CenterOak Partners has sold SurfacePrep, a distributor of surface treatment products, to Nautic Partners.
SurfacePrep is a distributor of abrasives, specialty ceramics, and surface treatment equipment including blasting and tumbling media, coated abrasives, chemicals, metallurgical additives, and abrasive equipment replacement parts.
SurfacePrep’s consumable products are used by more than 15,000 customers – most customers place an order at least once every quarter – in the aerospace, general industrial, automotive, consumer products, medical, oil and gas, and firearms industry. The company’s products are used in a range of applications including additive manufacturing finishing, ball burnishing, parts cleaning, cosmetic finishing, deburring and degreasing, mold and die cleaning, pickling and descaling, polishing, and rust, scale, and contaminant removal.
CenterOak formed SurfacePrep in May 2020 as a new platform to combine its investments in GNAP, a Grand Rapids-headquartered distributor of abrasive products that was acquired in November 2018 from Frontenac, and 10 add-on acquisitions that it had completed over the prior 18 months. Earlier, GNAP was formed in 2005 through the merger of Michigan-based companies Grand Northern Products and Abrasive Products.
Today, SurfacePrep operates a network of 35 distribution branches, 10 process development labs, and multiple finishing centers across the United States, Canada, and the United Kingdom. SurfacePrep, led by CEO Mike Currie, is headquartered in Grand Rapids, Michigan.
“CenterOak’s prior experience and success growing specialty distributors made them a valuable partner,” said Mr. Currie. “Together, we converted 15 local brands to the single unified ‘SurfacePrep’ name operating under the ‘One SurfacePrep’ model, tripled our salesforce and broadened our service and product offerings. Our team look forwards to the next chapter of growth and expansion ahead.”
“During CenterOak’s investment, SurfacePrep tripled in size while expanding margins,” said Jason Sutherland, a managing partner of CenterOak. “Alongside management, we executed an investment thesis to consolidate firms specializing in the highly technical sale of surface enhancement solutions. Increased scale supported investments that made the company a more valuable partner to its vendors, a stronger resource for its customers and a better home for its employees.”
“SurfacePrep holds a strong position in a large and highly fragmented market, serving its customers through a consultative sales approach, showcasing a strong value proposition that is rooted in SurfacePrep’s technical expertise,” said Sean Wieland, a managing director of Nautic. “We believe the company has significant runway to continue to provide value to its customers in existing and adjacent markets, and we are excited to work with management on those plans.”
“SurfacePrep has demonstrated a long history of growth,” said Chris Pierce, a managing director of Nautic. “We are excited about Mike and the team’s ability to accelerate that growth track record in the coming years and are thrilled to partner with them to support the company’s future efforts. Additionally, we’re excited to add another investment to our distribution portfolio within Nautic’s Industrials group.”
Providence, Rhode Island-headquartered Nautic Partners is a middle-market private equity firm that makes majority equity investments of $50 million to $400 million in companies with enterprise values from $100 million to more than $1 billion. Sectors of interest include healthcare, industrial, and outsourced services sectors.
Dallas-headquartered CenterOak makes equity investments of $20 million to $150 million in companies with enterprise values of $50 million to $500 million and EBITDA of $5 million to $35 million. Sectors of interest include industrial manufacturing and distribution, business services, and consumer products and services. CenterOak’s first fund closed in 2016 at its hard cap with $420 million of capital. In April 2021, CenterOak had an oversubscribed and hard cap close of its second fund, CenterOak Equity Fund II LP, with $690 million of capital.
Debt financing for this transaction was provided by Antares, Churchill, Cliffwater, Manulife Investment Management and Metlife Investment Management. KeyBanc was the financial advisor to SurfacePrep on this transaction.
The sale of SurfacePrep is the second exit for CenterOak in 2024 following the January sale of CollisionRight, an Ohio-based provider of auto body repair services, to Summit Partners.
© 2024 Private Equity Professional | February 28, 2024
