Platinum Equity has signed an agreement to sell NILCO, a wholesale distributor of specialty building materials, to U.S. Lumber, a portfolio company of Madison Dearborn Partners since March 2017. Platinum Equity acquired NILCO in September 2016. The sale is expected to close during the fourth quarter.
NILCO (formerly National Industrial Lumber Company) was founded in 1909 as a supplier of wood based products to manufacturers in the Midwest. In the late 1990s NILCO added building materials product lines and became a supplier to local lumber and building supply dealers serving the residential construction market. Today, NILCO has annual revenue of approximately $200 million and serves more than 2,000 customers through 12 distribution centers in Indiana, Kentucky, Ohio, Pennsylvania, West Virginia and New York. The company, led by CEO Jim Smith, is headquartered near Akron in Hartville, OH (www.nilco.net).
During Platinum’s term of ownership the firm strengthened the senior management team, installed new financial controls and other best practices throughout the organization, expanded the company’s distribution centers and launched new products. As a result, NILCO’s year-over-year revenue is up approximately 9% and EBITDA is up approximately 20% on a trailing twelve month basis.
“Since acquiring the business, Platinum Equity has partnered with the NILCO management team to drive a combination of operational improvements and growth strategies that increased revenue and profitability,” said Platinum Equity Partner Bob Wymbs. “The business is a perfect complement to U.S. Lumber and is well positioned for continued success.”
U.S. Lumber, with over $550 million in revenue, was formed by the merger in 1998 of Atlantic Trading Company and Bestwood Forest Products. The company offers one of the largest inventories of specialty building products in the industry and serves over 4,000 dealers and retail customers in 23 US states from distribution centers in Atlanta, Greenville, Raleigh, Nashville, Jacksonville, Central Florida, Mobile, Baltimore and Boston. The company is headquartered in Atlanta (www.uslumber.com).
Platinum Equity invests in a range of industries including manufacturing, distribution, transportation and logistics, equipment rental, metals services, media and entertainment, technology, and telecommunications. The firm has completed more than 200 acquisitions since its founding in 1995. Platinum is based in Beverly Hills with additional offices in New York and London (www.platinumequity.com).
Platinum Equity is today investing from Platinum Equity Capital Partners IV, a $6.5 billion buyout fund that closed in March 2017. “We are very active in the lower middle market and the NILCO investment is another great example of the firm continuing to create value in that space,” added Mr. Wymbs.
“Partnering with Platinum helped transform our business,” said Mr. Smith. “They invested in our growth and delivered the tools we needed to operate more effectively. Platinum’s operational expertise and mentorship allowed us to transition from a family-owned business into a highly efficient enterprise that is well prepared to take the next step.”
© 2017 Private Equity Professional | September 19, 2017
