Done Deals: Franklin St. Grows Nursery Company –

Moving forward with plans to consolidate nurseries within the lawn and garden industry, Franklin Street Equity Partners, through its nursery platform company Zelenka Nursery, this month acquired Windmill Nursery.

Demian Kircher, an associate at the Chicago-based firm, declined to disclose terms of the deal, but said observers just looking at the individual transaction might say Zelenka overpaid in terms of earnings before interest, taxes, depreciation and amortization (EBITDA). However, he said, the synergies to be realized from Windmill as an add-on acquisition make the price more than fair.

Comerica Bank, as agent, and LaSalle National Bank, as co-agent, provided senior debt financing, while Lincoln Investment Management provided subordinated debt.

Franklin Street, along with BancBoston Ventures, originally acquired Zelenka for $58 million in March (BUYOUTS March 20, p. 14). Lincoln Investment Management also provided equity for the deal.

The acquisition of Folsom, L.A.-based Windmill marks the first add-on for the platform company. Windmill generated approximately $7 million in revenue for 1999.

Kircher said Windmill was an attractive add-on because it has nurseries and customers in areas where Zelenka does not, mainly in the Southeast and Texas. Zelenka primarily serves the Midwest.

Having nurseries in the Southeast, Windmill’s plant products also vary from those produced by Zelenka. This will be beneficial to Zelenka’s Mid-South and Atlantic customers who will see improved product selection and better availability more color and variety, Kircher said.

Windmill grows container evergreens, broadleaves, shrubs, perennials, groundcovers and trees on its 420 acres.

As for future add-ons, Franklin Street will look to expand into the Mid-Atlantic, the Northeast and Florida. Once the East is covered, the firm will look West, Kircher said.

Franklin Street Equity began signing on limited partners in 1997. Prior to that, Thomas Ablum, the fund’s general partner, was the president of Ablum, Brown & Co., which advised private equity investors and made co-investments alongside its clients.