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Riverside Heats Up Exit Pipeline, Sells Sentinel March 01, 2011

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The Riverside Company sold Sentinel Performance Solutions Limited (Sentinel), Europe’s number one supplier of residential heating and hot water system treatment products, to Electra Partners. The exit for a sale price of £43 million generated a combined 3.0x gross cash-on-cash return and a 22% gross IRR to Riverside and its investors.

Sentinel, based in Runcorn, England, has market-leading positions in the UK, France, Italy and Germany. Sentinel’s biodegradable and OEM-recommended products clean and prevent corrosion in heating systems, improving energy efficiency and increasing system lifespan.

Riverside invested in Sentinel in August 2005, as a corporate carve-out from General Electric. Riverside transformed Sentinel from a small corporate division to a standalone company with operations and personnel spread across six countries. The deal team helped strengthen Sentinel’s management team and worked with them to build the systems and processes to position the company for future growth. During Riverside’s ownership, Sentinel added a range of products and customers with the 2007 add-on acquisition of Salamander Engineering Ltd., a smaller UK-based competitor. The firm also helped Sentinel launch 24 new products, including its flagship X800 line.

“We’re proud of the work we did with Sentinel,” said Riverside Managing Partner Suzy Kriscunas. “We harnessed Sentinel’s potential, working with management to expand the company’s strong UK position, build sales channels in Benelux, France, Italy and Germany and initiate sales in the U.S. Sentinel is well positioned to build on this strong growth foundation going forward.”

The investment was truly international for the global firm, as it involved two Riverside funds – the North America-based Riverside Capital Appreciation Fund and the Riverside Europe Fund. Having deal team members on both sides of the Atlantic delivered a broad range of insight and experience to the company.

In addition to building and strengthening Sentinel’s core hot water system sales, Riverside helped Sentinel capitalize on the growing renewable energy market and build on Sentinel’s environmentally friendly reputation.

“We saw some compelling opportunities to expand Sentinel’s offerings,” said Riverside Partner Volker Schmidt. “The company now has a comprehensive product line for renewable heating systems, which can be used in solar thermal, air source and ground source heat pump heating systems.”

Principal Trey Vincent and Vice President Scott Bogard worked with Schmidt and Kriscunas on the transaction for Riverside. Riverside’s Associate Director of Origination, Amy Margolis, worked with the deal team and the sell side advisor to facilitate the exit.

Lincoln International advised Riverside on the sale of Sentinel to Electra Partners. Jones Day, KPMG and LEK provided legal, financial and commercial support.

The Riverside Company
The Riverside Company is a global private equity firm focused on acquiring growing enterprises valued at up to $200 million (€200 million in Europe). The firm partners with strong management teams and enhances its investments through acquisitions and organic growth. Since its founding in 1988, Riverside has invested in more than 250 transactions with a total enterprise value of more than $5.4 billion/€4.4 billion. The firm’s portfolio in North America, Europe and the Asia Pacific region includes 74 companies with roughly 14,000 employees. Riverside completes acquisitions smoothly thanks to $3.4 billion/€2.7 billion in assets under management, more than 195 professionals in 19 offices, and longstanding relationships with partner lenders.

Media Contacts

North America and Asia Pacific
Graham Hearns
Director of Marketing and Communications
The Riverside Company
216-535-2221

Europe

Pablo FuenteAssistant Director of Marketing and Communications
The Riverside Company
+32 47485911

Media Contact

Stephanie Fraser
Marketing Consultant
The Riverside Company
Cleveland: +1 216 344 1267
London: +44 20 3077 1923