Riverside Filters Hot Returns to Investors July 01, 2008
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Exit of Air Filtration Manufacturer Produces 109% Gross IRR and 4.8x Gross Cash-on-Cash Return
(July 1, 2008) – The Riverside Company realized its investment in the Universal Air Filter Company, a designer and manufacturer of customized air filter solutions that has enjoyed a consistent record of strong organic growth while under Riverside’s umbrella. The sale provided strong returns to Riverside Capital Appreciation Fund 2003 (“RCAF ’03”) investors and generated a hearty 109% gross IRR and a 4.8x gross cash-on-cash return, including a recapitalization dividend paid to investors in April 2007.
“UAF’s performance has been exceptional throughout our hold period,” said Will Bixby, Riverside Partner. “The company has transitioned from a small family-owned business into a strong global player well positioned for a bright future. Together, Riverside and UAF’s outstanding management team further diversified the company’s revenues from telecom by aggressively targeting industries such as computer networking, industrial machinery, medical, transportation, military and power generation; expanded engineering staff to build technological industry leadership; and enhanced the company’s aftermarket presence.”
Headquartered in Sauget, Illinois, UAF is the clear market leader in customized air filtration products used in high-end electronics equipment applications requiring forced-air cooling. UAF’s filter solutions for electronic equipment are crucial for managing heat dissipation and protecting against a variety of threats, including airborne dust contamination, fire, electromagnetic interference and radio frequency interference. UAF has built its strong reputation by focusing on performance, adherence to strict specifications and its ability to quickly deliver low-volume runs with zero defects. The company boasts a 91% repeat customer rate across its worldwide customer base.
“Riverside provided the capital and tools in order to facilitate growth,” said Todd Deibel, Chief Executive Officer of Universal Air Filter Company. “We utilized resources within the Riverside Toolkit to assist management in opening a sales office in South China that is within proximity to many of our customers. Riverside has proven to be an effective partner in strengthening our position as a global leader in the filtration market.”
Representing Riverside along with Bixby on the sale of UAF to Thompson Street Capital Partners were Chip Walker, Principal, and Erik Holmsen, Vice President. The team was advised by Harris Williams & Company. Allied Capital provided the financing for Riverside’s investment as well as for the dividend recapitalization.
The Riverside Company
The Riverside Company is the largest global private equity firm focused on the smaller end of the middle market (“SEMM”) and is one of the industry’s most experienced leveraged buyout investors. Riverside specializes in investing in premier SEMM companies (those valued up to $200 million) and partners with strong management teams to build companies through acquisitions and value-added growth. Since 1988, the firm has invested in 189 transactions with a total enterprise value of $3.4 billion. Its current portfolio in the U.S., Europe and Asia numbers 61, with combined annual sales of $3 billion, EBITDA of $468 million and more than 14,000 employees. Riverside offers the resources to complete acquisitions smoothly and in as little as 45 days - thanks to its sizeable pool of capital under management (nearly $2 billion in nine funds), over 170 professionals in 17 offices (Amsterdam, Atlanta, Brussels, Budapest, Chicago, Cleveland, Dallas, Los Angeles, Madrid, Munich, New York, Prague, San Francisco, Seoul, Stockholm, Tokyo and Warsaw), and long-standing relationships with partner lenders. Five of seven of the firm’s mature vintages are currently top quartile, and the firm’s investors include the world’s leading pension funds, endowments, funds-of-funds, insurance companies and banks. Please visit www.riversidecompany.com and www.riversideeurope.com for more information.
Universal Air Filter Company
Universal Air Filter is the clear market leader in the design and manufacture of custom air filter solutions primarily sold to the domestic communications industry. UAF also serves the computer networking, industrial machinery, medical, military, transportation and data-storage industries. Its customers include both OEMs, who work with UAF to design a filter to meet specific needs, and end users, who purchase and use the filters for their generally high-end equipment. UAF’s air filters are used in a broad range of communications equipment, including optical networking, wireless base stations, DSL/broadband, soft switches, voice-over Internet protocol gateways, servers, routers, cable modem termination systems, high-speed data transmission equipment, and fiber to the premises. The company offers upfront design services, prototypes within days of finalizing designs, quick manufacturing turnaround, short-run deliveries and immediate compliance with various industry standards. For more information, please visit the company’s web site at www.uaf.com.