Source Capital, which invests mature, private “small-cap” companies with EBITDA of at least $1.5 million, has bought Precision Boilers, based in Morristown, Tennessee, from Tennessee Valley Ventures, LP. The details of the deal were not revealed.
We are pleased to announce that Brookwood Associates advised Precision Boilers, Inc., a portfolio company of Tennessee Valley Ventures, L.P., on the sale of the Company to Source Capital, LLC. TVV tasked Brookwood with finding a buyer that could understand the complex cash flows associated with Precision’s High Voltage Jet (“HVJ”) product, as well as the Company’s substantial international sales. Brookwood’s competitive marketing process highlighted Precision’s longstanding brand, leading market share, niche manufacturing focus, growing new business pipeline and potential as an acquisition platform in a highly fragmented industry.
The transaction yielded an attractive outcome for the shareholders and management, including a new sponsor partner interested in driving further growth. This transaction extends Brookwood’s strong track record in the manufacturing sector and represents the second time in 2010 that Brookwood has represented TVV in a portfolio company exit.
“Brookwood’s senior-level attention has been a constant in our experience with them and helped drive an excellent outcome on this transaction. Their marketing skills generated a competitive process and surfaced a winning buyer who understood the Company’s growth opportunities. This is the second time we have worked with Brookwood in the last year, and we look forward to working with them again. We would recommend them to anyone considering a sale of their business.”
-Andrew W. Byrd, President
Tennessee Valley Ventures
About Precision Boilers: Precision Boilers is a designer, manufacturer and marketer of an extensive range of boiler room products. Over 90% of sales are under the Precision brand, which has been in existence for almost 70 years. The Company’s flagship product is the technologically-advanced HVJ electrode boiler, for which the Company holds the world’s leading market share.
About Tennessee Valley Ventures: Founded in 1997, Tennessee Valley Ventures (www.tvv1.com) is an established lower middle-market private equity firm based in Nashville, TN. Investing primarily in the Southeastern U.S., TVV focuses on attractive opportunities within the niche manufacturing, food, energy and industrial service sectors. With two funds currently under management, TVV targets companies with $10 million to $100 million in revenues and strong operating margins to facilitate management-led buyouts, recapitalizations and family succession transactions.
About Source Capital: Source Capital, LLC (www.source-cap.com) was established to make equity investments in mature, private “small-cap” companies with EBITDA of at least $1.5 million. Investments are primarily in the form of management-backed leveraged acquisitions, recapitalizations and growth financings with emphasis on value creation through growth, business development and operational improvement rather than through financial engineering or excessive leverage. Source Capital partners with exceptional management teams who are excited about the growth potential of their businesses and seek a financial partner to accelerate future expansion and drive strategic and operational improvement. Source maintains offices in Atlanta, Georgia and San Francisco, California.
About Brookwood Associates: Brookwood was founded in 1989 and has grown to become one of the largest independently owned middle-market investment banking firms. Brookwood’s 22 professionals in Atlanta and Charlotte offer advisory services regarding mergers and acquisitions, financings, fairness opinions and bankruptcies/restructurings ( www.brookwoodassociates.com).