American Industrial Buys Potomac Supply

American Industrial Partners has acquired the operating assets of Potomac Supply Corp. Financial terms weren’t announced. Potomac Supply Corp., of Kinsale, Va., makes wood products such as treated lumber, wood pellets, decking, fencing and pallets. The company filed Chapter 11 bankruptcy protection earlier this month. Jim Decker of Morgan Joseph advised Potomac along with Stephen Clarke, Alex Fisch and Si Li.

PRESS RELEASE

The Financial Restructuring Group of Morgan Joseph TriArtisan LLC (“Morgan Joseph”) served as exclusive investment banker on the sale of the operating assets of Potomac Supply Corporation, a vertically integrated forest products company based in Kinsale, Virginia, to an affiliate of American Industrial Partners, a middle-market private equity firm focused on acquiring and improving North American-headquartered industrial businesses.

Founded in 1948, Potomac Supply Corporation manufactures a diverse range of wood products, including treated lumber, wood pellets, decking, fencing and pallets, in its wood-processing and production facilities. Following liquidity constraints due to abnormally weak lumber markets resulting from the U.S. economic crisis and other internal factors, the Company filed for protection under Chapter 11 of the U.S. Bankruptcy Code in the Eastern District of Virginia (Richmond) on January 20, 2012. Morgan Joseph assisted the Company in exploring numerous strategic alternatives that resulted in the sale of substantially all of the Company’s operating assets to Potomac Supply, LLC, an affiliate of American Industrial Partners. The sale was made pursuant to Section 363 of the U.S. Bankruptcy Code.

Morgan Joseph was involved in all aspects of the transaction, including preparation of all marketing materials, due diligence, financial modeling, and negotiation of the purchase agreement.

“Our Group was retained in April 2012 to assist the company in exploring strategic alternatives, ultimately leading to the transaction with American Industrial Partners, which will allow for a new well financed future for Potomac,” said James (“Jim”) Decker, Head of Morgan Joseph’s Financial Restructuring Group. “This places the Company now in the highly capable hands of an experienced partner in the building products industry and allows Potomac to expand its capabilities for its customers.”

In addition to Mr. Decker, the Morgan Joseph team members involved in implementing the transaction included Stephen Clarke, Managing Director in the Industrials Group, and from the firm’s Financial Restructuring practice, Alex Fisch, Director, and Si Li, Analyst. Pillsbury Winthrop Shaw Pittman LLP represented Potomac.

About American Industrial Partners

American Industrial Partners (www.americanindustrial.com) is a private equity firm specializing in investments in turnarounds; leveraged buyouts; management buyouts; corporate divestitures, PIPES, structured preferred equity investments; recapitalizations; equity bridging transactions; strategic add-on acquisitions; going-private transactions; debt with warrants; carve-outs; international expansion; re-financings; project management and finance; public equity and Canadian income trust offerings in middle-market and mature companies. The firm primarily invests in industrial services, manufacturing, information technology, and materials sectors. The firm primarily invests in privately or publicly held companies based in North America with a focus on the U.S., Mexico, and Canada, serving domestic and global markets. American Industrial Partners was founded in 1989 and is based in New York, New York.

About Morgan Joseph TriArtisan LLC

Morgan Joseph TriArtisan LLC (www.mjta.com) is an investment bank engaged in providing financial advice, capital raising and private equity investing. The firm’s services include mergers, acquisitions and restructuring advice, in addition to private placements and public offerings of equity and debt.

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