Private investment firm Graham Partners completed a dividend recapitalization of Chelsea Building Products, the companies announced Jan. 11.
Based in Oakmont, Pa., Chelsea manufactures rigid vinyl window and doors and specialty building products. Graham acquired the business, which was founded in 1975, in July 2011, saying construction was one of its focus areas.
As a portfolio company, Chelsea then acquired the assets of an unnamed cellular PVC building products extruder in November 2013 to expand its line of moldings as well as its capacity.
Chelsea experienced “strong performance” driven by product introductions, cost savings and the addition of almost two dozen customer accounts, according to a Jan. 11 news release from Philadelphia-based Graham Partners.
A dividend recap generally involves a company incurring new debt to pay a special dividend to private investors or shareholders. Private investment firms use them as alternatives to selling an equity stake.
“Since Graham's acquisition, the company [Chelsea] has added 23 new customer accounts. As a result, Graham completed a dividend recapitalization returning approximately 120 percent of fund invested capital in the company,” the news release said. “As [Chelsea] continues to win new business and develop innovative products, it is well positioned to capitalize on the continued housing market recovery as well as the industry conversion to energy efficient windows driven by stricter energy codes.”
Graham Partners is bracing itself for a busy 2016 with several portfolio companies expected to be sold and a full pipeline of platform businesses and add-on acquisitions under consideration.
“Many of our portfolio companies have exhibited significant growth in the past year, and are positioned for near-term success due to their high levels of engineering know-how and constant innovation. We're pleased to be able to return significant capital back to our investors as a result of this strong portfolio-wide performance,” Steve Graham, CEO and senior managing principal, said in the release.