Altus, Dunrath in $7m acquisition

The lower mid-market specialist and security infrastructure investor have teamed up to enlarge their portfolio company Gichner Systems Group by acquiring Charleston Marine Container, which makes logistic containers.

Altus Capital Partners and Dunrath Capital have acquired steel container manufacturer Charleston Marine Containers as a bolt-on acquisition to their portfolio company Gichner Systems Group, a supplier of lightweight aluminum shelters for the military, in a transaction valued at approximately $7 million.

“The beauty of bringing these two companies together is that they integrate the product line all the way from customised lightweight aluminum shelters to the generic steel segment of the container market,” said Elizabeth Burgess, founder and senior partner at Altus Capital.

Stephen Beitler, founder and managing director of Dunrath, said he hopes that combining Gichner’s expertise in tactical military containers and Charleston’s experience in logistic container systems will lead to the development of new products for both military and commercial use.

“The major container manufacturing companies like CIMC [China International Marine Containers], the

Military trailer:
Investment opportunity

basic thing they’re doing is creating empty boxes. We produce the box, but we also do a lot of other stuff that adds value to the box” Beitler said.

Beitler said the company fits out  the box with electrical systems, interior furnishings and tools that enable soldiers to have a portable workspace wherever they go.

“The stuff inside is worth a lot more than the box”, Beitler said.

Altus and Dunrath acquired Pennsylvania-based Gichner in the summer of 2007 as a platform company in the military container system market. Altus, which specialises in investing in lower mid-market manufacturing firms, took a majority stake in the company and asked Dunrath, which specialises in investing in security and defense companies, to co-invest.

Beitler said the two firms had been looking at Charleston as a bolt-on acquisition for about ten months prior to the transaction. The company was put up for sale by the US affiliate of UK-based parent Sea Containers Limited, which was in bankruptcy and was looking to liquidate non-core assets.

Chicago-based Dunrath is currently investing out of its Capital Infrastructure Surety Fund, which invests in growth-stage safety, security and defense companies. With committed capital of $100 million, the fund will be about two-thirds invested as of the close of the Charleston purchase.

Connecticut-based Altus is currently investing out of its second fund, the Altus Capital Partners Fund, which has $80 million of committed capital and is also two-thirds invested. Including Gichner, the fund is invested in eight platform companies.

Both Beitler and Burgess said they hope to consider additional bolt-on acquisitions for the combined company, which will have annual revenues of about $100 million and 240,000 square feet of additional manufacturing capacity.