building products distribution

Kelso and BlackEagle Recap US LBM

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Kelso & Company has agreed to acquire a majority equity interest in US LBM Holdings, a distributor of building products material, from BlackEagle Partners.  BlackEagle and members of the company’s management team will continue to hold a minority interest in the company.

US LBM is a building products distribution platform formed by BlackEagle in 2009.  Through a series of acquisitions, US LBM now serves builders, remodelers and specialty contractors throughout the US with 157 locations in 22 states.  The company is headquartered in Green Bay, WI (www.uslbm.com).

“Our partnership with BlackEagle has led to the creation of a leader in building products distribution,” said L.T. Gibson, CEO of US LBM. “We are excited about Kelso’s investment in the business and the new partnership between Kelso, BlackEagle and management. We look forward to working with our shareholders to continue to build and grow the company.”

BlackEagle Partners is a middle market private equity firm that acquires underperforming and distressed businesses, non-core subsidiaries, and companies in out-of-favor industries. The firm invests between $5 million and $25 million in businesses in a variety of industries and in situations ranging from companies with current operational losses, in or near bankruptcy, to profitable situations where a change in ownership can revitalize the outlook.  The firm has offices in the Detroit suburb of Bloomfield Hills and in New York (www.blackeaglepartners.com).

“We have worked alongside L.T. and his team for six years to build a world-class company, and we look forward to continuing the company’s upward trajectory in partnership with Kelso,” said Michael Madden, Managing Partner of BlackEagle.

“We are pleased to be partnering with BlackEagle, L.T. and the team at US LBM, both at the corporate level and at the individual business units,” said Sandy Osborne, Managing Director at Kelso.  “We are excited to support the company as it continues its growth.”

Kelso is one of the oldest and most established firms specializing in private equity investing. Since 1980, Kelso has made investments in over 115 companies in a range of industry sectors. The firm is currently investing its eighth investment partnership, Kelso Investment Associates VIII, LP, with $5.1 billion of committed capital. Kelso was founded in 1971 by Louis Kelso and is based in New York (www.kelso.com).

Credit Suisse advised Kelso on the transaction and Harris Williams advised US LBM.

© 2015 PEPD • Private Equity’s Leading News Magazine • 7-31-15

Platinum Completes Buy of PrimeSource

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Platinum Equity has completed the acquisition of PrimeSource Building Products from ITOCHU Corporation.  PrimeSource is one of the largest distributors of construction fasteners and non-lumber building products in North America.  This transaction was first announced by Platinum on March 30, 2015.

PrimeSource Building Products, owned by ITOCHU Group since 1998, has 42 locations across the US and Canada and has carries more than 700,000 SKUs.  PrimeSource distributes building products including adhesives and caulks, anchor bolts, builders hardware, collated fasteners and screws, nails, and steel framing. Customers include lumber and building supply dealers, retailers, supply chains, steel fabricators and wholesalers.  PrimeSource has 7.1 million sq. ft. of storage capacity across its system (4.1 million square ft. under roof + 3.0 million outside).  The company was founded in 1938 as Harbor Plywood. PrimeSource is headquartered in Irving, TX (www.primesourcebp.com).

Jacob Kotzubei, a partner at Platinum Equity, led the transaction. “PrimeSource is one of the leaders in the industry with a global network, strong customer relationships and well recognized brands,” said Mr. Kotzubei. “We believe the company is well positioned for growth, both organically and through add-on acquisitions.”

The PrimeSource transaction represents the third acquisition Platinum Equity has completed in the last three months.  The firm acquired Enbi, a manufacturer of print rollers and specialty components, in March from Dutch multinational company Royal Tencate and acquired Chinese manufacturer Ying Shing Enterprises in April. A fourth transaction, the proposed acquisition of Worldwide Flight Services, was announced in April and is expected to close by the end of June.

Platinum Equity invests in a range of industries including information technology, telecommunications, logistics, metals services, manufacturing and distribution. The firm has completed nearly 150 acquisitions with more than $27.5 billion in annual revenue at the time of acquisition. Platinum Equity was founded in 1995 and is based in Beverly Hills with additional offices in New York and London (www.platinumequity.com).

PrimeSource Building Products is led by the company’s co-CEOs David Fishbein and Bob Furio.  “This is a terrific opportunity for PrimeSource and all of our stakeholders,” said Mr. Furio. “Working with Platinum Equity will make us even stronger and allow us to take the next step in the evolution of our business.”

2015 PEPD • Private Equity’s Leading News Magazine • 5-11-15