Prospect Partners and Stone Pointe have sold Water Co. Holding (WaterCo) to Culligan International Company.
In November 2011, Prospect and Stone Pointe partnered to acquire eleven of the company-owned dealers of Culligan International. Joining the two private equity firms in this acquisition were Don Fuller, the Vice President of Operational Support for the Culligan-owned dealership division, and John Capone, a sales and marketing executive in the Culligan-owned dealership division. The original dealers acquired by Prospect and Stone Pointe were located in New York, Connecticut, Rhode Island, Ohio, Indiana, and Washington.
“WaterCo has been a strong and exciting growth story for Prospect Partners,” said Lou Kenter, a Founding Principal of Prospect Partners. “WaterCo today is one of the largest and fastest growing dealers in the Culligan network, producing consistent, recurring top-line growth for corporate.”
During the holding period, WaterCo completed more than 20 add-on acquisitions of other Culligan franchises, independent water service dealers, and providers of commercial or industrial water purification services, expanding the company’s geographic footprint, market reach, and bottled water delivery capabilities. WaterCo now operates with territory exclusivity in 36 locations in 13 states and provides a suite of water-related products and services – including water equipment, bottled water, water treatment, and equipment installation, maintenance and repair – to residential and commercial accounts nationwide.
Prospect Partners focuses exclusively on management-led leveraged recapitalizations and acquisitions of niche market leaders with revenues of less than $75 million. Areas of interest include niche manufacturing, distribution, and specialty service markets. Since 1998, Prospect Partners has built 50 platforms by investing in more than 150 businesses. The firm has $470 million of capital under management and is based in Chicago (www.prospect-partners.com).
“Don and John built a top-notch operating team and did an excellent job integrating, professionalizing, and improving the performance of WaterCo’s 20-plus acquisitions to create a highly respected, team-oriented company that prided itself on growth, best-in-class practices, and customer service,” said Lee Vandermyde, a Principal at Stone Pointe.
Stone Pointe invests in lower middle market companies that have revenues of at least $10 million and EBITDA of at least $1 million. Sectors of interest include niche manufacturing, business and consumer services, and value-added distribution. The firm is based in Naperville, IL (www.stonepointeinvest.com).
“We have deeply valued the strategic guidance both Prospect Partners and Stone Pointe have provided to help steer the company to a successful outcome,” said Mr. Fuller. “We look forward to continuing our relationship and growth under the Culligan brand.”
Culligan International specializes in water softeners, water filtration systems and bottled water for residential and office applications. The company sells its products and services through a network of approximately 800 independently franchised and company-owned dealers in 90 countries. Culligan International, a portfolio company of Clayton, Dubilier & Rice, is headquartered near Chicago in Rosemont, IL (www.culligan.com).
TM Capital (www.tmcapital.com) was the financial advisor to WaterCo on this transaction and Sidley Austin (www.sidley.com) provided legal services.
© 2018 Private Equity Professional | August 7, 2018
