Heartwood Partners has agreed to sell UW Solutions to publicly traded Apogee Enterprises in a $240 million transaction.
UW Solutions specializes in surface-coated products for various applications, including graphics and warehouse mezzanine decking. Within its graphics segment, the company produces HD printable materials under the ChromaLuxe and Unisub brands. Many of these products are widely used for high-definition photo printing. In the industrial flooring sector, UW provides ResinDek, a solution designed for mezzanine floors in distribution centers, and engineered coatings via RDC Coatings.
Heartwood acquired UW Solutions in June 2020. During its ownership, Heartwood helped the company grow by investing in its infrastructure, management team, and expanding its manufacturing capabilities through the acquisition of R&D Coatings in June 2021.
According to Apogee, the $240 million purchase price represents a multiple of approximately 8.5x UW Solutions’ estimated adjusted EBITDA for fiscal 2026, inclusive of run-rate cost synergies of $5 million and net of an approximately $27 million tax benefit provided by the transaction. The acquisition is expected to contribute approximately $100 million of revenue with an adjusted EBITDA margin of approximately 20% in fiscal 2026.
UW is led by CEO Devlin Riley and is headquartered in Louisville, Kentucky. “Heartwood Partners’ willingness to invest in people and, importantly, fully leverage its internal value creation specialist team and playbook led to this outcome,” said Mr. Riley. “The strength and stability of their unique lower-debt structure has allowed UW to grow into a world-class provider of coating solutions. We are excited to partner with Apogee for the next chapter of UW’s growth story.”
“We are proud of our partnership with UW and the successful outcome that we were able to realize for our investors,” said Demetrios Dounis, the managing partner at Heartwood Partners. “This represents the third exit for Fund III and another example of how our current cash-yield and lower-leverage model can deliver real wins in any deal market environment. Partnering with management has been a pleasure in transforming and growing the business. We look forward to watching the business continue its growth trajectory as part of Apogee.”
Heartwood invests in United States-based companies with revenues between $20 million and $250 million and EBITDA between $3 million and $30 million. Sectors of interest include food, agriculture, specialty chemicals, niche manufacturing, packaging, and industrial and consumer services.
Last week, Heartwood acquired Royal Products, a manufacturer and distributor of workholding accessories, mist collectors, tooling, drill chucks, deburring tools, and automation equipment. These products are sold through industrial distributors, machine tool distributors, and OEM machine tool builders. Royal was founded in 1946 and is today led by CEO Tom Sheridan. The company’s headquarters are on Long Island in Hauppauge, New York.
Heartwood is investing through its fourth fund, Heartwood Partners Fund IV LP. The Norwalk, Connecticut-based firm was founded as Capital Partners in 1982 and changed its name to Heartwood Partners in September 2020.
“UW Solutions is a highly strategic acquisition, aligned with our strategy of adding differentiated businesses with a track record of operating excellence to our portfolio,” said Ty Silberhorn, Apogee’s chief executive officer. “This acquisition will strengthen the large scale optical (LSO), our most profitable business segment, and expands our offering of high-performance coated substrate solutions.”
Apogee Enterprises (NASDAQ: APOG) specializes in architectural products and services, including high-performance glass, acrylic products, and architectural framing systems. Apogee’s product lines include architectural glass under its Viracon brand, curtainwall and storefront systems via Wausau Window and Wall Systems, and picture-framing acrylics under Tru Vue. Apogee was founded in 1949 by Otto Silha and is headquartered in Minneapolis, Minnesota.
Harris Williams was the financial advisor to UW Solutions on this transaction.
© 2024 Private Equity Professional | October 4, 2024
