Successful private equity firms are adept at identifying patterns in the overall economy and taking advantage of them to invest. Wynnchurch Capital stands out as one firm that leveraged market trends in 2015. In particular, the Chicago firm continued to back companies expected to benefit from the recovery of the North American housing market, such as pool maker Latham. (Watch our video interview, below.)
Sales of new homes in the U.S. were particularly strong in 2015, although there were signs growth was slowing at the end of the year. Nevertheless, new-home sales in November were up more than 9 percent from the same month in the previous year, according to the U.S. Department of Commerce. Sales rose 14.5% in the first 11 months of 2015 compared with the same period in 2014.
Wynnchurch made investments in several companies involved in infrastructure for the housing market. A significant example can be found in United States Pipe and Foundry Company LLC. Known as U.S. Pipe, the company makes fittings and joint restraints used in drinking water and wastewater systems. The Wynnchurch website describes the company as a “critical supplier to the water infrastructure market, which is in great need of investment and repair.” U.S. Pipe has snapped up several companies since Wynnchurch and Comvest Group acquired it from Mueller Water Products, Inc. (NYSE:MWA) in 2012. In August, the company bought competitor Custom Fab, Inc., an Orlando, Florida fabricator of pipes and fittings and specialty linings and coatings.
August was a busy month for Wynnchurch. The firm invested in Latham International Holdings, Inc., a maker of residential swimming pools and components in North America. The PE firm expects Latham will benefit from the “renewed ability of American home owners to invest in their homes and lifestyles.” The Latham acquisition marked the official launch of the firm’s fourth fund, with capital in excess of $1.2 billion.
And in October, Wynnchurch completed a growth investment in Gypsum Technologies, a provider of wallboard equipment and services, alongside management and employees. The firm hopes to grow the business on a global scale.
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Corrected December 30, 2015 at 12:55PM: 4628306864001