Chicago-based Code Hennessy & Simmons is pursuing a rollup of independent boat builders. The firm started with the acquisition of Indiana-based Rinker Boat Company, which it acquired through its fourth fund, and last week announced the merger of Rinker with Godfrey Conveyor Company, a deal that reportedly incorporates a new $30 million (€25.5 million) equity investment.
Code Hennessy partner Steve Brown, in commenting on the benefits of the merger, cited the potential synergies of the Rinker/Godfrey combination. In a statement, he called the merger “a synergistic opportunity to establish a major independent boat manufacturing and distribution organisation”.
In the original Rinker acquisition, Code Hennessy partnered with Rinker president Kim Slocum, and in this latest deal, Godfrey senior management, including Bob Deputy, Bill Deputy and Larry Deputy, will retain a significant equity stake in the combined business.
The firm and Rinker management invested $30 million of equity in the original acquisition, according to SEC filings submitted in July of last year. To finance this latest deal, Moody’s is reporting that Rinker will set up a new $154.5 million term loan, a $20 million revolver and $27 million of subordinated debt on top of a $30 million equity investment.
Code Hennessy has had an especially active couple of months. On the same day the Rinker/Godfrey merger was announced, the firm disclosed an investment in LVI Services, giving it a majority stake in the remediation services firm. Meanwhile, Code Hennessy portfolio company Otis Spunkmeyer, in September, acquired frozen cookie maker Merkel McDonald. On the exit front, the firm unloaded Precise Technology in a $257.5 million sale to Rexam.
The activity follows the closing of Code Hennessy’s fifth fund, the $1.3 billion CHS Private Equity V, in February.