Lower middle market firm Brynwood Partners has made the final exit from its third fund with the sale of art supply company Utrecht to Topspin LBO for an undisclosed amount.
Brynwood bought Utrecht in 1997, making the investment from its 1996 vintage fund, the $250 million (€180 million) Brynwood Partners III. The Utrecht exit is the fund’s last.
Brynwood managing partner Joan McCabe said her firm focussed on growing the number of Utrecht’s store locations and strengthening its management team.
“When we bought Utrecht it was a little business with nine locations, owned by two guys,” she said. “Now it’s a national chain with 35 stores and a strong management team.”
The two original owners, who founded the business after World War II, have since retired.
For Topspin, a middle market firm based in Long Island, New York, the deal is the first investment out of its second and most recent fund, which closed on $115 million in May. It is the firm’s first buyout-only fund; its first fund, which closed on $213 million in August 2000, targeted both venture capital and buyouts.
Topspin was attracted to Utrecht’s strong, stable operating history, said managing director Steve Lebowitz.
“It’s not as susceptible to changing consumer tastes as a lot of retail consumer products are,” Lebowitz said.
He said Topspin liked that Utrecht is well respected among artists, has a long history and has been performing well in recent years. Beyond continuing to expand the number of its locations, Lebowitz said Topspin is not planning any major changes to the brand.
“We think that they can continue with the strong momentum that they’ve had,” he said.