Target: Kurt Versen
Price: $100 million
Seller: Audax Group
Sponsor: Hubbell Inc.
Return Multiple: 3x
After watching other lucrative exits take place in the same sector, Audax Group cashed out of niche lighting company Kurt Versen Co. recently after boosting revenue over its 32-month investment period.
The Boston and New York-based shop earned 3x its investment on Jan. 14 when it sold the company to strategic buyer Hubbell Inc. for $100 million. Sell-side investment bank Edgeview Partners brokered the deal.
Drawing equity from its inaugural $500 million fund, Audax Group paid an undisclosed sum in May 2005 for the Westwood, N.J.-based maker of ornate lighting fixtures for hotels, conference rooms and other uses. The firm typically invests in companies generating revenues of between $25 million and $500 million.
During its ownership, Audax Group bulked up Kurt Versen’s sales force, reduced manufacturing costs and installed a new chief financial officer, Cory McClelland. The firm’s initiatives helped result in EBITDA growth of more than 60 percent, leading to a return of 3x Audax Group’s invested capital, said Geoffrey Rehnert, co-CEO and former Bain Capital managing director.
During Audax Group’s holding period, deals for niche lighting companies gained popularity, giving the firm more incentive to cash in on its efforts. The Genlyte Group, another electrical components company, made four acquisitions between May 2006 and February 2007 before Philips acquired the company earlier this month for $2.7 billion. And back in 2005, Square D Co., a manufacturer of electrical power distribution and control systems, acquired Juno Lighting in a deal valued at $610 million.
Audax is investing form its $1 billion Audax Private Equity Fund III.—B.V.