Overview
Headquartered in Bristol, Virginia, United Central Industrial Supply Company, LLC (“United Central”) is the leading full-service independent distributor of consumable coal mining supplies in North America. From its seventeen branch warehouse locations across the U.S. and Canada, United Central provides one-stop shopping of over 43,000 SKU’s of roof control, conveyor systems, safety equipment, mining bits, oil products, and other general mining supplies to over 400 underground mine locations in the Appalachian, Interior, and Western coal regions of North America.
Bigelow Assignment
Obtain a liquidity event for United Central’s existing private equity investor and majority owner, Code Hennessy & Simmons LLC while affording existing management partial liquidity along with the opportunity for additional equity upside with their rollover investment. Bigelow was tasked with facilitating a leadership transition among the existing management team and the retiring CEO, and an orderly transition for the new ownership and the Company. It was important to unearth a new partner that is willing to look beyond the recent stagnant revenue history to see the underlying strength of the Company, its leadership position, and realistic growth prospects.
Challenges
Overcome the typically negative first impression of the coal industry, and its historically cyclical nature, exemplified by declining production levels over the latest five- year period.
Working with management, Bigelow led a strategic planning effort in order to identify where United Central was already the market leader, and where it could grow to become such. A customer-by-customer growth plan followed, which provided good visibility to the prospective investors, and an executable plan.
“Bigelow was instrumental in clarifying our story and closing this deal. They found us a great new partner that supports our view of the industry and how best to grow and create additional value.” Darrell H. Cole, President United Central Industrial Supply Company
“The involvement of Bigelow’s senior partners is unusual. Their methodology, process, patience and thoroughness of preparation are superior to other firms. Their ability to look at a business more than superficially is unusual.” Peter M. Gotsch, Partner Code Hennessy & Simmons LLC
Outcome
Multiple offers for the Company were obtained, at purchase prices that exceeded the client’s expectations. Management was able to select their preferred financial partner, The Riverside Company (supported by senior debt provider Antares Capital Corporation and mezzanine capital from Brown Brothers Harriman & Company), and a closing was consummated fifty days after signing the Letter of Intent.