CASE STUDIES
Communications Supply Corporation
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Business
Communications Supply Corporation (“CSC”) was the third-largest distributor of low voltage infrastructure products in the United States (per the company’s estimate) at the time of exit. More than 90% of CSC revenues were derived from sales to the enterprise segment, which included large corporations, institutions and government entities. CSC had over 10,000 active customers and bought its products from a core group of 40 manufacturers.
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Situation
The sell-side advisor approached Harvest due to Harvest’s historical experience in the distribution industry. Harvest felt its industry knowledge and familiarity with management and the company gave it an edge in the CSC process.
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Harvest Partners Investment
In May 2004, Harvest purchased CSC with the existing management team. To fund the acquisition Harvest arranged the debt financing, which included a senior credit facility and a mezzanine note. In addition, Harvest arranged equity co-investment capital for the transaction.
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Investment Thesis
- Attractive company dynamics
- Geographic expansion opportunities
- Industry recovery
- Strong management team
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Value Creation
- Leveraged dominant market position
- Drove end-user business
- Acquisitions
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Outcome
- Sold CSC to WESCO International, Inc. in November 2006.
