Gryphon and Portfolio Company News
Gryphon Investors Closes Continuation Vehicle for Vessco Water
Gryphon Investors (“Gryphon”), a leading middle-market private equity firm based in San Francisco, announced today that it has closed a single-asset continuation vehicle (“CV”) for Vessco Water (“Vessco” or “the Company”), a market-leading distribution and services platform in the water and wastewater treatment market. Apollo S3, CVC Secondary Partners, and Lexington Partners L.P. acted as lead investors in the transaction, with the Company’s management remaining large shareholders in the Company.
Gryphon’s Flagship Fund VI, a $2.7 billion fund, acquired Vessco, in partnership with the Company’s management team, in November 2020. During Gryphon’s nearly four years of ownership, Vessco has transformed its business, growing fivefold by expanding its product base and service capabilities to support its customers and expanding its footprint, while investing in the corporate infrastructure needed to support its local operations.
Gryphon Co-CEOs David Andrews and Nick Orum said, “We are excited to complete Gryphon’s first continuation vehicle with Vessco, which has substantial runway to continue scaling rapidly in a fragmented industry. This transaction delivered liquidity to Gryphon VI limited partners and provided them with an option to retain their interests in Vessco through the Company’s next phase of growth and value creation. The CV also provided new committed capital for growth and investment and will allow us to continue our support of Vessco, its management team, and its employees.”
Based in Minneapolis, Minnesota, Vessco is a high value-added distributor in the water and wastewater treatment equipment, and services market. The Company serves critical customer needs through a comprehensive suite of products, solutions and services across major market segments, including process equipment, flow control, pump and pump repair, industrial processes, and automation & controls. Its end-to-end solutions encompass design, engineering support, repair and reconstruction, and aftermarket parts and services.
“Our partnership with the Gryphon team has yielded substantial results,” said Vessco CEO Brian DeWolf. “With their operational and financial resources, we have advanced our mission to transform the water treatment industry by building strength and stability through a family of companies that provides exceptional products and services to our customers and an unwavering commitment to our manufacturers, employees, and the environment. We look forward to continued success together as we make progress toward our vision of becoming the biggest and best value-added water treatment equipment distributor in our industry, operating in all 50 states.”
Leigh Abramson and Scott Hearn, Partners and Co-Heads of the Industrial Growth Group at Gryphon, added, “Gryphon’s long experience with infrastructure and utility products and value-added distribution businesses allowed us to build a playbook to support Vessco’s growth. In partnership with a talented management team, we invested deeply in the corporate infrastructure that prioritizes collaboration throughout Vessco’s family of businesses, driving value for suppliers and customers. We expect to see continued value-creation from Vessco’s comprehensive solutions combining multiple product lines and services across geographies we serve, and increased demand for water treatment from population growth, higher water quality standards and the need to replace aging infrastructure.”
Jefferies and William Blair served as financial advisors and Kirkland & Ellis LLP served as legal advisor to Gryphon on the transaction. Vessco management was represented by attorney Peter W. Klein, P.A., of Boca Raton, FL. Akin served as legal counsel to CVC Secondary Partners and Apollo S3. Proskauer Rose served as legal counsel to Lexington Partners.
About Vessco Water
Vessco is a leading distribution and services platform providing process equipment, flow control, pump and pump repair, industrial processes, and automation & controls across the fragmented water and wastewater treatment equipment and services industry. Every day, the equipment Vessco Water sells helps clean, deliver, and reclaim water for tens of millions of people.
About Gryphon Investors
Gryphon Investors is a leading middle-market private equity firm focused on profitably-growing and competitively-advantaged companies in the Business Services, Consumer, Healthcare, Industrial Growth, and Software sectors. With approximately $9 billion of assets under management, Gryphon prioritizes investments in which it can form strong partnerships with founders, owners, and executives to accelerate the building of leading companies and generate enduring value through its integrated deal and operations business model. Gryphon’s highly-differentiated model integrates its well-proven Operations Resources Group, which is led by full-time, Gryphon senior operating executives with general management, human capital acquisition and development, treasury, finance, and accounting expertise. Gryphon’s three core investment strategies include its Flagship, Heritage, and Junior Capital strategies, each with dedicated funds of capital. The Flagship and Heritage strategies target equity investments of $50 million to $350 million per portfolio company. The Junior Capital strategy targets investments in junior securities of credit facilities, arranged by leading middle-market lenders, in both Gryphon-controlled companies, as well as in other private equity-backed companies operating in Gryphon’s targeted investment sectors.
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