GREENWICH, Conn., and HOUSTON, June 15 /PRNewswire/ -- First Reserve Corporation, a leading US-based private equity firm that specializes in the energy industry, and Tanglewood Investments Inc., a Houston-based private equity firm, today jointly announced that First Reserve Fund X, in partnership with Ohmstede's management, has executed a definitive agreement to acquire Ohmstede Ltd., a portfolio company of Tanglewood Investments.
Ohmstede is the leading manufacturer of engineered shell and tube heat exchangers in North America, as well as replacement tube bundles, parts, and aftermarket shop repair. Ohmstede also provides specialty services related to the on-going repair and maintenance of heat exchangers and related ancillary equipment at customers' facilities.
Ohmstede began concentrating its efforts on the shell and tube heat exchanger market in the 1940's. The Company eventually grew to five full- service manufacturing facilities located in Texas and Louisiana. The Company's customers include the leading refinery, petrochemical and E&C companies. Ohmstede provides manufacturing, repair and engineering services for shell and tube heat exchangers as well as specialty in-plant maintenance services. The majority of the Company's revenue is generated from aftermarket repair and in- plant specialty maintenance services.
"Ohmstede is a business that is unique within the refinery services arena and a business with leading market share," said Tim Day, Director with First Reserve. "Ohmstede has significant growth opportunities, which makes this a platform we plan to grow."
Bill Reid, CEO, Ohmstede Ltd. said, "We are very excited about partnering with First Reserve and believe that our aggressive growth strategy fits very well with First Reserve. We believe this partnership will give Ohmstede a competitive advantage and accelerate the implementation of our business model."
Michael L. Tiner, Managing Director of Tanglewood Investments, commented "During the period of our ownership, Ohmstede achieved remarkable growth in revenues and profitability and was restored to its traditional place of prominence in the heat exchanger industry. We could not be more pleased that management will now go forward in partnership with such a highly regarded firm as First Reserve that is committed to supporting the further growth and development of the Company."
Detailed financial terms of this transaction were not disclosed. The transaction is expected to close during the third quarter. Harris Williams & Co. is acting as the exclusive advisor to Ohmstede. Hiter Harris, Giles Tucker and Drew Spitzer are leading the transaction from the firm's Richmond office.
About Ohmstede Ltd.
Ohmstede, headquartered in Beaumont, Texas, is the leading manufacturer of engineered shell and tube heat exchangers in North America, as well as replacement tube bundles, parts, aftermarket shop repair and in-plant turnaround and specialty services. Since the 1940's, Ohmstede has provided products and services principally to the refining and petrochemical industries, establishing long-term customer relationships with a diverse base of blue-chip Fortune 500 and S&P Global 1200 customers. With five locations on the Gulf Coast, Ohmstede is uniquely positioned to provide its customers with an integrated shop and in-plant specialty service offering with proven results in minimizing customer down-time.
About First Reserve Corporation
First Reserve Corporation is the leading private equity firm specializing in the energy industry. Founded in 1983, First Reserve was the first private equity investment firm to actively pursue building a broadly diversified global investment portfolio of companies involved in the various energy sectors. Since raising its initial buyout-focused fund in 1992, First Reserve has completed over 50 principal transactions, investing over $3.5 billion in equity. In addition, First Reserve portfolio companies have completed more than 225 add-on transactions. Throughout its 23-year history, First Reserve has developed a strong franchise of investing exclusively in companies involved in the energy industry, utilizing its broad base of specialized knowledge as a competitive advantage.
About Tanglewood Investments Inc.
Tanglewood Investments Inc. located in Houston, Texas, is a private equity firm founded to address the need for equity capital and management expertise in established middle market manufacturing and service companies. Tanglewood focuses on businesses that exhibit the potential for growth through internal operations or add-on acquisitions. Between 1997 and 2002 Tanglewood completed 16 acquisitions that were organized into 6 platform companies. The sale of Ohmstede will be Tanglewood's second investment realization.
About Harris Williams & Co.
Harris Williams & Co., a member of The PNC Financial Services Group, Inc. , is one of the largest mergers and acquisitions advisory firms in the country focused exclusively on the middle market. With offices in Richmond, San Francisco, Boston, Philadelphia, and Minneapolis, Harris Williams & Co. represents private equity groups as well as publicly and privately held companies worldwide. Harris Williams & Co. is the trade name under which Harris Williams LLC conducts its business. Member NASD/SIPC.
