Court Square hits ace with sale of Erico Global

Pentair Plc said on August 17 that it would buy Erico for $1.8 billion in cash. Solon, Ohio-based Erico makes and markets electrical and fastening products under brands such as Caddy and Lenton. The company has 1,200 employees in 30 countries. The sale to Pentair values Erico at about 12x forecasted 2015 EBITDA, the statement said.

The transaction represents the second time Court Square has sold Erico. It first purchased the company in 2002, when Court Square was known as Citigroup Venture Capital Equity Partners. Five years later, Erico bought back the company from Court Square in a deal valued at $675 million. (Citigroup Venture Capital spun out of Citi in 2006 and named itself Court Square.) In 2012, Erico’s management approached Court Square about making another investment, and Court Square ended up investing $300 million for a 40 percent stake, the person said.

In addition to proceeds from the sale to Pentair, Court Square has received about $70 million in dividends from Erico since 2012, the source said.

Court Square used two funds to invest in Erico. A small piece came from its second pool, which collected $3.1 billion in 2007. Most of the Erico investment came from Court Square Fund III, which raised $3.2 billion in 2012.

Fund II is producing a 12.1 percent IRR and a 1.67x total value multiple as of March 31, according to the Oregon Public Employees Retirement Fund. The third pool is producing an average IRR of 4.91 percent and an average multiple 1.04x as of March 31, data provider Bison said.

Erico couldn’t be reached for comment.

Correction: The original version of this story incorrectly said that Court Square raised $3.1 billion for its third fund in 2013. It actually raised $3.2 billion in 2012 for Fund III. This story has been corrected.