Stonebridge Partners (“Stonebridge” or the “Firm”) is pleased to announce the recent sales of its portfolio companies, Alpha Packaging (“Alpha”) and Durcon Laboratory Tops, Inc. (“Durcon”) for a combined value approaching $400 million. Alpha was acquired by Irving Place Capital, while Durcon was sold to Quad-C Management, Inc., two well-known, longstanding private equity firms. As both companies generated significant revenue and profit growth through the recent economic downturn, these realizations represent sizable returns for limited partners of Stonebridge Partners Equity Fund III, L.P.
Stonebridge Partners (www.stonebridgepartners.com) has over 24 years of experience recapitalizing and supporting the growth objectives of middle market manufacturing companies. During this time, the Company has invested $550 million of equity in 52 acquisitions and is currently investing through Stonebridge Partners Equity Fund IV, L.P. which closed in July 2008. The Firm’s principal focus is value-added manufacturing companies, specifically in the packaging, infrastructure, building products, and specialty manufacturing industries. In addition to providing capital for growth, Stonebridge utilizes its Operating Partner business model to assist talented management teams in achieving their strategic goals and to generate significant growth in sales and profitability.
Stonebridge’s investment in Durcon began in 2003 with its acquisition of Laboratory Tops, Inc. With the acquisition of the Durcon Company in 2004, the combined entity known as Durcon (www.durcon.com) became a leader in providing laboratory work surfaces to the educational and institutional markets. The combination of Stonebridge guidance and management initiatives resulted in a compounded annual EBITDA growth rate of approximately 15% during Stonebridge’s ownership period.
“It was a pleasure working with Stonebridge’s Operating Partner Mike Steinback and the rest of the Stonebridge team over the past seven years,” commented Durcon President and CEO, Charles Heinzelman. “Stonebridge was invaluable in the completion and integration of a sizable acquisition, management of raw material costs, refinement of our international presence and strategy, and expansion of our product offerings.”
Alpha (www.alphap.com), a leading manufacturer of high quality, blow-molded, rigid plastic bottles and containers serving the nutritional, pharmaceutical, personal care, and specialty food and beverage segments, represented Stonebridge’s fifth investment in the specialty packaging area. In 2005, Stonebridge acquired Alpha on a direct, negotiated basis from its founder, David Spence, who reinvested a significant amount of his proceeds and continued in his capacity as CEO. Alpha’s history of rapid growth continued under its Stonebridge partnership, acquiring four companies that broadened Alpha’s product and geographical scope and constructing four greenfield manufacturing facilities. As a result, revenue tripled and EBITDA grew by almost four times over the past five years.
“Stonebridge’s operational involvement, attention to free cash flow and strategic initiatives were the perfect complement to our management team,” remarked Alpha’s President and CEO David Spence. “We could not have managed Alpha’s rapid growth over the past five years without Stonebridge’s guidance.”
Durcon and Alpha represent the latest of a string of very successful recent exits for Stonebridge that includes the sale of the Hunter Fan Company to Lehman Brothers, Delta Plastics, Inc. to Rexam PLC and the sale of Alpine Engineered Products, Inc. to Illinois Tool Works Inc. Including Durcon and Alpha, these five recent exits provided the firm’s limited partners with a blended internal rate of return of 48% and cash-on-cash return of just under 3.0x.
For more information regarding these transactions, please contact Michael S. Bruno, Jr. of Stonebridge Partners at (914) 682-2700.
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