In a year that didn’t see as many exits as the year before, the Riverside Co. continued to take advantage of the sellers’ market, exiting seven investments and making it one of the most frequent sellers of companies in the middle market in 2015 and Mergers & Acquisitions’ 2015 Seller of the Year.
The Cleveland-based firm had embarked on an exit spree in 2014 and continued its strategy in 2015. In 2014, Riverside visited every one of its portfolio companies to determine which were ready for exit. This practice, coupled by the strong valuations being paid, led Riverside to exit some companies a little earlier than the firm might have under different circumstances.
For example, in June Riverside sold Emergency Communications Network (ECN) to Veritas Capital. During Riverside’s hold period, ECN sales grew by 93 percent while Ebitda grew by 112 percent. “We had laid out a five-year growth goal, but reached it in three years and we thought it was time to realize the value for our investors,” says Chris Jones, a partner with Riverside.
Riverside did a complete overhaul of the software-as-a-service-based mass notification company, almost doubling its sales revenue. Riverside completed six add-on acquisitions of competitive companies or companies in industries that ECN had wanted to break into. Additionally, Riverside added a financial reporting system, a board of directors, sales budget and a head of sales and other senior managers. ECN also moved to larger headquarters during Riverside’s tenure.
In September, Riverside sold Orliman, a Valencia, Spain-based manufacturer and distributor of non-invasive orthopedic devices, to Magnum Capital. After investing in Orliman in 2010, Riverside expanded the company through both organic growth and the add-on acquisition of a company located in France, which really accelerated Orliman’s transformation into a leading player within Southern Europe.
During Riverside’s hold period, Orliman’s sales grew by more than 50 percent and Ebitda nearly doubled. Riverside incorporated new senior leadership, invested in new product development, and increased the company’s presence in selected markets throughout the world.
In 2014, Riverside completed the acquisition of French orthopedic company Soft Medical Europe. When Riverside bought the company it has about $13 billion in sales and $4 million in Ebitda. At the time of sale, the firm had grown to $38 billion in sales and $8.5 million in Ebitda.
“Riverside is proud of the hard work we put in with our management teams to build value across our portfolio in order to generate successful exits like ECN and Orliman,” says Stewart Kohl, co-CEO of Riverside.