Riverside scores 5x exit with sale to OMERS

OMERS has bought US rail maintenance company Nordco for an undisclosed amount from Riverside, representing a 31% gross IRR for the mid-market firm.

OMERS Private Equity, the Canadian private equity investor formerly called OMERS Capital Partners, has paid an undisclosed amount for Nordco, a Wisconsin-based rail maintenance company. Financing for the acquisition was provided by GE Capital, Allied Capital and OMERS.

OMERS acquired Nordco from US-based mid-market firm Riverside Company, for whom the sale represents a 5.1x gross cash-on-cash return and a 31 percent gross internal rate of return. Riverside had acquired the business in 2003 after a management-backed buyout and held Nordco as a cross investment between the 2000 and the 2003 Riverside Capital Appreciation Funds.

During Riverside's ownership period, the firm made several add-on investments to Nordco, including expanding the company into a new business line – repairing and rebuilding of materials, according to Tim Gosline, a partner with Riverside. 

The market environment has not been ideal for exists, but Riverside decided to try to sell Nordco despite the financial turmoil, Gosline said.

“We decided if any company could be sold in this market, it was Nordco,” Gosline said. “It's a large company with room to grow, it has a terrific market position. It would have been easy just to close the doors and batten down the hatches, but we're glad we did proceed with the exit.”

Nordco designs, manufactures and markets the equipment used in the construction, maintenance and repair of railroad tracks.

Christopher Witkowsky contributed to this report.