Color Spot Nurseries, a portfolio company of Black Diamond Capital Management, has acquired certain assets of Color Star Growers of Colorado through a Chapter 11 Section 363 process which closed last month.
Color Star was a grower and wholesaler of flowers and nursery stock with greenhouses and distribution centers in nine locations in Colorado, Missouri and Texas. The company was the fourth largest bedding plant distributor in the US based on square footage, with market positions in over 20 states (www.colorstargrowers.com).
The demise of Color Star was caused by stagnant consumer spending, slow housing starts, retailer consolidation and adverse weather conditions during the company’s peak growing season in 2013. As a result, the company faced liquidity constraints and filed for Chapter 11 Bankruptcy protection in the US Bankruptcy Court for the Eastern District of Texas in December 2013. SSG Capital Advisors (www.ssgca.com) was retained in September 2013 as Color Star’s investment banker to explore strategic alternatives, including a sale of substantially all of the company’s assets.
SSG coordinated the sale of Color Star’s assets to three buyers – Color Spot Nurseries, Altman Plants, and Raindrop Partners. Color Spot purchased Color Star’s Sanger, TX assets. Altman Plants purchased the company’s Giddings, TX, Harrisonville, MO and Peyton, CO assets; plus equipment and inventory at the Austin, TX, Carthage, MO and Jasper, MO facilities. Raindrop Partners purchased all of the company’s Old Fort Lupton, CO and New Fort Lupton, CO assets.
Black Diamond ‘s portfolio company, Color Spot Nurseries, is a distributor of bedding plants, vegetables, herbs, shrubs, premium blooming plants, ground cover, and ornamentals to more than 2,000 retail and commercial customers throughout the United States. The company operates 12 production facilities throughout the United States and is headquartered in Fallbrook, CA (www.colorspot.com).
Black Diamond invests in performing and distressed markets through the following four platforms: control distressed/private equity; hedge fund; mezzanine funds; and CLOs and other structured vehicles. The firm was founded in 1995 and employs more than 80 people across multiple offices, including Greenwich, CT; Lake Forest, IL; and London, UK (www.bdcm.com).
Raindrop Partners makes equity investments of up to $5 million in Colorado-based companies with revenues of up to $20 million and EBITDA of up to $3 million. Sectors of interest include business and consumer services; consumer staples and food; real estate, construction, and building products; and minerals & mining. Raindrop Partners owns Circle Fresh Farms, a Colorado-based greenhouse vegetable operation focused on providing locally grown, fresh produce year-round to Colorado’s metropolitan areas, including Denver, Boulder and Colorado Springs. Raindrop Partners is headquartered in Denver (www.raindroppartners.com).
Altman Plants is the nation’s fifth largest grower for the horticulture industry with 1,100 employees and 6 million square feet of greenhouse operations over 1,200 acres in three states. Altman Plants is headquartered in Vista, CA (www.altmanplants.com).
© 2014 PEPD • Private Equity’s Leading News Magazine • 2-21-14
