Norwest Invests in Arteriors
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Norwest Invests in Arteriors

Norwest Equity Partners has made an investment in Arteriors, a designer and supplier of lighting fixtures, furniture and accessories.

Arteriors’ 1,300 SKUs of lighting fixtures, furniture, wall décor and accessories are manufactured through a third-party network of artisanal factories. Customers of the company include residential and commercial interior designers and specialty retailers. Arteriors was founded in 1987 by Mark Moussa and is led by CEO Steve Davis. The company operates showrooms in Dallas (headquarters), Los Angeles, London, and New York (www.arteriorshome.com).

NEP’s investment is the first institutional capital for Arteriors. “After 30-plus years as a founder-owned business, our entire team is excited for our investment partnership with NEP which will help us prioritize and resource our strategic initiatives and provide capital for growth,” said Mr. Moussa.

“Arteriors is a terrific fit for our consumer product and distribution investment platform,” said Jason Sondell, a principal at NEP. “As part of large, growing, and fragmented segments of the lighting and furnishings market, the company is well-positioned to grow its market share based on its strong design, longstanding relationships with a global collection of artisanal manufacturing partners, and first-class customer service. We are partnering with Mark and his entire management team in this transaction who have built a tremendous platform for growth.”

“Bringing in an investment partner is a big decision, but we know that NEP is the right partner for us. We fit together culturally, and our work styles are complementary,” said Mr. Davis. “I also know that all of the foundational work we’ve accomplished over the last five years, from augmenting our team, to evolving our brand, to implementing scalable processes, to investing in capacity and technology have helped position us for a bright future with NEP by our side.”

Tim Kuehl and Tony Armand, two partners at NEP, will join the Arteriors board of directors. Both have experience in the decorative products industry, and they were board members at Momentum Textiles, an Irvine, CA-based distributor of fabrics to commercial furniture manufacturers, and architectural and design firms, which NEP owned from August 2011 to April 2016.

“Arteriors’ ownership structure, business model, and growth plans all create a trifecta of quality attributes for a NEP investment opportunity,” said Mr. Kuehl. “Personally, I am excited to leverage our portfolio learnings and successes to work together again with Tony, Jason, and the rest of the NEP team to help Arteriors continue to build on its already fantastic foundation and solid infrastructure. The combination of our investment team experience and Arteriors’ ability to consistently offer premium products, highly-efficient distribution, and an amazing culture and brand will further support the company’s growth and drive it to the next level.”

NEP makes equity investments of $30 million to $250 million in companies that have more than $10 million in EBITDA. Sectors of interest include agriculture, business services, consumer, distribution, industrials, energy, and healthcare. In April 2015, NEP closed Norwest Equity Partners X LP, a $1.6 billion fund and Norwest Mezzanine Partners IV LP, an $800 million fund formed by NEP’s affiliated mezzanine investment firm, Norwest Mezzanine Partners. NEP is based in Minneapolis (www.nep.com).

Hancock Capital Management and Bank of Ireland provided senior debt financing, and Norwest Mezzanine Partners provided subordinated debt financing.

PJ Solomon was the financial advisor to Arteriors.

© 2019 Private Equity Professional | June 25, 2019

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