Sponsor Completes Profitable LBO Exit
Private equity firm Watermill Group completed the sale of fastener manufacturer Cooper Turner Beck (CTB) to Waterland Private Equity. The exit came after CTB achieved peak market share and profitability, serving as a classic case study of a successful sponsor-led roll-up and value creation strategy.
Watermill Group's investment in Cooper & Turner began in August 2017 with the acquisition of the UK-based manufacturer of high-strength industrial fasteners for an undisclosed amount. At the time, Cooper & Turner was a £40m-turnover company with a significant presence in the wind energy, construction, rail, and tunneling sectors. The deal was a cross-border acquisition designed to expand Watermill's footprint in the UK. The roll-up strategy continued in August 2019 when Watermill's portfolio company, Cooper & Turner, acquired Beck Industries, a French manufacturer of high-security bolting components. This combination created a global supplier of safety-critical fasteners with a broader range of products and a larger geographic footprint, spanning Europe, North America, and Asia. The senior management of both companies, including Group CEO Tony Brown, remained with the combined entity to drive the next phase of growth. Under Watermill's ownership, Cooper Turner Beck (CTB) underwent significant operational improvements and expansion. A key part of the value creation strategy was a focus on high-growth sectors like renewable energy. Post-acquisition, the company's year-over-year revenue growth was expected to accelerate to 25%, up from 14-15% prior to the initial buyout. The company also expanded its manufacturing capabilities, opening a new plant in Chennai, India, and increasing automation in its North American and European factories. The successful exit to Waterland Private Equity is a classic example of a "buy-and-build" strategy, common in the private equity world. Waterland, known for its own buy-and-build approach, is expected to continue this strategy, likely pursuing further add-on acquisitions to strengthen CTB's market position. This aligns with broader trends in the fragmented industrial fasteners market, which has seen significant M&A activity. In the industrial fasteners sector, M&A valuation multiples for standard distributors and manufacturers average around 6.8x EBITDA. However, companies with a specialization in high-growth areas, like the energy sector that CTB focuses on, can command premium multiples of 9.8x or higher. The sale to Waterland reflects CTB's strong position in these high-growth end markets and its increased profitability and global scale achieved during Watermill's holding period.
