Bertram Gets Salty with Latest Investment

Bertram Capital has made an investment in Bulk Reef Supply, an online seller of saltwater aquarium products.

Bulk Reef Supply (BRS) is an e-commerce company that carries a full line of saltwater aquarium products including lighting, controllers, and plumbing equipment. BRS was founded in 2007 by Ryan Batcheller and Andrew Duneman and is headquartered near Minneapolis in Golden Valley, Minnesota. The company has just under 100 employees.

BRS has more than 221,000 subscribers to its YouTube channel and has a library of more than 1,300 videos that have been collectively viewed more than 50 million times.

“Bulk Reef Supply has grown to become a trusted authority for ‘reefers’ across the world,” said Ryan Craig, a partner at Bertram Capital. “The company’s YouTube channel educates and entertains millions of saltwater aquarium hobbyists, from novices who are just starting out to the most accomplished experts.”

The investment in BRS is Bertram’s fourth investment for its fourth fund. “We are excited to partner with Ryan and Andrew and the entire BRS team,” added Mr. Craig. “Ryan and Andrew have built a rapidly growing company that represents an excellent platform to apply the Bertram High 5, our value creation strategy, within a unique enthusiast category.”

“The Bulk Reef Supply team is thrilled to have the opportunity to partner with Bertram Capital and find the next evolution of BRS,” said Mr. Batcheller. “During the sale process, Bertram demonstrated a clear understanding of what drives e-commerce enthusiast brands like BRS and how to utilize evolving e-commerce best practices, behavioral data and resources such as Bertram Labs to help unlock further growth opportunities.” (Bertram Labs is the firm’s internal team of engineers, software developers, social media/digital marketing specialists, website designers and graphic artists that provide strategies and technologies to Bertram’s portfolio companies).

“Bulk Reef Supply represents Bertram’s 25th investment in e-commerce businesses,” said Jeff Drazan, the managing partner of Bertram. “BRS represents the quintessential example of a company that has authentically built, matured and grown a base of dedicated consumers who rely on the company to engage, educate, and entertain them, in addition to offering them access to the best products and technology. We believe our proven value creation strategy with e-commerce businesses, enabled by our Bertram Labs capabilities, will support and accelerate the company’s growth over the next several years.”

Bertram invests in middle-market business services, consumer, industrial and manufacturing companies that have revenues from $25 million to $250 million and EBITDA of $5 million to $30 million. The firm is headquartered south of San Francisco in San Mateo, California.

Twin Brook, the middle-market direct lending arm of Angelo Gordon, was the administrative agent on debt financing to support Bertram’s buy of Bulk Reef. Chicago-based Twin Brook focuses on loans to private equity-owned companies with EBITDA between $3 million and $50 million, with an emphasis on companies with $25 million of EBITDA and below. The firm targets senior financing opportunities up to $200 million, with hold sizes across the platform ranging from $25 million up to $150 million. Twin Brook’s products include opportunistic investments in second lien, mezzanine, and equity co-investments.

Minneapolis-based investment bank Franklin Partners, led by Chip Myers and Joel Fischer, was the financial advisor to Bulk Reef Supply on this transaction.

© 2021 Private Equity Professional | February 10, 2021

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