Done Deals: Fleet Secures Telecom Platform –

Providence, R.I.-based Fleet Equity Partners this month acquired platform company NEPTCO, Inc., for $122 million. Fleet Equity invested $25 million in the transaction and Bank of America and Heller Financial Inc. provided the senior debt for the transaction.

Fleet Equity retains approximately a 45% stake in the company and will have two representatives on the company’s board of directors alongside two other representatives from Cornerstone Equity.

“I had met the CEO of NEPTCO around two years ago and and then he came back to us a few months back and told us he was going to sell the business and asked us if we were interested,” said Habib Gorgi, a managing director at Fleet Equity. “We said we were interested and that is how things came about.”

Gorgi said the company was attractive because they participated in the infrastructure on the telecom side and has historically grown and performed well.

“We are excited about the opportunity based on the sector that the company is participating in,” Gorgi said. “We think the growth potential for the company over the next two to three years is very attractive.”

NEPTCO is based in Pawtucket, R.I. and its products include shielding tapes for coaxial and copper wire manufacturers, fiberglass strength elements utilized in fiber optic cable, pulling tapes used to string cable through ducts and cover tape utilized in the packaging of semiconductor devices. NEPTCO also has operations in North. Carolina and France. The company’s annual revenue last year was undisclosed.

Bullish on Telecom

Fleet Equity held a final close on its fourth fund, Chisholm Partners IV, in the spring of 1999 on $275 million (BUYOUTS Sept. 27, 1999, p. 14). Since then, the firm has invested in a total of five telecom companies, including a $30 million investment in Clear Source, a Texas company that links homes and businesses to fiber optic networks and LISN, which provides engineering, furnishing and installation services to the telecom industry. Fleet Equity has also invested in companies outside of the telecom, industry including Mediapak Corp., a compact disk case manufacturer and Meridian Health Care Management, a health-care management services company and Design/Craft Fabric Corp., which converts fabrics into a specific form for commercial and retail customers (BUYOUTS Oct. 25, 1999, p. 14).

Fleet Equity focuses on direct investment opportunities in business services, healthcare, media and information, manufacturing and telecommunications and technology services.