Valore Ventures has found a common denominator in a segment of the storage sector that ranges from weapons at a big Marine Corps base in Twentynine Palms to football helmets and shoulder pads for lockers under construction for the Los Angeles Rams’ stadium in Inglewood.
The Beverly Hills-based commercial real estate investor recently partnered with New York City-based private equity firm Grays Peak Capital to acquire McMurray Stern Inc., a Santa Fe Springs-based provider of everything from custom shelving and lockers to racks and office storage solutions.
“We are partnering with (Grays Peak) because we are looking to get more into the private equity world,” said Kenny De Angelis, owner and principal with Valore Ventures.
The privately held McMurray Stern – which is expected to generate about $15 million in revenue this year – could become the first of other similar firms Valore Ventures buys in the disparate niche. It’s now in preliminary talks about rolling up a company in Northern California and another in Orange County, according to De Angelis.
Those two firms generate a combined $14 million to $17 million in annual revenue, he estimated.
“We are looking at this as a vehicle to make more acquisitions,” said De Angelis of the McMurray Stern purchase.
De Angelis earned his corporate M&A spurs with commercial real estate acquisitions scattered throughout the Southern California region. The McMurray Stern acquisition represents Valore Ventures’ first tapping of private equity money.
The storage market involves in-house designers who work with McMurray Stern, and architects and manufacturers who design and build tailored storage systems for everything from art masterpieces at the J. Paul Getty Museum, to weapons and ammunition for the Marines at their sprawling Inland Empire base in Twentynine Palms.
“The market is pretty hot right now,” De Angelis said.
He cited an office storage and organization trade report forecasting total industry revenue growth of 61.1 percent between now and 2023 – to $3.9 billion, up from $2.4 billion in 2017.
There are larger storage rivals based elsewhere in the United States, including Charlotte, N.C.-based Patterson Pope Inc., which sells mainly in the U.S. Southwest, and Dallas-based Southwest Solutions Group Inc., focused on the U.S. Mountain States and Texas. But Valore Ventures is interested in rolling up storage companies in the U.S. West, particularly in California, Arizona and Nevada.
American Construction Bulks Up
American Construction Source added another two building materials suppliers, making it three deals in a week for the newly created outfit.
Santa Monica-based private equity firms Clearlake Capital Group and Angeles Equity Partners created American Construction Source on Sept. 26, making it the parent of recently acquired Springfield, Mo.-based building materials distributor Meek’s Lumber Co.
The private equity firms acquired Edwards Building Center and Breckenridge Building Center in Colorado for an undisclosed amount of cash Oct. 2, tucking them both under the American Construction parent.
Edwards and Breckenridge provide custom home-builders, building professional and do-it-yourself customers a portfolio of lumber and building materials and services in key Colorado urban markets.
Angeles Equity officials said the acquisition is immediately accretive and adds two iconic brands to support the American Construction Source goal of creating a leading national building products distributor.
Transom Makes Noise
Los Angeles-based private equity firm Transom Capital Group announced the sale of Eastern Acoustics Works, a unit of Loud Audio, to RCF Group in Italy.
The deal is the third and final divestiture by Transom of a business line of Woodinville, Wash.-based Loud Audio since the company was acquired in October 2017.
The sale of EAW to the RCF Group is expected to help Loud to develop and expand its Mackie brand of amplifiers, headphones, mixers, recording equipment, portable PA systems, speakers and studio monitoring equipment.
Other brands sold by Transom included the Ampeg bass amps and pedals to Yamaha Guitar Group Inc. in May, and Martin Audio loudspeaker systems to U.K. private equity firm LDC, the private equity arm of Lloyds Banking Group, in July.
Ken Firtel, a co-founder and managing partner of Transom Capital Group, said Loud Audio generated revenue of $100 million before Transom began divesting business lines. He declined to disclose the company’s current revenues.
Firtel didn’t rule out future acquisitions for Loud Audio, which retains several lines of business, including the Mackie brand.
“Opportunistically, there aren’t any in the pipeline – there’s nothing near term,” Firtel said.
Have a deal tip? Staff reporter Pat Maio can be reached at [email protected] or (323) 556-8329.
