Sterling Counts In Washington Inventory –

Sterling Investment Partners, a Westport, Conn.-based private equity firm, led an investment group in the acquisition of Washington Inventory Service (WIS) from Huffy Corp. The other players contributing equity to the deal are RFE Investment Partners, a New Canaan, Conn.-based firm, and Sterling limited partners, including Massachusetts Mutual Life Insurance Co., National City Venture Corp., GE Capital and Landmark Partners. Sterling and its co-investors will buy the company for an aggregate price of $84.75 million. The deal was financed with equity from the co-investors and WIS’s senior management. Senior debt was provided by GE Capital, CIBC and Antares, while subordinated debt was provided by Massachusetts Mutual and National City Venture.

WIS, a San Diego-based company, is one of two companies that provides information gathering principally through inventory accounts to all the leading retailers in the U.S., as well as information data gathering services to consumer branded products companies. The company also has operations in Europe, Japan and South America.

“This is a necessary service in good and bad economies and, consequently, it is a company with growing, predictable, free cash flow,” said Douglas Newhouse, managing partner at Sterling.

Sterling has plans to expand the company domestically by providing complementary services and internationally as major U.S. retailers move abroad. The firms is also looking at several acquisition opportunities and plans to support the company’s growth with additional equity, said Newhouse.

Huffy Corp. acquired WIS, which will likely see its fifth consecutive year of record sales and earnings this year, in 1988. The proceeds from the purchase will serve to retire Huffy’s senior term and subordinated debt and reduce the borrowing levels under its revolving credit facility, according to the corporation.

“We felt the company was under managed as a non-core division of Huffy,” said Newhouse. “And we feel that the company will thrive as an independent organization.”