Kian Hits 5.5x Return on Sale of Empire

After a four year hold, Kian Capital has sold Empire Group, a wholesale distributor of commercial foodservice equipment, to PNC Riverarch Capital.

Customers of Empire include more than 5,500 foodservice equipment dealers, service organizations, buying groups and national chain accounts. The company, led by CEO Jim Kirkland and CFO Keith Bilyeu, was founded in 1985 and operates through seven locations with a headquarters in Raleigh, North Carolina.

Kian Capital acquired Empire Group (then Empire Equipment Company) in December 2015 in partnership with Crescendo Capital Partners, Stewart Capital Management, and members of the company’s management team.

During Kian’s just over four years of ownership, the company completed three add-on acquisitions which in addition to tripling the company’s revenue and EBITDA, gave it nationwide capabilities and greater scale in the fragmented wholesale foodservice equipment industry. The three add-on acquisitions were Pacific Marketing Associates, a California-based wholesale distributor of commercial foodservice equipment (June 2019); TruTemp Equipment, an Arizona-based distributor of commercial foodservice equipment (May 2018); and Norm’s Refrigeration, a California-based distributor of commercial foodservice equipment (May 2018).

“Kian’s leadership, while always being genuine and supportive to the entire team, helped drive alignment in our quest to realize the full potential of this business,” said Mr. Kirkland. “Not only did they help us expand the depth of our executive team, but they helped create a metric-driven organization that was fundamental to building our platform for growth. Without their guidance, it would have been very difficult to have successfully integrated three acquisitions and to scale so quickly.”

According to a source familiar with this transaction, the sale of Empire to PNC Riverarch provides Kian with a 5.5x return on its invested capital.

“At all levels of the organization, Empire worked as a team with determination and hard work to build a company we are all proud of – a leader among foodservice equipment wholesale distributors,” said Kevin McCarthy, co-founder and partner at Kian. “Jim Kirkland, Keith Bilyeu and the rest of the team have been a pleasure to work with, and we believe the Empire platform is well-positioned for its next chapter of growth. On behalf of Kian, we thank them for their efforts and wish them continued success with PNC Riverarch going forward.”

Pittsburgh-based PNC Riverarch invests from $10 million to $50 million in privately-held companies headquartered throughout North America. Sectors of interest include outsourced services, specialized manufacturing, and value-added distribution. PNC Riverarch is a division of PNC Capital Finance, which in turn is a subsidiary of The PNC Financial Services Group (NYSE: PNC).

Charlotte and Atlanta-based Kian Capital makes both control and minority investments of $7 million to $30 million of equity and subordinated debt in companies that have revenues of $10 million to $100 million and EBITDA of $2 million to $15 million. Sectors of interest include consumer, services, specialty manufacturing and value-added distribution. In March 2018 the firm held a final hard-cap closing of KMP II LP with total capital of $275 million.

Metronome Partners was the financial advisor to Empire on this transaction.

© 2020 Private Equity Professional | February 11, 2020

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