Norwest Equity Partners (NEP) has sold its portfolio company, Momentum Group, a distributor of commercial textiles, to the Riverside Company. This is the second time that Riverside has acquired a majority equity interest in Momentum.
Momentum Group distributes fabrics to commercial furniture manufacturers as well as architectural and design firms that serve the office, hospitality, education and healthcare markets. The company is led by its CEO Roger Arciniega and has 150 employees. Momentum Group is headquartered in Irvine, CA (www.themomgroup.com)
Riverside first acquired Momentum in August 2006 and after a five-year hold sold it to NEP in August 2011. Riverside realized a 4.9x gross cash-on-cash return and a 35% gross IRR. During the term of NEP’s nearly five-year hold, the company doubled its EBITDA organically and significantly grew revenue. Strategic improvements initiated and managed by NEP included new product development, better sales process and tracking, and expanded marketing.
“NEP has been a true partner to the Momentum team, providing an insightful balance of challenge, support and latitude enabling us to consistently outperform expectations,” said Mr. Arciniega. “Long-term mutually beneficial relations are at the core of NEP success, and there is no question that NEP is one of the very best at what they do.”
NEP makes equity investments of $30 million to $150 million in companies operating in the agriculture, applied technology, business services, consumer products and services, distribution, diversified industrials, and healthcare sectors. In April 2015, NEP closed Norwest Equity Partners X, LP, a $1.6 billion fund and Norwest Mezzanine Partners IV, LP, an $800 million fund formed by NEP’s affiliated mezzanine investment firm, Norwest Mezzanine Partners. Norwest Equity Partners is headquartered in Minneapolis (www.nep.com).
The Riverside Company is a global private equity firm focused on investing in and acquiring growing businesses valued at up to $300 million. Since its founding in 1988, Riverside has invested in more than 420 transactions. The firm’s international portfolio includes more than 80 companies. Riverside is headquartered in New York with additional offices in Atlanta, Chicago, Cleveland, Dallas, Los Angeles, San Francisco, and London (www.riversidecompany.com).
Maranon Capital (www.maranoncapital.com) was the agent for a mezzanine debt investment that supported the acquisition by Riverside. Maranon also made an equity co-investment.
Charlotte-based investment bank BlackArch Partners (www.blackarchpartners.com) was the financial advisor to NEP.
© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 4-28-16