Patty Tascarella, Senior Reporter
Pittsburgh Business Times
Hampton Township-based ASW has five locations; this is the warehouse at its Hampton Township headquarters.
Automotive Systems Warehouse LLC, based in Hampton Township, has been acquired by an investor syndicate led by one of Pittsburgh’s biggest private equity firms.
The investors teamed with the company’s management. The eight-figure deal, a mix of equity and subordinated debt financing, keeps ASW’s leadership at the helm with fresh powder and resources to fuel growth and capitalize on opportunities.
“I am excited to bring in partners whose values align with what we have built for over 40 years,” Bob Van Kirk, who founded ASW in 1978, said in a prepared statement.
Van Kirk built the wholesale warehouse distributor of automotive paint, body and equipment products to a five-location company employing 75. The other sites are Philadelphia; Atlanta; Knoxville, Tennessee; and High Point, North Carolina. Exact terms of the recapitalization were not disclosed, nor was the size of the investors’ equity stake.
Now ASW can move forward on strategic priorities such as geographic expansion, private label product development, expanded inventory availability and opportunistic acquisitions.
The syndicate was led by Wexford-based Tecum Capital Partners, marking the first platform investment in its newly raised $305 million fund. Tecum is the region’s fourth-largest private equity firm. Stephen Gurgovits Jr., Tecum’s managing partner, said his firm’s investment was “on the high end” of its $5 million to $20 million range.
Co-investors included Siguler Guff & Co. LP, a New York-based private equity firm; Centerfield Capital Partners, based in Indianapolis; and UMB Family Wealth, a division of UMB Financial Corp. (NASDAQ: UMBF), which is based in Kansas City, Missouri.
It was a very local deal.
First Commonwealth Bank, based in Indiana, Pennsylvania, provided senior debt financing. Confluence Advisors LLC, a Wexford-based investment bank, served as the exclusive financial advisor to the investor group. Three Pittsburgh law
offices provided transaction advisory services — Clark Hill and Metz Lewis worked with the investor group and Houston Harbaugh represented ASW.
Talks began over the summer. Gurgovits’ first encounter with ASW had happened when he made a wrong turn while heading to the nearby CrossFit gym for a workout.
The transaction was basically fueled by succession issues.
“The founder wasn’t looking to sell,” Gurgovits said. But, he added, Van Kirk was amenable to “putting a friendly deal together with local folks” supporting the executive team led by CEO Rodney King, who is Van Kirk’s son-in-law.
There was much about ASW that appealed to Tecum.
“We like the business and we like the people running it, starting with Rodney King,” Gurgovits said. “Throw in the fact that it’s local. That checks a lot of boxes right out of the gate. The more we started to dig in, the more we liked it.”
ASW, through its five strategically located warehouses, consolidates more than 300 core vendors to offer tens of thousands of unique products, including key automotive product categories such as paint and coatings, abrasives, tools and equipment, to the collision repair sector. It wants to add more locations, organically and through acquisitions.
“We’ve got our sights set on the South,” Gurgovits said. “I’d say from Texas to the East Coast is all viable for us from an organic and potentially acquisition strategy.”
Walt Rausch, Confluence vice president, said his firm was excited to work with the management team and investor group to help facilitate the next phase of growth for ASW.
“Bob and Rodney and their team have built an industry-leading business,” Rausch said in a prepared statement. “We have the utmost respect for Tecum and have had multiple successful outcomes with them in the past.”
The deal was Confluence’s fourth in two months, all of which involved advising Pittsburgh companies. The December transactions were Special Pathogens Laboratory on its sale to Pace Analytical and Paragon Foods, which was acquired by Sysco Corp. In January, Confluence advised Allegheny Recycling Products on its sale to 48forty Solutions.
Tecum confirmed in January that it had closed its third and largest SBIC fund to date. SBIC, short for Small Business Investment Company, means the U.S. Small Business Administration is matching the money raised up to the SBA’s cap of $175 million. Investors in the fund included 21 banks whose commitments were nearly $75 million. Several are based in the 10-county Pittsburgh metro — TriState Capital Bank, NexTier Bank, First Commonwealth Bank, S&T Bank and Dollar Bank.
From the Pittsburgh Business Times:
https://www.bizjournals.com/pittsburgh/news/2022/02/04/automotive-systems-warehouse-acquired.html