Deal of the Year - USA
Best Industrial Transactions Practice - USA & Best Middle Market Investment Bank - USA
Brown Gibbons Lang & Company (BGL) is a leading independent, middle market-focused investment bank which serves both public and private industry, including private equity sponsors, public and private companies, and credit institutions. They offer these companies a comprehensive set of interrelated services including mergers and acquisitions advisory, debt and equity placements, financial restructuring advice, and valuations and fairness opinions, with global industry teams in Business Services, Consumer, Environmental & Energy Services, Healthcare & Life Sciences, Industrials, and Real Estate.
BGL’s Andrew Petryk highlights details of the sale of Profile Products LLC, a portfolio company of Mid Oaks Investments, to private equity investor Platte River Equity, talking through the deal process and what needed to be achieved in order for the transaction to be a success: “Profile is an innovative global environmental solutions company providing soil, water, and vegetation management solutions with diverse applications in private and civil construction, energy, mining, landfill, agriculture, horticulture, sports fields, golf courses, and retail lawn and garden. The company is a research and development and thought leader whose patented and proprietary erosion and sediment control products, turf establishment products, and complementary solutions serve to minimize soil loss and accelerate seed germination. Its clay products are used to absorb water in root zones, on sports fields, in cat litter, and in other applications. With internationally recognized brands and a broad international distribution network, Profile’s products are sold in 75 countries on 6 continents,” Petryk says.
Company: Brown Gibbons Lang & Company Name: Andrew K. Petryk, Managing Director Email: apetryk@bglco.com Web Address: www.bglco.com Address: One Cleveland Center, 1375 East 9th Street, Suite 2500, Cleveland, OH 44114 Telephone: +1-216-241-2800
“Profile serves a niche market, operating two lines of business with very different raw material inputs (clay versus wood and paper fiber), which required that we identify a buyer for the entire business in order to fully capitalize on the company’s many growth prospects. BGL identified a diverse international and domestic audience and executed a process that culminated in a sale to Platte River Equity,” Petryk adds. Factors conducive to a successful deal The factors conducive to a successful deal are, “a thorough understanding of the company and markets it serves, identifying and pursuing appropriate buyers, and developing and communicating a compelling investment thesis around future growth and cash flow generation,” Petryk says. In terms of Petryk’s predictions for the future, commenting on the parties involved in the Profile transaction, he says, “It has been an excellent partnership. With Platte River’s operating expertise and capital support, Profile immediately set out to acquire a key competitor and pursue its growth strategy. These actions have strengthened and diversified the business while allowing Profile to achieve strong growth in new markets.” Speaking to the broader market, Petryk says, “The global M&A markets are active. Sellers are continuing to achieve high valuations and favorable deal terms.” Petryk adds, “This dynamic is fueled by an aggressive private equity community fighting to deploy both new and aging funds, a robust debt market, and strategic buyers with strong balance sheets seeking growth.” But how long can the current market last? Petryk observes, “Given that we are arguably five or six years into the current cycle, we believe there is a significantly higher level of risk that valuation multiples will decline rather than advance beyond current levels. Though we see strong momentum in both revenues and EBITDA from most of our clients, the benefit of this growth may be offset by downward pressure on EBITDA multiples if shareholders wait too long to seek a liquidity event.”
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