Gryphon’s Fund V Acquires Vessco

O2 Investment Partners has sold wastewater equipment distributor Vessco to Gryphon Investors.

Vessco is a distributor of parts and equipment used in municipal and industrial water and wastewater treatment projects, and it also provides related systems integration services.

The company’s water treatment services include initial consultation and design, installation assistance, field service and parts delivery. Vessco provides its products and services in over 18 states throughout the Central US, Midwest, Northeast, and Mid-Atlantic regions.

Vessco, founded in 1983, is led by CEO Brian DeWolf and is headquartered near Minneapolis in Chanhassen, Minnesota with an additional office in Ames, Iowa.

O2 acquired Vessco in November 2018. During its two-year ownership term, O2 completed five add-on acquisitions for Vessco that diversified its products and services and expanded its geographic reach.

“Our relationship with the O2 group has been outstanding. They worked very closely with our team and were instrumental in executing our model and exceeding our growth expectations,” said Mr. DeWolf.

“We are grateful to have had the opportunity to partner with Brian DeWolf and the excellent team at Vessco,” said Pat Corden, a partner at O2. “We shared a vision to create an industry-leading business with an emphasis on culture and teamwork. The people at Vessco are best-in-class at every level of the organization, and it was a privilege to work together.”

With the sale to Gryphon, industry executive Jim McGivern will become the executive chairman of Vessco. Mr. McGivern was previously the COO of American Water, CEO of Elster Group and CEO of Sigma Corporation. Members of Vessco’s senior management team, led by Mr. DeWolf, will continue to manage the business and remain significant owners of the company.

“Vessco operates at the nexus of Gryphon’s experience with infrastructure and utility products and value-added distribution businesses,” said Leigh Abramson, a partner and head of the industrial growth group at Gryphon. “We are pleased to partner with Brian, a highly talented and visionary leader, and the other members of the management team. Vessco is poised for rapid growth as it capitalizes on its track record, reputation and know-how to serve its customers.”

San Francisco-based Gryphon makes leveraged acquisitions and growth investments in middle-market companies. The firm invests from $100 million to $300 million of capital in companies with enterprise values ranging from $100 million to $600 million. Sectors of interest include business services, consumer products and services, healthcare, industrial growth, and software. In July 2019, the firm held a final closing of Gryphon Partners V LP at its hard cap of $2.1 billion. The new fund was oversubscribed and exceeded its original target of $1.5 billion.

O2 makes control investments in companies with EBITDAs from $4 million to $15 million located anywhere in the US and Canada with a preference for companies based in the Midwest or the Great Lakes regions. Sectors of interest include B2B services, technology, niche industrial companies, services, distribution, and certain special situations. O2, based in the Detroit suburb of Bloomfield Hills, is backed by the Orley family which has been investing in operating businesses and real estate since 1950.

Gryphon was advised by the water investment banking group, led by managing directors Brendan Tierney and Andy Schwartz, at Raymond James. William Blair was the financial advisor to Vessco and O2 on this transaction.

© 2020 Private Equity Professional | November 19, 2020

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