Castle Harlan has agreed to acquire IDQ Holdings Inc., an automotive aftermarket company focused on do-it-yourself automotive air conditioner repair, from Arsenal Capital Partners. No financial terms were disclosed.
Castle Harlan, Inc., the New York private equity investment firm, announced today that an affiliate of Castle Harlan Partners V has signed a definitive agreement to acquire IDQ Holdings, Inc., the industry leader in Do-it-Yourself (“DIY”), branded automotive aftermarket products for servicing and repairing automotive air conditioners.
The transaction is expected to close in June and is subject to the satisfaction of various conditions.
Castle Harlan said the company will continue to operate under the IDQ name. IDQ products, such as air conditioning recharge and retrofit kits, premium refrigerant blends, specialty chemicals, straight refrigerants, and a wide range of complimentary DIY and professional use items, are sold to consumers through a blue-chip customer base representing approximately 25,000 retail stores. These include leading national chains, such as AutoZone, Advance Auto Parts, Wal-Mart, O’Reilly, NAPA, Pep Boys, and others. The company also sells a full range of commercial A/C products designed for automotive repair shops.
IDQ is being sold by Arsenal Capital Partners, a private equity firm based in New York. IDQ is headquartered in Garland, Texas and has offices in Tarrytown, New York. IDQ’s management will continue to operate the company and will be investing in the transaction alongside Castle Harlan Partners V.
IDQ CEO Michael Klein said, “We welcome the opportunity to be a part of Castle Harlan’s team. The transaction will allow us to build on our already unparalleled breadth of product offerings and give our customers, and the market in general, a strong and shared cultural focus on quality, service and value.”
He also praised Castle Harlan’s “long history of partnering with management teams to realize shareholder value through superior customer service.”
Marcel Fournier, the senior managing director who led the Castle Harlan team, said the acquisition is “an opportunity to partner with a strong, experienced management team that has built the undisputed market leader in this sector of the aftermarket industry.”
Fournier added, “We at Castle Harlan look forward to working closely with IDQ to help it continue to grow in the years ahead. We are confident that IDQ has tremendous upside potential and could also be a strong base on which to add, through acquisitions, some other valuable brands and products.”
The Valence Group acted as financial advisor to Castle Harlan in this transaction.
Castle Harlan, founded in 1987, invests in controlling interests in the buyout and development of middle-market companies in North America and Europe. Its team of 19 investment professionals has completed 50 acquisitions since its inception with a total value in excess of $9 billion. Castle Harlan currently manages investment funds with equity commitments of $2.5 billion. The firm traces its roots to the start of the institutionalized private-equity business in the late 1960s.
Castle Harlan’s current portfolio companies, which employ more than 42,000 people, include Ames True Temper, the manufacturer of lawn and garden tools and accessories, Baker & Taylor, the world’s largest distributor of books and entertainment products to libraries and retailers, and Pretium Packaging LLC, one of the country’s leading manufacturers of custom-designed specialty plastic containers for the food, pharmaceutical, personal-care and household markets.