PNC Equity Partners has recapitalized portfolio company Tangent Rail Corporation for the third time in its ownership. The Pittsburgh-based railroad maintenance company was purchased in 2005.
PNC Equity Partners announced today the
recapitalization of Tangent Rail Corporation based in Pittsburgh. Tangent
provides maintenance-of-way products and services to Class I railroads,
short line railroads, and owners of industrial track and is particularly
focused on the sourcing, treatment and environmentally responsible
recycling of wood crossties.
The recapitalization was the third such transaction since Tangent Rail
was acquired by PNC Equity Partners and management in October 2005, and
resulted in the payment of a dividend to all shareholders of the company
. Senior debt was provided by GE Antares Capital, GMAC Commercial
Finance LLC and Golub Capital, and subordinated debt was provided by
Babson Capital Management LLC.
“Tangent Rail’s performance has significantly exceeded our expectations
since the acquisition,” said Justin Bertram, vice president of PNC
Equity Partners. “The resurgence of the rail sector combined with
strong execution by the management team created an opportunity for us to
realize a portion of the value in our investment, while also rewarding
the management for their excellent performance to date. The fact that
Tangent was able to complete this transaction in a difficult credit
environment was a testimony to the confidence that our lenders have in
both the rail industry outlook and the company’s position as a key
supplier to the industry,” said Justin Bertram, Vice President of PNC
“Tangent is an excellent example of a company that fits our core
investment strategy of investing in well-positioned companies in niche
markets,” said David Hillman, partner of PNC Equity Partners. “We plan
to continue building on Tangent’s success to date by seeking strategic
acquisitions, and supplying management with the resources they need to
grow the business
“Over the last three years, PNC Equity has provided valuable strategic
counsel at the board level, and has been very hands-on when needed on
the financial side of our business,” said William Donley, president and
chief executive officer of Tangent Rail. “Their relationships with key
lenders, along with their management of the transaction process, were
instrumental in completing the recapitalization. We look forward to
continuing our relationship with PNC as we pursue various opportunities
PNC Equity Partners is represented on Tangent Rail’s board of directors
by Bertram, along with David Hillman, partner, and Gary Zenter, retired
former president and partner.
PNC Equity Partners invests in important companies operating in
micro-marketsTM, making private equity investments of $10 million to $30
million in leveraged buyouts, recapitalizations and large minority
financings of middle market companies with enterprise values between $25
million and $150 million across a variety of industry sectors.
Investments for PNC Equity Partners are made by PNC Equity Partners II,
L.P., a private equity firm managed by an affiliate of The PNC Financial
Services Group, Inc.