Atlas Has Big Return on Erickson Sale

Atlas Holdings has closed its sale of Erickson Construction to the US subsidiary of Asahi Kasei Homes for a purchase price of $106 million.

Erickson provides residential framing products and services to homebuilders in Arizona, California and Nevada. The company’s customers range from single-family local and regional homebuilders to large-scale, national residential and multifamily builders.

Erickson operates its own lumber and panelization yards (located in Arizona, California and Nevada) in which the majority of its computer-designed wall panels, trusses and framing components are pre-fabricated. The company, led by CEO Rich Gallagher, is headquartered in Chandler, AZ and has more than 1,000 employees (www.ericksoncompanies.com).

Atlas Holdings formed Erickson in November 2012 when it acquired the Erickson Framing division of Masco Corporation. At the time of acquisition, Erickson had been experiencing significant losses as a result of the dramatic decline in home building during the Great Recession. Atlas acquired Erickson with no third-party indebtedness and provided the company with significant liquidity to ensure its sustainability until conditions in the US housing market stabilized. Atlas and the Erickson management team implemented a turnaround plan and returned the company to profitability in 2015 with continued growth since then in both revenues and EBITDA.

Including previous distributions, the sale of Erickson generated a 5x multiple on invested capital and an IRR in excess of 40 percent.

Atlas is an industrial holding company that operates in a number of sectors and its portfolio companies generate in excess of $5 billion in revenues annually. The company was founded in 2002 and is headquartered in Greenwich, CT (www.atlasholdingsllc.com).

“This sale marks the culmination of Erickson’s remarkable transformation into a strong, profitable enterprise that sustainably outpaces its competitors,” said Sam Astor, Partner at Atlas Holdings. “Consistent with our broader approach, Atlas invested in Erickson as long-term owners. Atlas has consistently believed in what Erickson could become as a result of the company’s differentiated business model and our strong partnership with the Erickson management team. We are pleased that Asahi Kasei is committed to taking Erickson to even greater heights and are confident that Asahi is the right owner for the next chapter of the Erickson story.”

Asahi Kasei Homes (AKH) is part of the Asahi Kasei Group, a diversified group of companies led by Asahi Kasei Corp. (TSE: 3407). AKH has significant homebuilding experience with a presence in Japan and Australia, and Erickson will be the company’s first investment in the new home construction industry in the United States.

B. Riley FBR (www.brileyfbr.com) was the financial advisor to Erickson Construction on this transaction.

© 2018 Private Equity Professional | December 3, 2018

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