Olympus Partners has nabbed another giant North American rotational molder in a 10-week buying mini-spree.
The Stamford, Conn.-based private equity firm acquired Norwesco Inc. in a transaction announced Sept. 30. Terms were not disclosed, but Olympus partner Manu Bettegowda said Norwesco managers are retaining a minority stake in the company.
St. Bonifacius, Minn.-based Norwesco claims to be the continent's leading manufacturer of rotomolded polyethylene tanks for agricultural, water, closed-top industrial, and below-ground septic and cistern markets.
``We believe there is strong growth potential in the North American rotational molding market and wanted to increase our presence in the industry,'' Bettegowda said in an Oct. 1 telephone interview. ``We have long admired the products and management of Norwesco and see it as a perfect fit with Olympus.''
Olympus focuses on middle-market management buyouts and later-stage venture capital deals and manages more than $3 billion in assets. In July, the company acquired intermediate bulk container maker Snyder Industries Inc. of Lincoln, Neb., with Snyder management retaining a minority share. Snyder, with 2007 sales of $87 million, was North America's sixth-largest rotomolder, according to Plastics News' most recent ranking.
That same ranking puts Norwesco as the third-largest rotomolder in North America, with sales of $105 million for the fiscal year ended June 30. Founded in 1939 in St. Paul, Minn., as Northwest Plastics, Norwesco operates 15 plants in the U.S. and Canada and employs 215.
Bettegowda said management at both recently acquired companies will be maintained, as will their separate facilities. Tom Smith, Norwesco's chief executive officer, and Tom O'Connell, his counterpart at Snyder, will report directly to Olympus' board. Smith and O'Connell were unavailable for comment.
``Both leaders have a long and proven track record in growing their businesses and providing superior customer service and we are confident both management teams will continue their effective leadership,'' Bettegowda said.
The Norwesco and Snyder deals illustrate the relatively fast pace of buying and selling common to private equity groups trolling the waters of the plastics industry this decade.
Before Olympus, Norwesco was owned by Allied Capital Corp. of Washington. Allied bought the firm in 2005 from Minneapolis-based Norwest Equity Partners and Brockway Moran & Partners Inc. of Boca Raton, Fla., which had held the business since 1998.
Allied Managing Director Robert Monk said the time was right to divest Norwesco, despite it being a stellar performer. ``We may be in difficult [economic] times for a number of years, where companies don't trade for the same multiples and banks don't lend they way they used to,'' Monk said Oct. 1.
As a result of the Norwesco sale, Allied realized a gain on its equity investment in the company of about $86 million, subject to post-closing adjustments, the firm reported in a Sept. 30 news release. About $10 million of Allied's proceeds from the sale remain in escrow, subject to certain holdback provisions. Allied also was repaid around $65 million of subordinated debt. In connection with the transaction, Allied participated in Norwesco's new senior credit facility for $39 million.
Olympus had purchased Snyder's majority shares from Cortec Group of New York.