Brazos wraps up debut fund with 3.7x exit

Dallas-based Brazos Private Equity Partners has sold food distribution business Strategic Equipment and Supply Corporation to mid-market market firm Audax Group.

Terms of the transaction were not disclosed, though a source with knowledge of the situation said the exit generated a 3.7x return multiple for Brazos. The sale represented the ninth and final exit from Brazos’ debut fund that collected $250 million in 2000. 

“We were able to grow this business through a combination of acquisitions, geographic expansion and customer additions,” Brazos co-chief executive officer Randall Fojtasek told Private Equity International. Since acquiring Strategic Equipment in 2005, Brazos has helped add new customers including Outback Steakhouse, Logan’s Roadhouse and Ruby Tuesday. The firm also completed a number of operational improvements during the holding period, including consolidating facilities and introducing new product lines.

“We’ve been active in distribution over the years and food service distribution has very similar attributes to other distribution platforms that we’ve invested in,” Fojtasek said. 

Brazos’ Fund II collected $400 million and is fully invested, having completed eight acquisitions, including industrial distribution company ORS Nasco, frozen foods business Golden Country Foods and smoked meats company Sadler’s Smokehouse. Brazos’ $715 million Fund III is close to 70 percent invested.

Boston-based Audax group has combined Strategic Equipment with portfolio company TriMark USA. 

Audax is investing its Fund IV that closed on its $1.25 billion hard-cap last December. Audax launched the fund in 2011 with a $1 billion target.