Riverside Exits Rail Company
The private equity firm’s portfolio company, Nordco, Inc., establishes how to create a profitable exit through niche investing.
June 1, 2009
As investment firms struggle to complete profitable exits despite the current environment, The Riverside Company has changed the game, achieving a 31% rate of return on its investment in Nordco, Inc.
Riverside’s sale of the rail company for 5.1x cash-on-cash return is a big win for the New York-based niche investor. During a bruising deal market, Riverside sold the company to Toronto-based Omers Private Equity.
In speaking with MergersUnleashed, Tim Gosline, a partner in the firm, said he “would not anticipate any” management changes following the close of the transaction. Gosline noted that he sees significant “opportunity in rail space and infrastructure,” and is interested in making investments in the sector.
Riverside made three bolt-on acquisitions since it purchased the platform in July 2003.
The transaction is yet another example of a Canadian pension funds acquiring a U.S. holding. This method was first demonstrated by Ontario Teachers' Pension Plan’s Claude Lamoureux, who was the former chief executive of Metropolitan Life's Canadian operations.
Nordco belies a trend of mid-market companies achieving growth through transitioning from product companies to manufacturers and service provider. According to Ned Valentine, managing director at Harris Williams, said Nordco was a single product company that now provides aftermarket suite and recurring need-based after market products and services to customers.
For more information on related topics, visit the following:
