After a Dozen Add-Ons, Incline Sells AFC to Bertram

Incline Equity Partners has sold AFC Industries to Bertram Capital. The buy of AFC is the fifth platform investment made through Bertram’s fourth fund.

AFC distributes fasteners and other class C-parts – cable ties, fittings, springs, gaskets, hinges, keys, and latches – that are used by OEMs in their assembly operations. C-parts typically include low-priced and bulk-handled materials, that have high procurement costs compared to value.

AFC also provides supply chain management services, vendor-managed inventory programs, and other services including kitting, packaging, and assembly. Many of AFC’s customers are active in the general industrial, medical, electric utility, flow control, and scientific instrument sectors.

AFC, led by CEO Kevin Godin, has 22 stocking locations across North America and is headquartered north of Cincinnati in Fairfield, Ohio. Incline acquired AFC in March 2015 from Rockwood Equity Partners and completed 12 add-on acquisitions during its ownership term.

“Incline has been a value-added partner,” said Mr. Godin. “With Incline’s support, AFC is proud to have become the acquirer of choice in the fragmented C-parts industry. Incline helped us develop a strategy and playbook to accelerate our approach to making acquisitions, having completed 12 acquisitions together. Incline’s experience investing in distribution-related businesses was a great asset to us through our partnership.”

“We are extremely pleased with AFC’s significant accomplishments through our partnership, including more than tripling the size of the business,” said Leon Rubinov, a senior partner with Incline.  “To support such meaningful growth, we made strategic investments to expand the management team, develop global sourcing capabilities and upgrade ERP systems.  AFC is well-positioned for continued success.”

Pittsburgh-based Incline Equity was formed in 2011 and is led by its senior partners, Jack GloverJustin Bertram, and Leon Rubinov. In January 2020, Incline closed its fifth fund, Incline Equity Partners V LP, with nearly $1.2 billion of capital. Incline generally invests in growing companies with enterprise values of $25 million to $450 million.

“AFC has established itself as a real partner to customers through its high-touch and value-added distribution model, alleviating many of the pain points related to sourcing C-parts and inventory management,” said Kevin Yamashita, a partner at Bertram. “AFC’s success reflects the company’s extensive technical and industry expertise, deep domestic and international sourcing network, and vast national distribution footprint.”

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. In February 2021, Bertram acquired Bulk Reef Supply, a Minneapolis-based provider of saltwater aquarium products including lighting, controllers, and plumbing equipment. Bertram is headquartered south of San Francisco in San Mateo, California.

Twin Brook Capital Partners was the administrative agent on debt financing to support Bertram’s acquisition of AFC. 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.

© 2021 Private Equity Professional | April 22, 2021

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