Centerbridge to acquire agribusiness firm from Charlesbank

Middle-market firm Charlesbank Capital will sell controlling interest in GSI Holdings, the parent company of an agricultural equipment maker and distributor, to Centerbridge for an undisclosed amount.

Centerbridge Partners has agreed to purchase a controlling stake in grain- and protein-related equipment maker GSI Holdings, the third deal for the New York firm as it deploys capital from its $3.2 billion debut fund (€2.4 billion). Centerbridge is purchasing the stake from 15-year old, mid-market firm Charlesbank Capital Partners for an undisclosed amount.

GSI has annual revenues of roughly $500 million, and is “growing very nicely given some of the underlying dynamics in the agriculture industry”, said Steven Silver, senior managing director at Centerbridge.

GSI’s business includes storage, conditioning and handling within the grain market, as well as feeding and climate control systems for the protein productions markets.

Those products and services are poised for growth as demand for corn-based ethanol increases alongside the rising demand for protein in developing countries, Silver said.

“We’re excited to take the platform and move it internationally,” he added.

The deal is Centerbridge’s third, having already invested a small amount in a large builder of retirement communities (the firm declined to disclose further details at press time), and having partnered last week with Fortress Investment Group on a $8.9 billion agreement to buy Penn National Gaming, a publicly traded operator of casinos and horse racing facilities.

Founded by Mark Gallogly, the former head of The Blackstone Group’s private equity programme, and Jeffrey Aronson, a former distressed securities expert from hedge fund Angelo Gordon, Centerbridge aims to invest across capital structures and industries.

The firm targets companies of various stages and fiscal health in industries including healthcare, consumer, industrial, media, telecom, communications, financial and business services. Recently, it’s looked at various distressed businesses in the auto industry.

Centerbridge aims to make its fund the “nexus between private equity and distressed investing”, enabling it to play both sides of a market is views as countercyclical, Silver said.

The firm’s $3.2 billion fund, which closed last year, will likely invest in 10-15 portfolio companies, he said.