Narrow Gauge Capital has acquired a majority stake in The SEI Group, an installer of residential building products for builders and general contractors. Siguler Guff and Goldman Sachs co-invested alongside Narrow Gauge Capital.
The SEI Group installs insulation, gutters, garage doors, fireplaces, housewrap, door hardware and mailboxes at single-family and multi-family residential construction projects in the Atlanta metropolitan area. The company, based northeast of Atlanta in Doraville, GA, was founded in 2008 and has about 200 employees (www.seigroupga.com).
Post-closing, Eric Cunningham and Matt Hopkins, the existing owners of SEI, will retain their current management positions and have an ownership stake in the company. In addition, Joseph Carrington, the former CEO of Service Partners and EVP of Insulation for Masco Services Group, has also invested in the company and will join the executive committee of the board of directors. “SEI stands out as an impressive and well-managed company among the many I have evaluated over the course of my career in the insulation industry,” said Mr. Carrington. “I believe that SEI has an opportunity to continue its growth in the Atlanta market, while also expanding its geographic footprint through acquisitions.”
Narrow Gauge Capital (NGC) was formed in March 2015 by a group of professionals who previously invested with Monitor Clipper Partners. NGC invests from $10 million to $50 million of equity in transactions where an existing founder or family retains a meaningful ownership stake. Specific sectors of interest include health care services, financial services technology, building products, distribution and logistics. NGC is based in Boston (no website found).
“Since founding SEI in 2008, Eric and Matt have built a tremendous installation business in the Atlanta market. SEI’s focus on its customer service differentiates the company from its competitors, and has driven impressive growth over the past eight years,” said Adam Doctoroff, a partner at NGC.
“We are excited to be entering the next phase of SEI’s growth and are delighted to join forces with Narrow Gauge,” said Mr. Hopkins, CEO of SEI. “We selected them as our partner due to their deep understanding of our market and strong track record of investing alongside owner-operators like us.”
In addition to its equity co-investment, Goldman Sachs (www.gs.com) provided senior debt financing to support the acquisition. Capital Solutions Group (www.thecapitalsolutions.com), led by Brad Stewart, advised NGC on the debt financing.
Croft & Bender (www.croft-bender.com) was the financial advisor to SEI. Winston & Strawn (www.winston.com) served as legal counsel to NGC and Taylor English Duma (www.taylorenglish.com) served as legal counsel to SEI.
© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 5-10-16