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The Riverside Company (Riverside), a global private investor focused on the smaller end of the middle market, and Investcorp, a global provider and manager of alternative investment products, have announced the successful sale of their key unit Arrowhead Engineered Products (AEP) to Genstar, a private equity firm focused on investments in targeted segments of the financial services, healthcare, industrials and software industries.
Founded in 1985, AEP is a leading global engineer and omni-channel distributor of non-discretionary, proprietary-branded, aftermarket replacement parts for outdoor power equipment, powersports, specialty vehicles, agriculture and other diverse end markets.
AEP leverages data and digital capabilities to design and engineer more than 10,000 new SKUs per year using a diverse global supplier base to provide the highest quality aftermarket replacement parts to end users.
Through its strategic distribution footprint across North America and Europe, AEP delivers more than 380,000 SKUs through dealers, distributors, retailers, repair shops and e-commerce channels.
Riverside had acquired a majority investment in AEP in 2015 and subsequently Investcorp acquired a significant minority stake the very next year alongside the firm.
Partnering with management, Riverside and Investcorp focused on several value creation initiatives that resulted in over 5x revenue growth of the platform.
On the AEP deal, the duo confirmed the transaction but did not disclose its specific terms.
Riverside Co-Chief Investment Officer (RCAF) Brad Roberts said: "We are proud of what we have accomplished with AEP management during our successful partnership. With the group, we identified an opportunity to invest in a differentiated platform with exposure to attractive end markets and accelerated growth through organic and inorganic initiatives."
"During our investment period, and working closely with management and the Investcorp team, we exponentially grew AEP’s eCommerce presence, expanded its international footprint, enhanced the sales and marketing organizations and entered new end markets," he added.
Yusef Al Yusef, managing partner of Investcorp’s private wealth platform, said: "We have worked closely with Riverside and AEP, to expand and strengthen the platform to better serve customers in the off-road end markets space in North America and Europe."
"We wish the company all the success as it moves forward with its growth journey," he added.
According to Roberts, AEP is another example of Riverside’s commitment to investing in the specialty manufacturing and distribution industry.
To date, the firm has invested in more than 250 specialty manufacturing and value-added distribution companies globally across a wide variety of end markets. Investcorp has a long history of investing across specialty distribution sectors through several platform investments.
AEP CEO John Mosunic said: "Riverside and Investcorp were great investment partners that worked alongside us to expand the platform while significantly investing in our management team and infrastructure to position us for long-term growth."
Working with Roberts on the deal for Riverside were Principal Daniel Grinnan, Associate Abeer Irfan, Operating Partner Steve Stubitz and Operating Finance Executive Rob Carraway. Senior Partner Anne Hayes led the capital markets initiatives throughout the investment period.
The Investcorp deal team included Head of Private Equity – North America, David Tayeh, Managing Director Steve Miller, Managing Director Mike Emmet, Principal Raj Sheth and Vice President Jiachang Xiang.
Jefferies, Baird, Jones Day and Alvarez & Marsal advised Riverside, Investcorp and AEP on this transaction.-TradeArabia News Service