Sun Capital Partners has agreed to acquire Select Interior Concepts, a distributor of interior building products for $411 million in cash.
Until June 30, 2021, Atlanta-headquartered Select Interior Concepts (NASDAQ: SIC) operated through two segments, Residential Design Services (RDS) and Architectural Surfaces Group (ASG). The RDS segment was sold in June to Interior Logic Group, a California-based provider of flooring and other interior finishes and a portfolio company of Blackstone since February 2021, for $215 million.
The company’s remaining ASG segment – headquartered in Austin, Texas – imports and distributes natural and engineered stone slabs, such as marble, granite, porcelain, and quartz for kitchen and bathroom countertops; and ceramic and porcelain tiles for flooring and backsplashes.
The ASG segment serves the new residential and commercial construction markets, and the repair and remodel market and sells its products through a network of 21 distribution centers and showrooms.
In FY 2020, the ASG segment had revenues of $221 million and an adjusted EBITDA of $23.5 million which equates to a 17.5x valuation multiple. As background, for FY 2020, the RDS segment had revenues of $332.5 million and an Adjusted EBITDA of $16.7 million. This equates to a 12.8x valuation multiple.
“After thorough and thoughtful deliberations in consultation with our financial advisors, we are pleased to enter into a definitive sale agreement with an affiliate of Sun Capital,” said Brett Wyard, the chairman of SIC. “In making this decision, the board considered the current state of the business and its outlook and opportunities. We believe this path is in the best interests of our shareholders, providing them with immediate and substantial value for their investment.”
“We have long been an active investor in the building materials sector, and have been impressed by SIC’s track record, ability to deliver for customers and overall industry vision,” said Jeremy Stone, a managing director at Sun Capital. “We are excited to support SIC’s strong management team in the next stage of growth, capitalize on new opportunities and drive success.”
RBC Capital Markets and Truist Securities were the financial advisors to SIC, and Raymond James was the financial advisor to Sun Capital.
Sun Capital invests in leveraged buyouts, equity, and debt in companies that can benefit from its in-house operating professionals and experience. The firm has invested in and managed more than 425 companies worldwide with combined sales of more than $50 billion since its inception in 1995. Sun Capital has offices in Boca Raton, Los Angeles and New York, and an affiliate office in London.
© 2021 Private Equity Professional | August 12, 2021
