Wellspring Quickly Earns Back Half Its Investment in API

Wellspring Capital Management has made back half of its investment in API Heat Transfer in roughly a year, a source says.

Buffalo, N.Y.-based API completed a recap which includes a new $300 million first-lien credit facility, according to a statement Monday. API is using part of the proceeds to pay investors $80 million, about $70 million of which will go to Wellspring, the source says. That means Wellspring will get back 50% of its invested capital, the source notes.

Wellspring, of New York, targets middle-market companies. The PE firm formed API by combining API Group Holdings and ThermaSys Group Holding. Wellspring acquired ThermaSys, a maker of heat exchangers and heat exchange equipment, in February 2012. Sun Capital Partners was the seller.

Wellspring then bought API Heat Transfer from Industrial Growth Partners the following April. API produces industrial heat exchangers and heat transfer systems.

Assuming the legacy entities had been merged since the beginning of 2012, API Heat Transfer generated revenue of nearly $420 million for the 12 months ended December 31, Moody’s Investor’s Service said in April.