Genstar Closes Sale of BBB to Clearlake

Genstar Closes Sale of BBB to Clearlake

Purchase of BBB follows Clearlake's May 2022 hard cap close of its seventh private equity fund at $14.1 billion

BBB’s products include remanufactured starters, hydraulic steering, brake calipers, electric power-assisted steering and turbochargers

SOURCE: BBB Industries

Genstar Capital has closed its sale of BBB Industries, an automotive replacement parts provider, to Clearlake Capital Group. Genstar, which acquired BBB in 2018, will retain a minority ownership stake in BBB in partnership with Clearlake.

BBB’s products include remanufactured starters, hydraulic steering, brake calipers, electric power-assisted steering and turbochargers which are used by light vehicle owners, professional technicians and franchised dealers.

Source: BBB Industries

The company’s products are sold through warehouse distributors, retail outlets, and OEM service organizations.

In November 2021, BBB launched TerrePower, a new operating division that upcycles solar components and electric batteries. Upcycling is the process of taking a used part and re-manufacturing it for a second life avoiding both recycling and disposal.

BBB was founded in 1987 and is headquartered near Mobile in Daphne, Alabama with manufacturing facilities in Sparta, Tennessee and Reynosa, Mexico, and 13 distribution offices across the US, Canada, Europe, and Mexico.

“We extend and improve the useful life of critical parts and at the same time prevent materials from entering the waste stream by sustainably manufacturing products for a second life,” said Duncan Gillis, the CEO of BBB. “We are proud to be a carbon neutral manufacturer with a focus on reusing products to reduce waste and protect the environment while providing valuable components and service to our customers. Genstar has been a great partner over these past several years and we are pleased to continue with them given their ongoing investment in the company.”

“At the time we acquired BBB, the company was already having a meaningful impact on sustainability within the automotive aftermarket, but we saw an opportunity to make that impact much broader across other segments of the economy,” said Rob Rutledge, a managing director at Genstar. “Our goal was to help transform the company through strategic acquisitions to expand its product portfolio, build its geographic footprint in Europe and develop BBB’s sustainable manufacturing capabilities into electric vehicles and renewable energy. The company has succeeded on all fronts.”

Genstar is an active investor in middle-market companies that have enterprise values from $50 million to $1 billion and EBITDA greater than $15 million. Sectors of specific interest include financial services, software, industrial, and healthcare industries. In April 2021, Genstar held a hard cap close of Genstar Capital Partners X LP with $10.2 billion in capital commitments. San Francisco-headquartered Genstar was founded in 1988 and is led by managing partners Ryan Clark (President), Jean-Pierre Conte (Chairman), Rob Rutledge, Tony Salewski, and Eli Weiss.

“Clearlake continues to see attractive opportunities arising from a targeted approach to ESG-focused investing. Our desire to partner with BBB is driven by the opportunity to combine this thematic-based approach with our experience in the automotive aftermarket,” said José E. Feliciano, Co-Founder and Managing Partner, and Colin Leonard, Partner and Managing Director, of Clearlake. “BBB is poised to benefit from its leadership position in its core automotive markets as well as the market tailwinds within the renewable energy ecosystems that the company has begun addressing through TerrePower. We see an exciting runway for future growth through continued investment in these capabilities.”

Clearlake invests in industrials and energy, software and technology-enabled services, and consumer sectors. The firm was co-founded by José E. Feliciano and Behdad Eghbali in 2006 and is headquartered in Santa Monica, California with an additional office in Dallas, Texas. In May 2022, Clearlake held a hard cap and oversubscribed final close of its seventh private equity fund, Clearlake Capital Partners VII LP, with $14.1 billion in commitments.

J.P. Morgan was the financial advisor to Clearlake and provided debt financing to support the acquisition of BBB. Goldman Sachs was the financial advisor to BBB.

© 2022 Private Equity Professional | July 29, 2022

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