Seacoast Capital has made an investment of $15.4 million in Stone Road Energy, a retail distributor of propane and heating oil in New England, and a portfolio company of Stone Road Capital.
Stone Road Energy, through its subsidiaries, provides fuel delivery services for homes or businesses in Maine and New Hampshire. The company offers heating oil, kerosene, and diesel, as well as propane for use in heating hot water, heating homes, cooking, and other uses. The company was founded in 2008 and is headquartered near Portland in Gorham, ME (www.stoneroadenergy.com).
Seacoast’s investment in Stone Road will be used to support the company’s strategy of acquiring, operating, and growing family-owned companies in the propane and heating oil sector. Seacoast expects to make follow-on investments in Stone Road as it executes on its acquisition growth strategy.
“Being New Englanders ourselves, we understand the importance of the heating fuels sector to our geographic footprint,” said Tom Gorman, a Partner with Seacoast Capital. “Stone Road’s ownership of multiple fuel retailers and the associated storage capacity results in substantial competitive barriers.”
Seacoast Capital makes non-control subordinated debt and equity investments of $5 million to $25 million in lower middle market companies with revenue of at least $10 million and $2 million or more of EBITDA. Sectors of interest include specialty manufacturing; value-added distribution; health and wellness; logistics and infrastructure services; and commercial and consumer services. Seacoast Capital is currently investing its fourth fund, Seacoast Capital Partners IV LP, with $239 million of capital commitments. The firm was founded in 1994 and has offices in Boston and San Francisco (www.seacoastcapital.com).
“In one of the coldest regions of the US, a lack of natural gas infrastructure coupled with high alternative (non-fossil-fuel) home heating costs should result in consistently strong demand for propane and oil used to heat homes,” said Alan Rich, a Vice President with Seacoast Capital. “We have high hopes for our Stone Road investment.” The investment in Stone Road is Seacoast’s seventh 2017 non-controlling platform investment.
“We are excited about beginning our relationship with Seacoast Capital,” said Bill Overbay, Managing Partner at Stone Road Capital. “They were the most thoughtful of any of the other groups we evaluated and were able to take the inevitable deal hurdles in stride and with great flexibility. We look forward to growing Stone Road alongside Seacoast for many years to come.”
Stone Road Capital invests from $10 million to $50 million in companies that have from $5 million to $20 million of EBITDA. Sectors of interest include telecommunications and infrastructure, manufacturing, energy, business services, and agriculture. The firm is based in Providence, RI (www.stone-roadcap.com).
© 2018 Private Equity Professional | January 29, 2018