Leveraged buyout firm The Riverside Company recently completed the acquisition of three construction-related entities. Riverside bought Bidco Sealants Inc., a manufacturer of concrete sealants; Bidco Fibre Inc., a distributor of reinforcement fibers used in the manufacture of precast concrete products; and Custom Rubber Extrusions Inc., a producer of extruded rubber parts for a variety of applications in the sanitary and storm sewer markets. The purchase was made for an undisclosed price.
Robert Fitzsimmons, a partner at Riverside, said that Riverside would add Bidco to NPC as add-ons. NPC is the leading designer and manufacturer of flexible pipe-to-manhole connectors and equipment used in the installation of connectors in sanitary sewer and storm drain pipelines. Even though the purchases will not be combined, Riverside will count the three companies as one acquisition for the tally of acquisitions. Fitzsimmons said that he sees it as a “very good complimentary add-on to our portfolio.” When asked for a reason as to why the purchase made sense at the present time, Fitzsimmons remarked that “by combining distribution, the immediate payoff should be about $8 million per year.”
“We think there is a pent-up demand for [this] market, and we are always looking for complimentary add-ons, and products in the sanitary sewer market,” Fitzsimmons said. “By integrating Bidco into the NPC market, we are actually running ahead of expectations regarding integration, and they have been very receptive to our ideas. We have substantial capital that they didn’t have, a little over $400 million.”
The recently purchased companies have combined revenue of approximately $8 million. NPC, a company that Riverside acquired as a platform in 1999, will count this recent acquisition as an add-on.
Bidco, Riverside’s ninth purchase of 2002, is the 23rd acquisition from the firm’s second fund, the 1998 Riverside Capital Appreciation Fund LP. RCAF 98 initially raised $107 million and with additional co-investment raised to make add-on acquisitions, invested $110 million to date. Riverside invests in premier companies at the smaller end of the middle market, in the $10 million to $100 million revenue range, that lead their industry niches.
Riverside has been very busy in 2002. Thus far, they have acquired J.C. Whitney (one of the automotive industry’s largest catalog retailers and among the best-known brands for automotive parts and accessories); Beacon Medical Products; Selig Sealing Products; and Exhibit Architecture, among several other companies.
“This acquisition is indicative of Riverside’s commitment to grow its portfolio companies through complementary add-on acquisitions,” explained Fitzsimmons. “With Bidco and Custom Rubber, NPC is now better positioned to serve its customers in the precast concrete industry with a broader range of products.”
Established in 1987, Bidco Sealants manufactures various pre-formed, flexible joint sealants used to seal concrete sanitary sewers, storm manholes, pipes, septic tanks, wet wells and utility and burial vaults. Bidco Fibre manufactures a synthetic reinforcement fiber that is mixed with concrete to provide secondary reinforcement. Custom Rubber Extrusions manufactures rubber extruded parts such as gaskets and lubricants, among other items.