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Brazos Private Equity Partners LLC, Dallas, announced it has signed an agreement to acquire for $81 million ORS Nasco Inc., the Muskogee, OK-based wholesale distribution business of Unidare plc, of Dublin, Ireland. That price represents a 7X multiple on the company's FY 05 EBITDA of $11.6 million.
ORS Nasco announced fiscal year 2005 sales of $216.8 million, up 17% from $184.9 million in FY2004. EBITDA growth in 2005 was 43% on $8.1 million in FY2004. The company has focused on wholesaling products in the industrial, welding, safety, construction, rental, and oilfield services sectors. ORS Nasco only sells to distributors.
Members of ORS Nasco's management team, including President and CEO Bill Scheller, will be equity participants in the transaction and own a significant stake in the company. Scheller will serve on the new Board of Directors.
Brazos said it bought ORS Nasco because of its strong, proven management team, its stable financial history, its high growth potential and its leading position in a well-defined niche market. The deal will move ORS Nasco from a public company to a private company, and is due to close in mid-December.
The acquisition is not expected to change the day-to-day operations of ORS Nasco.
"Over the past six years, Brazos has compiled a strong track record of distribution investments that have created significant value for our investors. ORS Nasco will be an excellent platform for further growth through the implementation of a buy-and-build approach adding value by means of both organic initiatives and acquisitions," said Randall S. Fojtasek, a Brazos Partner.
Formed in 2003 through the merger of Oklahoma Rig & Supply and Nasco Inc., two wholesale suppliers serving distributors in the industrial, welding, safety, construction, rental, and oilfield services sectors, ORS Nasco is a provider of branded and private-label products and services to industrial customers in the $385 billion industrial supplies industry.
According to news reports, Unidare plc, may be looking to sell off its other remaining asset after ORS Nasco, UK-based Eland Cable, which distributes electrical cables, cable accessories and industrial hose to the rail, telecom and equipment manufacturing sectors in the UK and export markets. The company sold Dutch water heater subsidiary Daalderop earlier this year.
ORS Nasco represents more than 600 suppliers and stocks more than 140,000 products, maintaining its purely wholesale status by selling only through the 180,000 independent distributors it serves in the United States.
Brazos Private Equity Partners specializes in leveraged acquisitions and recapitalizations of established middle-market companies with strong and proven management teams, predictable and growing cash flows, and significant growth potential. Brazos partners with management teams to invest in manufacturing, consumer products and services, healthcare, media, distribution and financial service businesses. Since inception, Brazos has completed 24 transactions. For additional information about Brazos, visit the firm's Web site at http://www.brazospartners.com/.