The Riverside Company has sold L-com, a provider of wired and wireless connectivity products, to Odyssey Investment Partners. The sale generated a 2.6x gross cash-on-cash return and a 17% gross IRR for investors in the 2003 Riverside Capital Appreciation Fund.
General Electric Capital Corporation, CIT Finance, the Bank of Ireland, and Newstone Capital Partners, provided debt financing to support the acquisition by Odyssey.
L-com is a designer and manufacturer of wired and wireless connectivity products. The company’s product portfolio includes cable assemblies, connectors, adapters, industrial networking components, and custom connectivity products, as well as a line of wireless products. The company has over 10,000 SKUs across a range of product categories including cable assemblies and connectors, wireless local area network access points, and associated RFID support products. L-com has manufacturing and sales facilities in Suzhou, China, Boca Raton, FL and North Andover, MA and its products are sold directly to end users through its printed catalog, e-commerce website and dedicated sales forces, as well as through distribution partners. Customers include original equipment manufacturers, system integrators and network installers. The company was founded in 1982 and is headquartered in North Andover, MA (www.L-com.com).
Riverside invested in L-com in April 2006, and helped L-com grow its customer base, develop new products, improve operations, enter China as both an end market and manufacturer, and strengthen its management team. The 2007 add-on of HyperLink Technologies added wireless connectivity products, expanded the customer base and significantly increased international sales. “Riverside’s efforts helped L-com thrive through the global economic crisis, and left the company bigger and better upon exit,” said Riverside Partner Kristin Newhall. “Although we held L-com during a challenging time for the industry, the company added jobs and grew revenues and EBITDA during the hold period, leaving L-com poised for continued growth.”
Working with Ms. Newhall for Riverside on the sale were Vice President Meranee Phing and Senior Associate Robert Avery. Riverside Origination Principal Amy Margolis worked with the deal team to facilitate the sale of the business. Stifel Nicolaus Weisel advised Riverside on the transaction.
The Riverside Company is a private equity firm focused on the smaller end of the middle market (“SEMM”). Riverside specializes in investing in SEMM companies (those valued up to $200 million) and partners with management teams to build companies through acquisitions and value-added growth. Since 1988, the firm has invested in 290 transactions with a total enterprise value of more than $6 billion. The firm is headquartered New York with additional offices in Atlanta, Chicago, Cleveland, Dallas, Los Angeles, San Francisco, and London (www.riversidecompany.com).
Odyssey Investment Partners is a middle-market private equity fund with more than $2 billion under management. Odyssey makes controlled investments primarily in established middle-market companies in a variety of industries, including industrial manufacturing, business, financial and healthcare services, aerospace products, and localized and route-based service businesses. The firm is headquartered in New York, NY (www.odysseyinvestment.com).
“L-com is a strong platform poised for solid growth in the coming years. The company has combined outstanding in-house manufacturing operations and customer service with a sophisticated multi-channel marketing strategy to provide customers high-quality connectivity products. We are excited to work with L-com’s strong and experienced management team to expand the company’s leading market position through organic initiatives and strategic acquisitions,” said Randy Paulson, a Managing Principal of Odyssey.
