Littlejohn & Co. to Sell Dana Kepner to Core & Main

Rhea-AI Summary

Littlejohn & Co. LLC has entered into a definitive agreement to sell Dana Kepner Company, LLC to Core & Main Inc. Dana Kepner is a leading water and wastewater distributor serving eight states, with a network of nineteen branches. Under Littlejohn's ownership, the Company has nearly doubled revenue and completed two strategic acquisitions. The acquisition is subject to regulatory approval and other customary closing conditions.

Insights

Market Research Analyst

The acquisition of Dana Kepner Company by Core & Main represents a notable consolidation in the waterworks distribution industry. This sector is essential for infrastructure development and maintenance, which is a significant factor for economic growth and urban planning. The strategic move by Core & Main to acquire a company with a strong regional presence in eight states and a nearly doubled revenue under Littlejohn's ownership signals a push to strengthen Core & Main's market position and expand its geographic footprint.

From an industry perspective, the waterworks distribution market is fragmented and such acquisitions can lead to improved economies of scale, better bargaining power with suppliers and an expanded customer base. For stakeholders, the short-term implications may include transaction costs and integration risks, but the long-term potential includes increased market share and revenue growth. The acquisition's success will largely depend on the effective integration of Dana Kepner's operations and the realization of anticipated synergies.

Financial Analyst

Core & Main's acquisition of Dana Kepner is a financial move that could potentially affect Core & Main's stock (NYSE: CNM) performance. Acquisitions often lead to an initial increase in expenses due to transaction and integration costs, which can affect the company's short-term profitability. However, investors typically look favorably upon acquisitions that promise long-term revenue growth and market expansion. It's essential to analyze the financial health of both companies and the terms of the deal to understand its impact on Core & Main's balance sheet and future earnings potential.

The nearly doubling of Dana Kepner's revenue under Littlejohn's ownership suggests a robust growth trajectory, which could be accretive to Core & Main's financials. Investors should consider the acquisition's financing structure, whether it involves cash, debt, or stock and how it might influence Core & Main's leverage ratios and earnings per share.

Legal Expert

The acquisition's pending regulatory approval indicates that it will be scrutinized for compliance with antitrust laws and other regulatory standards. This is a common procedure for transactions that could potentially alter market dynamics. The role of advisors such as Houlihan Lokey, Inc. and Sheppard, Mullin, Richter & Hampton LLP is crucial in navigating the legal complexities of such deals to ensure a smooth transition and to mitigate legal and regulatory risks.

For Core & Main and its stakeholders, any delay or challenge in obtaining regulatory approval can impact timelines and potentially the terms of the acquisition. It's important to monitor the regulatory review process as it can provide insights into market competition concerns and any required concessions or changes to the deal structure. The outcome of this process is a critical factor for the finalization of the acquisition and its subsequent integration into Core & Main's operations.

GREENWICH, Conn.--(BUSINESS WIRE)-- Littlejohn & Co. LLC (“Littlejohn”), a private investment firm based in Greenwich, CT, today announced that it has entered into a definitive agreement to sell Dana Kepner Company, LLC, (“Dana Kepner” or the “Company”), a premium supplier of water works material and services serving municipalities and contractors, to Core & Main Inc. (“Core & Main”) (NYSE: CNM).

Based in Denver, Colorado and founded in 1933, Dana Kepner is a leading water and wastewater distributor serving eight states. Through its network of nineteen branches, the Company combines local knowledge and an extensive product portfolio to serve its customers’ water delivery, metering, and sewer needs across the complete waterworks supply chain. Under Littlejohn’s ownership, the Company has completed two strategic acquisitions, invested in people and systems to scale the organization, and nearly doubled revenue.

Steven Raich, Managing Director at Littlejohn, said, “We are proud to have supported the development and growth of Dana Kepner’s business over the last three years. The Company remains well positioned to capitalize on multiple in-flight initiatives to extend the Company’s long track record of above-market growth. We want to thank CEO Dave Wickett for his 40 years of service to the Company and the 200+ members of Dana Kepner’s workforce for their dedication in building Dana Kepner into one of the premiere waterworks distribution brands in the industry. We wish them continued success in partnership with Core & Main.”

Dave Wickett, Chief Executive Officer at Dana Kepner, said, “Littlejohn has deep knowledge of scaling distribution businesses and their team’s close partnership with our management team has been invaluable. We are grateful for their support and look forward to our next chapter with Core & Main as we continue to identify avenues to accelerate growth, expand career opportunities for our talented workforce and enhance the value we provide to our customers and partners.”

The acquisition is subject to regulatory approval and other customary closing conditions.

Houlihan Lokey, Inc. and Sheppard, Mullin, Richter & Hampton LLP served as advisors to Littlejohn on this transaction.

About Littlejohn & Co., LLC:

Littlejohn & Co. is a Greenwich, Connecticut-based investment firm focused on private equity and debt investments in middle market companies. With approximately $8 billion in regulatory assets under management, the firm seeks to build sustainable success for its portfolio companies through a disciplined approach to engineering change. For more information about Littlejohn, visit www.littlejohnllc.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240130358373/en/

Media

Nathaniel Garnick/Grace Cartwright

Gasthalter & Co.

(212) 257-4170

Source: Littlejohn & Co. LLC

FAQ

Who is selling Dana Kepner Company, LLC to Core & Main Inc.?

Littlejohn & Co. LLC has entered into a definitive agreement to sell Dana Kepner Company, LLC to Core & Main Inc.

What industry does Dana Kepner Company, LLC operate in?

Dana Kepner is a leading water and wastewater distributor serving eight states.

How many branches does Dana Kepner Company, LLC have?

Dana Kepner operates through a network of nineteen branches.

What has Littlejohn & Co. LLC achieved under their ownership of Dana Kepner Company, LLC?

Under Littlejohn's ownership, the Company has nearly doubled revenue and completed two strategic acquisitions.

What are the conditions for the acquisition of Dana Kepner Company, LLC by Core & Main Inc.?

The acquisition is subject to regulatory approval and other customary closing conditions.