KRG on purchase and exit tear

Denver-based KRG Capital Partners has announced the acquisition of East Coast Fire Protection – the latest of a series of deals following the close of a new, $715m fund.

KRG Capital Partners recently completed the recapitalisation of East Coast Fire Protection. The deal’s announcement follows a series of other transactions from the Denver-based firm, which has been active on both the acquisition and exit fronts for the past six months.

East Coast Fire Protection is an East Coast provider of safety services, primarily focused on the fire safety market. The company installs and services wet and dry sprinklers, dry chemical and gas systems, foam protection units, detection systems for heat, gas and smoke, and ancillary products such as fire hoses and extinguishers. The company was founded in 1997, and according to a statement, is now the second largest company of its kind on the East Coast.

There’s been an increasing awareness on fire safety…There are so many buildings not up to code that this is something that needs to be addressed.

Christopher Lane, managing director, KRG Capital

There were no details provided regarding the company’s financial performance, although KRG did say that a significant portion of its revenues are derived from inspection and maintenance contracts and new construction projects.

East Coast Fire Protection is based in Richmond, Virgina and operates along the Atlantic shoreline, with locations spanning from Maryland to Florida.

“There’s been an increasing awareness on fire safety,” KRG managing director Christopher Lane told PEO. He cited high profile blazes such as last year’s fire in the LaSalle Bank Building and the 2003 inferno at a Rhode Island night club, as helping raise that awareness. He added, “There are so many buildings not up to code that this is something that needs to be addressed.”

Terms of the deal were not disclosed. Harris Bank was tapped as the debt provider and contributed a senior financing arrangement. Paul Hastings served as legal advisor to KRG, while law firm McSweeney & Crump advised the seller.

The acquisition represented the second platform investment for KRG out of its relatively new third fund, the $715 million KRG Capital Fund III, LP. Earlier this month the firm acquired engineering outfit The Focus Corporation as its first deal out of the investment vehicle. In June, KRG closed out its second fund with the purchase of drill bit maker Varel International.

KRG has also been active pursuing exits. Most recently, the firm agreed to sell medical device manufacturer Accellent to Kohlberg Kravis Roberts in a $1.27 million deal. Since mid-September, the firm has also unloaded investments in CCS Medical (through a sale to Warburg Pincus) and The Tensar Corporation (through a sale to Arcapita Inc.).  

The firm closed its third fund this past July, reaching its cap of $715 million in less than eight months. The fund easily surpassed its initial target of $600 million.