Brockway Catches An Add-On, Releases A Dividend –

Brockway Moran & Partners is making leaps in the creepy-crawly sector. Earlier this month, the Boca Raton, Fla.-based buyout shop acquired an add-on for Woodstream Corp., the firm’s animal and pest control platform, which was paid for through a $121 million recapitalization that ultimately enabled the firm to pay themselves a substantial dividend.

Woodstream, headquartered in Lititz, Pa., manufactures and markets lethal and non-lethal insect, pest and animal control products for both home and professional use. The products are marketed under branded industry names such as Victor rodent control solutions, Havahart animal control products and Safer “least toxic” lawn and garden care solutions. Woodstream’s products have leading market share positions within their respective niches and are sold throughout North American and international retail outlets such as Wal-Mart and Home Depot as well as independent grocery and drug stores.

Through the recap, the proceeds of which were used to refinance the company’s indebtedness, Brockway was able to return 65% of its original invested capital to Brockway Moran & Partners Fund II, while retaining 100% of its original ownership stake.

Brockway invested no equity to facilitate the recap, which was wholly financed with a tranche of senior debt led by Antares Capital Corp and a mezzanine facility provided by AlliedCapital Corp. The debt-led recap also financed the acquisition of Fi-Shock, Woodstream’s newest addition. Based in Knoxville, Tenn., Fi-Shock is a manufacturer and marketer of electric and high tensile fencing products and accessories used, mostly in rural settings, for the containment and/or exclusion of pets, farm animals and wildlife.

“There was so much debt capacity due to [Woodstream’s] recent earnings. They preformed ahead of projections through the introduction of some new products so we were able to do [the recap and add-on] without investing any additional cash. And because lending multiples went up, plus the fact that we had to finance the Fi-Shock acquisition, it just made sense to do it through a recap,” Peter Brockway, a managing partner at Brockway Moran told Buyouts.

Target: Fi-Shock Inc.
Buyer: Brockway Moran & Partners
Recap: $121M
Legal Counsel: Brockway: in-house
Accountants: Brockway: PricewaterhouseCoopers

Woodstream came under Brockway Moran’s ownership in June 2003 after the firm acquired it from Friend Skoler & Co. LLC in a deal valued at about $100 million, which at the time was equivalent to 6.5x to 7x Woodstream’s EBITDA. For Friend Skoler, the sale generated cash returns of 3.3x invested capital and an IRR in excess of 40%, according to a Buyouts article published at the time.

In August 2003, Brockway Moran purchased Sonic Technology Products Inc.’s PestChaser division, which makes sonic rodent repellers, for less than $10 million and tacked it to Woodstream’s pest control product line. The acquisition of Fi-shock is firm’s first acquisition since then, and is the largest of all eight companies that have been added to Woodstream since 1999, Brockway said. He added that Fi-Shock will increase Woodstream’s EBITDA by about 25 percent.

Fi-shock’s wares will be used to enhance Woodsteam’s “animal caring and control” product line which already includes wild animal deterrents such as Spray Away Motion Activated Water Repellent, which, when hooked up to an ordinary garden hose, can take aim at critters up to 35 feet away and direct a short stream of water at them.

Brockway said that suburban sprawl-people leaving crowded cities in search of more space and a little land they can call their own-is a trend that is lending to the use of Woodstream’s products, as much of the land being developed to accommodate the growing suburbia was once either forest or farm. Fi-Shock’s fence products, however, are mostly used on large agricultural expanses to protect crops and livestock, so the only reason you’d see them in the suburbs, Brockway kidded, is if “you really didn’t like your neighbors.”