Charterhouse Group to make 7x logistics exit(3)

New York-based Charterhouse Group will sell waste management logistics company Oakleaf Global to New Mountain Capital for $655 million.

The Charterhouse Group has agreed to sell its interest in outsourced waste (management?) logistics company Oakleaf Global Holdings to New York-based private equity firm New Mountain Capital for $655 million (€478 million). The sale will provide Charterhouse with a 7x return on capital invested.

Charterhouse bought Oakleaf in April 2003 for approximately $30 million. At that time, Charterhouse partner David Hoffman said that the rationale for the acquisition was “just really getting its growth”.

“We saw Oakleaf as a company that would have dynamic organic growth, but could also be a great platform for adding on other services,” Hoffman noted.

Oakleaf contracts waste management orders from retailers, restaurants, hotels and other clients out to local waste haulers. Between 2004 and 2007 Charterhouse built the business up through six add-on acquisitions.

The acquisitions expanded Oakleaf’s geographic footprint and product menu, and allowed the company to develop environmentally friendly services. The add-ons also allowed Oakleaf to “cross fertilise” while selling new accounts, Hoffman said. While Charterhouse held Oakleaf, the company reported that revenue grew six times; in 2003, Oakleaf had total revenues of around $70 million.

The deal is expected to close in mid-August. Robert W. Baird & Co. was financial advisor to Oakleaf while Proskauer Rose provided legal advice.

The deal is a large one for New Mountain, which targets deals between $100 million and $300 million. The firm began seeking investment opportunities in the popular logistics sector in early 2005. This is New Mountain’s second logistics investment, after the acquisition of third-party logistics company Inmar earlier this year.

Charterhouse was formerly the US investment arm of UK-based Charterhouse Bank. The firm became an independent entity in the mid-1980s and raised its first fund in 1989.