ALCOM, a portfolio company of Hudson Ferry Capital and a designer and manufacturer of specialty trailers, has been sold to Valley Ridge Investment Partners.
ALCOM is a manufacturer of open and enclosed aluminum trailers, including cargo haulers, car haulers, snow trailers, flat/open carriers and horse/livestock trailers.
ALCOM’s products are sold through more than 500 dealerships in 51 US states and Canadian provinces, and internationally in China, India and Kuwait. ALCOM was founded in 2005 by CEO Trapper Clark and today operates a 70,000 sq. ft. manufacturing and headquarters facility located 60 miles southwest of Bangor in Winslow, Maine with additional manufacturing operations in Montana and South Dakota.
The company manufactures more than 20,000 trailers per year under its Mission Trailers, SnoPro, CargoPro, E-Z Hauler, Frontier and High Country brands and, under a license agreement, manufacturers Polaris branded aluminum trailers.
Mr. Clark will continue in his role as CEO in partnership with Valley Ridge, and ALCOM’s senior management team and employees will remain in their current positions.
“This is a terrific outcome for ALCOM, our customers, and our employees,” said Mr. Clark. “This investment group has the strategic vision, operational expertise, and financial capacity to help us grow and expand beyond the success we have enjoyed so far. I am excited about the future of our company and optimistic about our ability to expand into new markets and introduce innovative products in the years to come.” New markets identified by ALCOM include light industrial towing and outdoor recreation.
“We couldn’t be happier with the outcome of this transaction,” said Mark Tedford, a managing director of Valley Ridge. “We have assembled an expert group of partners to work with the company’s seasoned management team to build on the success that has been achieved in the first phase of the company’s growth.”
Valley Ridge is an independent sponsor that invests in companies with at least $20 million of revenue and $5 million of EBITDA. The firm was founded in 2018 by its managing directors John Sheffield and Mark Tedford and is headquartered in New Canaan, Connecticut.
The buy of ALCOM is Valley Ridge’s second platform investment and follows its July 2019 buy of National Power, a Raleigh, North Carolina-based designer, installer, and servicer of back-up power systems. Valley Ridge partnered with Tecum Capital and C3 Capital on this transaction.
Landon Capital and Ironwood Capital provided subordinated debt and made equity investments to support Valley Ridge’s buy of ALCOM. People’s United Bank provided additional debt financing.
“We are very excited to partner with Landon, Ironwood, People’s United and Trapper Clark, who will continue to lead the company. All three of our partners have invested together successfully on previous transactions with independent sponsors,” said Mr. Sheffield.
“This is a compelling investment opportunity, supported by a strong management team that has successfully launched three greenfield manufacturing operations in Maine, Montana and South Dakota,” said Chris Sullivan, managing partner of Landon Capital. “We are pleased to be able to partner with Valley Ridge, Ironwood, People’s United Bank and the ALCOM management team to continue the company’s national expansion.”
Landon Capital is the direct private equity investment group of the Landon family and invests in lower middle-market companies that have from $5 million to $20 million of EBITDA. Sectors of interest include healthcare services, business services, niche manufacturing, food, and beverage. The firm was founded in 2015 and has offices in Boston and London.
“Over the next five years, the aluminum market is expected to grow at 7 percent annually compared to 5 percent for the steel alternative,” said Alex Levental, a managing director at Ironwood. “Our investment thesis recognizes this and, in addition to market expansion and the company’s considerable backlog, ALCOM has substantial room to grow by adding new manufacturing sites. These new sites will allow organic growth, build geographic diversity, and broaden the product offering. Additionally, ALCOM has multiple avenues for value creation via new product development, increased penetration with existing dealers and operational improvement.”
Ironwood Capital provides non-control growth capital to middle-market companies. Investments take the form of subordinated debt and minority equity in amounts ranging from $8 million to $25 million to support business owners and financial sponsors. Typical targets will have revenues of $20 million to $200 million and EBITDA of $4 million to $15 million. Ironwood Capital is headquartered in Avon, Connecticut.
Hudson Ferry acquired ALCOM in June 2012 and its transaction team was led by partners Stephen Fisher and Bruce Robertson. Hudson Ferry invests in companies with enterprise values of $15 million to $50 million, revenues of $15 million to $75 million, and EBITDAs of $3 million to $8 million. Sectors of interest include niche manufacturers, business services providers, and outsourcing providers. Hudson Ferry was founded in 2007 and is based in Rye Brook, New York.
Hennepin Partners was the financial advisor to ALCOM on this transaction.
© 2021 Private Equity Professional | January 6, 2021