Brazos buys Unidare unit

Brazos Private Equity Partners has carved the ORS Nasco unit out of Ireland’s Unidare plc, acquiring the US wholesale distributor in an $81m deal.

Dallas-based Brazos Private Equity Partners has clinched a deal to acquire the ORS Nasco US wholesale distribution unit of Dublin-based Unidare plc. The transaction is valued at $81 million (€69 million).

Randall Fojtasek, partner, Brazos Private Equity Partners

This is not Brazos’ first play in the distribution space. The firm has previously invested in companies such as food-service equipment distributor Strategic Equipment & Supply Corp, and Shelter Distribution, a building products distributor that was acquired last month by Beacon Roofing Supply Co.

Oklahoma-based ORS Nasco, meanwhile, primarily serves the industrial supplies side of the market, specifically targeting the welding, safety, construction and oilfield services sectors, among others. The company was created when Unidare merged Oklahoma Rig & Supply with Nasco Inc. in 2003, and last reported full-year EBITDA of $11.6 million on sales of $216.8 million.

Brazos partner Randall Fojtasek cited the firm’s history in the distribution space combined with the sector’s current financial profile for attracting Brazos to this deal. “The fundamentals of the industries they’re supplying are showing a good organic growth rate, and the company itself is actually growing at a greater rate,” he told PEO.

Fojtasek added that the growth plan for the company will include select acquisitions, and in time, he sees the business reaching around $500 million in revenues. In terms of an exit plan, Fojtasek noted that the business should appeal to strategic buyers in the future.

Brazos financed the deal with a combination of senior and subordinated debt coming from Merrill Lynch and David L. Babson & Co., respectively. The equity will come out of Brazos latest fund, Brazos Equity Fund II, which is currently in fundraising mode.

Fojtasek refused to comment on the new fund, but published reports have indicated that the firm is seeking in the range of $350 million and has signed on Credit Suisse First Boston as placement agent.

The acquisition comes amid a recent run of exits for Brazos. In addition to Shelter, which was sold last month, Brazos has also logged either whole or partial realizations on its investments in marketing outfit Rennhack Marketing Services (through a sale), restaurant chain Cheddar’s (via a recapitalisation) and insurer Republic Companies Group (in an initial public offering).

Meanwhile, the sale of ORS Nasco represents Unidare’s ongoing effort to divest its separate businesses as it currently winding down its operations. The company also sold its Daalderop BV Dutch manufacturing business in a €55 million sale to 3i Group earlier this year, and the company, following the completion of the ORS Nasco deal, will begin “exploring possible disposal options” for its Eland electrical cable unit, its last remaining division.

Houlihan Lokey Howard & Zukin advised the seller on the ORS Nasco deal, while Gibson Dunn & Crutcher served as counsel to Brazos.