Kinderhook Industries has agreed to acquire Gulf Tanks Holdings (Tank and Pump) from publicly traded WillScot Mobile Mini at an enterprise value of $323 million.
Tank and Pump operates in the specialty containment sector and is a provider of logistics-based environmental services used to store, separate, and transport liquid and solid industrial waste.
For the trailing twelve months ending June 30, 2022, the Tank and Pump segment had revenues of $122 million and adjusted EBITDA of $47 million. Based on the $323 million enterprise valuation, this equates to a valuation multiple of 6.9x. More information can be found on page 37 of WillScot’s second quarter investor presentation (click HERE).
Tank and Pump operates a network of 24 branches and is headquartered just east of Houston in Baytown, Texas. At the closing of the transaction, Eric John, a senior vice president of Tank and Pump, will become the chief executive officer of Kinderhook’s new Tank and Pump platform.
“The Tank and Pump team is excited to launch an aggressive growth strategy for our business with Kinderhook’s support,” said Mr. John. “We will remain true to our roots of providing dependable, best-in-class environmental solutions for our customers while also expanding the breadth and depth of those solutions. Our expansion will be fueled by investments in fleet, new locations, and completing add-on acquisitions.”
WillScot Mobile Mini (NASDAQ: WSC), the seller of Tank and Pump, leases modular space and portable storage units, sold under the WillScot and Mobile Mini brands, to companies operating in the commercial and industrial, construction, education, energy and natural resources, and government markets. The company has approximately 390,000 total units, which include 162,000 modular space units; 213,000 portable storage units; 13,000 tank and pump units; and 2,000 other units. WillScot Mobile Mini, led by CEO Brad Soultz and President and CFO Tim Boswell, was founded in 2017 and is headquartered in Phoenix.
“We are eager to partner with Eric and the Tank and Pump team to grow the company while continuing to provide best-in-class service to its customers,” said Rob Michalik, a managing director of Kinderhook. “We will actively deploy capital in organic growth to better serve the ongoing needs of the company’s customers and also look to grow through acquisition. It was a pleasure to work with Brad Soultz and Tim Boswell to execute this transaction, and we look forward to future opportunities to transact and partner with WillScot.”
New York City-based Kinderhook makes control investments in companies with transaction values of $25 million to $150 million in which the firm can achieve financial, operational and growth improvements. Sectors of interest include healthcare services; environmental and business services; and automotive and light manufacturing. The buy of Tank and Pump is Kinderhook’s 79th environmental/business services transaction and the 17th carve out from a public company since the firm’s founding in 2003.
Financing for the transaction was provided by a debt syndicate led by Twin Brook Capital Partners. 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.
BofA Securities was the financial advisor to WillScot Mobile Mini and Oppenheimer & Co. was the financial advisor to Kinderhook.
The acquisition of Tank and Pump is expected to close in the third quarter of 2022.
© 2022 Private Equity Professional | August 25, 2022
