Behrman Capital portfolio company Pelican Products has acquired Hardigg Industries, its main competitor, for approximately $200 million.
It was “challenging” and “more expensive than we anticipated”, said founder and managing partner Grant Behrman of putting the transaction’s financing in place during the fourth quarter of 2008.
The transaction used 3.5 times leverage and included $75 million of equity and $125 million of mezzanine financing led by GSO Capital, said Behrman. GE Antares led the effort to keep in place Pelican’s senior debt facility, which was achieved at an increased rate.
Behrman said the purchase of Hardigg is a “highly complimentary add-on acquisition” with a vast number of synergies.
Behrman Capital began making overtures to Hardigg in 2004 after the firm acquired protective casing manufacturer Pelican in October 2004, said Behrman. After pursuing the company for three and a half years, Hardigg retained investment bank Harris Williams to represent it in a sale and Behrman Capital prevailed in an auction process with a handful of buyers invited to participate.
Behrman Capital’s third and most recent fund closed on $1.2 billion in 2001 and is nearly fully invested. The fund’s final platform investment was made in April 2005 with the firm retaining some capital for add-on acquisitions.
Fund III has the capacity for one or two additional add-on investments and will be fully invested around April 2009, Behrman said.
The New York and San Francisco-based firm began raising its fourth mid-market fund in 2007 targeting an undisclosed amount. Behrman targets investments in the defense, specialty manufacturing, outsourcing, healthcare and information technology sectors.