractors for quality, on-time deliveries which have made it an entrenched supplier.
To complete the Carfaro acquisition, Argosy made a follow-on investment in Fairway through its fourth fund, Argosy Investment Partners IV, LP, a $180 million fund which closed in June 2010. In April 2015, Argosy held a final closing of Argosy Investment Partners V, LP with $300 million of capital commitments.
Argosy invests from $5 million to $15 million in lower middle market companies that have revenues of $10 million to $100 million and EBITDA margins of 10% or greater. Sectors of interest include manufacturing, business services, and value-added distribution. The firm was founded in 1990 and is headquartered in the Philadelphia suburb of Wayne, PA (www.argosycapital.com).
Citizens Bank (www.citizensbank.com) and Graycliff Partners (www.graycliffpartners.com) – the incumbent lenders that provided the debt financing for the buy of Fairway Building Products – provided senior and subordinated financing, respectively, to finance the Carfaro acquisition.
© 2015 PEPD • Private Equity’s Leading News Magazine • 7-16-15
