Major tank rotational molders Snyder Industries Inc. and Norwesco Inc. have a new private equity owner: Los Angeles-based Leonard Green & Partners LP, which owns or has investment stakes in some high-profile companies, like BJ's Wholesale Club Inc., Jo-Ann Stores Inc. and Whole Foods Market Inc.
Now Leonard Green is into rotomolded agricultural tanks, septic tanks and custom-molded items — down-to-earth products made on hulking industrial machinery.
Leonard Green purchased the rotomolding operations — 23 plants that employ about 680 people and generate $250 million in total sales — from another private equity firm, Olympus Partners in Stamford, Conn.
Over the past five years, Olympus assembled a dominant tank molder. In 2008, Olympus bought Snyder and Norwesco, the two largest players. In 2010, Olympus made another big acquisition: the tank division of Rotonics Manufacturing Inc. Earlier this year, the group picked up two of Rotonics' plants, to add proprietary materials-handling products such pallets, bins, transport tanks and insulated hoppers.
In another 2010 deal, Olympus bought the tank and materials-handling business from Promens hf of Kópavogur, Iceland. Olympus kept that proprietary business, and one rotomolding factory, when it sold the other five Promens plants to industry veteran Jack Welter, who joined a management group to start custom molder Indiana Rotomolding Inc.
Snyder and Norwesco were joined under the operating name Tank Holdings Corp. Tom O'Connell, CEO of Snyder Industries, said Tank Holdings is a legal entity for financial reasons. “We're sister companies, but we go to market with both brand names, Norwesco and Snyder, and we have two separate sales forces,” he said. “We have very strong brand-name recognition with both the Snyder and Norwesco names.”
Snyder Industries, based in Lincoln, Neb., issued a news release July 9 saying Leonard Green has acquired Tank Holdings. Terms were not disclosed.
Olympus announced in mid-June that it had reached an agreement to sell Tank Holdings, but did not identify the buyer.
O'Connell, CEO of Snyder, and Norwesco CEO Tom Smith are investors in the transaction and will continue to lead the company's direction. Several other management members also have an ownership position.
The rotomolding company specializes in large polyethylene tanks for liquid and solid material storage. They are used in agricultural, industrial and marine markets. THC also has specialized proprietary production in steel transportation containers, insulated materials-handling bins, medical-waste containers, pallets and marine flotation devices.
Officials of Leonard Green & Partners did not return a phone call and email seeking comment. But the firm's website said its investment philosophy targets “cash-flow-positive businesses that have the ability to grow by at least 50 percent over a five-year period.” The private equity firm relies heavily on management partners at its investment businesses.
Leonard Green & Partners has raised more than $15 billion since its inception. Its sixth private equity fund, the $6 billion Green Equity Investors VI LP, closed May 30. Investors include pension funds, sovereign wealth funds, insurance companies, foundations and family offices.
The firm was founded in 1989 by Leonard Green, a pioneer in the leveraged-buyout industry. In 1969, Green and two partners founded one of the first New York-based merchant banks — Gibbons, Green van Amerongen — which did management-led, non-hostile leveraged buyouts.
“They've got a proven track record of working with the management team,” O'Connell said. “We're certainly, as a management team, excited about working for them.”