As home pools get celebrated in a coronavirus summer, GHK Capital Partners found value in a maker and distributor of water treatment products.
The Greenwich, Connecticut, PE firm acquired Hasa from Peak Rock Capital for approximately $200 million, according to an industry source. Financial terms weren’t disclosed in the July 16 announcement.
Peak Rock, which bought the Santa Clarita, California, company in 2017, began evaluating a sale of Hasa less than two years into its investment.
“They [Peak Rock] had previously explored a sale last year but ultimately decided not to sell it,” a source told PE Hub. GHK did not participate in the 2019 process but initiated informal discussions with Peak Rock early this year.
Audits for Hasa and in-person meetings with management happened in the first quarter, with due-diligence wrapping up remotely in the second quarter.
With no other bidders in the running this time around, the parties reached an exclusivity agreement in March. Baird advised the company on the sale and 2019 process, the source said.
During its less than three-year-hold, Peak Rock institutionalized a family-founded business by adding new members to the management team. Hasa under the firm’s backing also expanded its geographical footprint from five to eight facilities, bulked up with an add-on in 2018, and grew its EBITDA to $25 million from the low $20 millions last year, according to the source and the press release.
GHK and Peak Rock paid similar deal multiples for Hasa, the source said, with GHK coming in as an early-stage growth investor. “There is tremendous amount of work to be done.”
That said, being a seller primarily of pool disinfectants during a pandemic has its own benefits: Swimming pools are one of few places to be safe right now.
With new financial backing from GHK, Hasa will pursue organic growth in the company’s core markets and accelerate its expansion into Texas, the source said. Additional M&A may be an ancillary growth driver.
The deal was funded with a mix of equity and debt. Senior debt financing for the transaction was led by Goldman Sachs & Co’s Specialty Lending Group and Comvest Credit Partners. McDermott Will & Emery acted as the legal advisor to Hasa.
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