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Kelso's CBP Sale Shows Resurgence in Real Estate

"We haven't seen a deal like this in half a decade," says investment banker at ACG New York event

If private equity firm Kelso & Co. succeeds in selling Custom Building Products (CBP) a transaction reportedly worth about $800 million, the deal will be an important sign of the "slow, painful resurgence of the real estate economy," says Christopher Chase, managing director in the industrial group of Morgan Joseph TriArtisan, speaking at ACG New York's 6th Annual Manufacturing & Logistics Conference.

"We haven't seen a deal like this in half a decade," Chase says. The sale demonstrates that "liquidity is developing in the M&A market for building materials companies," Chase tells Mergers & Acquisitions.

The move comes as companies look to sell off real estate assets as the housing market bounces back.

Kelso picked up Custom Building in 2005 for $600 million. The Seal Beach, Calif.-based company specializes in flooring materials, and also sells grout, installation systems and tools.

The PE firm has reportedly hired Barclays to find a buyer.

Since 1980, Kelso has invested in more than 115 companies. The New York firm is currently investing from its eighth fund, which it closed in 2008 with about $5.1 billion in capital commitments. Its portfolio companies include Delphin Shipping LLC, Nivel Parts & Manufacturing Co. LLC and Power Holdings.

-Mary Kathleen Flynn and

Allison Collins


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