Capstone Headwaters advises Vessco Inc. on the placement of financing for add-on acquisition

Capstone Headwaters is pleased to announce the closing of $87.0 million in financing for Vessco Inc. (“Vessco” or the “Company”), the proceeds of which will be used to help finance their latest add-on acquisition and to refinance existing debt.  The capital was provided by H.I.G. Whitehorse (“Whitehorse”). 

Based in Minneapolis, the Company serves as a manufacturer’s sales representative (i.e., value-add distributor) within exclusive territories for approximately 150 water and wastewater treatment equipment OEMs.  Their customer base primarily consists of municipalities and industrial companies that operate water and wastewater treatment facilities and the general contractors, engineering firms and consultants that advise those ultimate end users on the construction and operation of those treatment facilities.  Vessco sells a variety of water and wastewater treatment products and related services including pretreatment equipment, pumps, tanks, mixers, chemical feed equipment, valves, actuators, water softening equipment, biological treatment equipment, sludge treatment equipment and biogas treatment equipment. 

Vessco was acquired in 2018 by O2 Investment Partners, a Detroit-based private equity firm (the “Sponsor”) who has now completed three add-on acquisitions as part of a larger acquisition-focused growth strategy. 

Pat Corden, Vice President at O2 Investment Partners, commented 
“We are excited to have found such a great strategic partner in Whitehorse and look forward to working with them to support our continued growth at Vessco. The Capstone Headwaters team introduced us to a number of strong institutional lenders and provided us with strategic advice throughout the entire transaction process.” 

Kent Brown, Managing Director at Capstone Headwaters in their Debt Advisory Group, said 
“Vessco and its subsidiaries received significant interest from prospective lenders in the market who were generally attracted to the stable demand and recession-resistant nature of its industry, the Company’s favorable market position within its exclusive territories, and its large installed base of municipal customers. The financing provides the Company with an experienced capital partner that is able to support the continuation of O2’s acquisition-focused growth strategy and we are delighted to have played a part in supporting their continued success.” 

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