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$11.6 million invested in four firms in 2006
BY Lisa R. Brown
(reprinted from the St. Louis Business Journal, MAR. 31, 2006)
Bush O'Donnell Capital Partners invested $4 million in a buyout of Miami-based Regal Kitchens Inc. in March. The investment is part of Bush O'Donnell's Eagle Fund I LP, of which Bush O'Donnell has invested $39 million of the $75 million Small Business Investment Fund since its inception in December 2003.
Bush O'Donnell was part of a buyout group that acquired Regal Kitchens, a kitchen cabinet and countertop manufacturer. Bush O'Donnell supplied $4 million, and New York-based Fieldston Investors SIGI LLC, C3 Capital Partners LP and Capital South Partners supplied $9 million. The excess purchase price was funded by PNC Bank.
"The demographics of the South Florida market and the influx of Latin Americans, Europeans and baby boomers in the market in the last couple of years has been a boon to the building industry, particularly in the Miami area," said Scott Fesler, a Bush O'Donnell principal who oversaw the Regal deal. "We wanted to grow along with the market down there."
The Regal Kitchens investment caps off a flurry of deals for the Eagle Fund, which has invested between $1.5 million and $4 million in 13 publicly or privately owned businesses since the Eagle Fund was formed. In 2006 alone, Bush O'Donnell has invested $11.6 million in four companies, focusing on the building and consumer products industries.
Bush O'Donnell's principals are William "Bucky" Bush, Jim O'Donnell, Wayne Smith, Matt Koster and Fesler.
Bush O'Donnell's other deal in March was a $3.1 million acquisition of Western Window Systems LLC, a Phoenix-based manufacturer of custom windows. Bush O'Donnell partnered with St. Louis-based The Omnia Group LLC, making the Western Window Systems deal their first acquisition together. The Omnia Group is led by Managing Partner Chuck Emmenegger.
Koster, who oversaw the Western Window acquisition, said Bush O'Donnell has not invested in suppliers to the residential and commercial building industry before. "This did not occur because of any trend; it's more of an anomaly," he said. "We probably won't do other purchases in the housing market."
Bush O'Donnell viewed Western Window as an attractive company for investment due to its activity in growing residential markets. Western Window manufactures custom windows and patio doors for luxury homes, hotels and commercial properties. "Western Window is a nice, growing company," Koster said. "It sells into the luxury market in Phoenix, Hawaii and Southern California. It has good housing-growth demographics favoring it. For the last few years, Phoenix has been in the top five for housing starts in the country. There are a lot of high-end homes, with people who are buying second homes of $3 million and more."
In February, Bush O'Donnell invested $3 million in Shaver Foods, a food products distributor in Fayetteville, Ark., and $1.5 million in St. Louis-based Whitney Design, a distributor of nonelectrical laundry organization products.
"We are now a little bit more than half invested in the Eagle Fund," said O'Donnell. "We're pleased that the projected returns available to us on these investments conform to our original projections when we formed the fund."
Reprinted with permission from the St. Louis Business Journal,
©2006 all rights reserved.
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