PNC Recaps Griffith Energy

Speaking of dividend recaps.

PNC Equity Partners has taken a recap on portfolio company Griffith Energy to the tune of 1.5x its investment, the firm told peHUB. Manufacturers and Traders Trust Company led the arrangement of the senior debt facility. JPMorgan, HSBC and TriState Capital Bank also participated. The deal leaves the company with slightly debt than before, very roughly in the range of a 2x debt to Ebitda ratio.

PNC purchased Griffith Energy, a New York-based propane and heating oil distributor, five years ago. Between then and now the firm has worked to upgrade IT infrastructure, integrate several tuck-in acquisitions, and change the pay structure for drivers and consolidate the company’s field office locations, said Jack Glover of PNC Equity.

PNC has spoken with potential suitors for the company “on a very targeted basis,” but not formally shopped it. According to Glover, “Oil prices did not cooperate (with the company) for the first five years. In the last eight months, they’ve come around.”

The firm clearly jumped on that upswing. PNC took the opportunity to return some money to investors, since a full exit is less likely in an uncertain M&A market. When the exit market looks more promising, potential suitors for Griffith Energy could include Master Limited Partnerships like Amerigas, Inergy, or Suburban Propane, or a financial buyer, Glover said.