Dallas Business Journal
January, 23, 2009
Wingate Partners and Venquest Capital Partners receive M & A award
for their acquisition of Premier Retail Interiors
The story of Premier Retail Interiors is really the story of two companies- and the ability of two Dallas-based private equity firms to that the companies' sum would be greater than their parts.
The acquisitions and combination of Quantum fine Casework, of Fort Lauderdale, Fla and Marlin Showcase, in the Miami area, created a powerhouse with hefty market share and highly regarded customer service manufacturing quality.
The $31 million deal, completed the fall of 2007, combined the two firms - with aggregate annual revenue exceeding $60 million 0 into one with fewer problems and greater opportunity. For Wingate Partners, which is control shareholder and sponsor and Venquest Capital Partners, its co-sponsor, the deal was as large and complex as it was worthwhile.
"this is one of those unique instances where we saw an opportunity to solve the specific issues of both sets of sellers - and still create significant upside of the combined business," say Jason Reed, principal of Wingate and chairman of PRI.
Quantum and Marlin were the top two companies serving the high-end cosmetic fixtures niche - they made the cosmetics sales islands found in department stores. Combining them offered the chance not just for more scale and efficiency but also to rapidly grow another product segment, building high-end interiors for specialty retail clients.
Further, the merger solved a number of organizational and strategic challenges that each firm faced individually. Quantum enjoyed strong business development and finance organization, but its CEO and founder was preparing to retire, creating the need for new leadership. At the same time, a private equity partner wanted to sell its interest. What's more Quantum's internal capacity constraints had left it struggling to keep up with the specialty-retail growth that its business development team could provide.
Marlin meanwhile, , had operating leadership but lacked the sophistication in management systems and business processes that Quantum enjoyed. Nor did it have as strong a business development team as Quantum.
The puzzle pieces were fit together thorough the acquisition, which included a significant investment in the combined entity by Marlin' s management team. PRI emerged with a strong , unified leadership.
The integration of all of the companies' management, departments and processes, along iwth the consolidation of production, allowed PRI to grow its specialty-retail business revenue by $12 million in 2008, a 50% increase from 2007.
Forging the combined company was challenging., in no small part because the predecessor firms were competitors.
Wingate and Venquest had to negotiate and structure two asset acquisition into on legal entity - in a tough financing environment. everything for executive pay packages to workers' benefits to countless technical and legal details had to be worked out.
It was no routine matter "trying to close two acquisition as the same time that were going to immediately combined.", says David Smartt, managing partner of Venquest. "There was no time to stop and digest."
The deal also required a significant amount of financial creativity. Its capital structure included approximately $20 million of senior debt from two lenders, as well as preferred stock, common stock, options and contingent seller notes.
The challenges didn't end there.
Wingate and Venquest had to construct an integration strategy for the two companies before the deal's closing - without giving either management team complete information about its rival.
With the deal complete, the company has a bright future, says Reed, who expects annual revenue to eventually exceed $100 million.
Smartt agrees. "on a short-term basis, we expect softness in the retail space, so there are going to be some challenges for us," he says. "But long-term, our prospects are good"
The Players:
Jason Reed
Principal Wingate Partners
Bud Applebaum
Vice President, Wingate Partners
David Smartt
Managing Partner, Venquest Capital Partners
Paul Bureau
Managing Partner, Venquest Capital Partners
Tim Robertson Jr
President, Marlin Showcase
Leo Lopez
Chief Operating Officer, Marling Showcase
Jeff McGovern
CEO, Quantum Fine Casework
The Adviser
Tom Yang
Hayman & Boone
Article by:
Garmnausen
Dallas Business Journal
January 23, 2009 |
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