Center Rock Acquires Merit Distribution

Center Rock Capital Partners has acquired The Merit Distribution Group from Centre Lane Partners which acquired the company in August 2011.

Merit is a national distributor of paint sundries, flooring products, and related installation supplies with more than 30,000 SKUs from approximately 600 manufacturers. Company-owned brand names include Lancaster (paint sundries) and EJ Welch (flooring products and supplies). Merit’s more than 11,000 customers include national, regional, and independent paint chains; home improvement centers; hardware stores; lumberyards and drywall yards. The company, led by CEO Mitch Jolley, was founded in 1953 and is headquartered in Spartanburg, SC with 10 distribution centers and 23 branch locations (www.lancasterco.com) (www.ejwelch.com).

“The Merit team has worked hard to successfully enter new product categories and penetrate new territories,” said Mr. Jolley. “Center Rock’s team demonstrated a deep understanding of our company’s capabilities, product portfolio, and customer-centric culture. With Center Rock as our partner, we are eager to pursue further growth via organic initiatives and acquisitions.”

“Mitch and Merit’s management team have built a market leading and scalable platform in paint sundries and flooring products distribution. With an extensive geographic reach and sophisticated systems, Merit meets its customers’ critical supply chain needs more efficiently and effectively than its competitors,” said Ian Kirson, a partner at Center Rock.

Center Rock makes control and non-control equity investments in North American-based industrial manufacturing, industrial services and industrial distribution companies that have revenues of $25 million to $500 million and EBITDA of up to $50 million (including negative EBITDA). The buy of Merit is the third platform investment for Center Rock’s first fund which closed in September 2018 with $580 million of limited partner capital commitments. Center Rock was founded in August 2017 and has offices in Chicago, IL and Bloomfield Hills, MI (www.centerrockcp.com).

“Mitch and his team have demonstrated an unwavering commitment to Merit and have done a tremendous job growing their business. We are excited to support Mitch and his team in every way,” said Terry Theodore, a partner at Center Rock.

Centre Lane, the seller of Merit, makes debt and equity investments of $5 million to $250 million in North American middle market companies that have revenues from $20 million to $500 million. The firm will consider both control and minority investments. Centre Lane invests across a range of industries and is effectively industry agnostic. The firm is headquartered in New York (www.centrelanepartners.com).

© 2019 Private Equity Professional | April 8, 2019

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