Prospect Partners Invests in Niche Provider of High Energy-Efficient Lighting Systems
Energy Solutions International Becomes Prospect Partners' 30th Platform Company
CHICAGO, ILL.—July 31, 2007: Lower-middle-market private equity firm Prospect Partners, LLC is excited to announce the formation of ESI Lighting, Inc. to invest in Energy Solutions International, Inc. (ESI) of St. Paul, Minn., a leading provider of high energy-efficient lighting systems for industrial, retail and commercial buildings. The transaction was a recapitalization in partnership with ESI's management team. ESI Lighting becomes Prospect Partners' 30th platform company and 65th investment since the firm's inception in 1998.
ESI designs, fabricates, assembles and distributes high energy-efficient fluorescent lighting systems that either upgrade or replace inefficient lighting sources often found in warehouses, manufacturing facilities, schools and retail buildings. Because a single building may have a variety of lighting needs, from illuminating "high bay" spaces 20 feet above the floor to assembly lines to aisles, ESI's solutions are made-to-order, either software-engineered or created from the company's broad line of lighting products. ESI sells its systems nationwide primarily through strategic alliances with electrical and lighting distributors and their direct sales forces. Depending on the application, the key purchase decision-maker may be a building owner, electrical engineer, facilities manager or energy service company.
"In a fragmented industry, ESI really stands out as a niche market leader led by an exceptional management team," says Rick Tuttle, a Principal at Prospect Partners. "ESI has created a unique distribution channel that utilizes specific distributors to drive its lighting upgrade initiatives into the marketplace. In addition, ESI's strong design and engineering competency, its solutions-oriented approach to developing high-quality systems and a general movement by the industry toward 'green' lighting alternatives make the company an exciting investment with substantial growth prospects."
ESI's management team includes Jay Barnett, President and Chief Executive Officer; Mark Tastad, Vice President of Design and Engineering; Kristine Steinke, Vice President of Finance; and Jan Fritsche, Vice President of Operations. Management continues to hold a significant equity interest in the company.
"We are thrilled to work with Prospect Partners," says Mr. Barnett. "The firm has a great reputation and deep experience growing niche companies. We are absolutely committed to our heritage of providing leading-edge high energy-efficient lighting solutions. Prospect Partners shares this commitment and, we believe, will provide the right combination of financial capital and strategic guidance a fast-growing company like ESI needs at this juncture."
Prospect Partners and management seek to grow ESI organically and through select add-on acquisitions of niche energy-efficient lighting companies.
Mr. Tuttle and Prospect Partners' Vice President David J. Choe represent Prospect Partners on ESI Lighting's Board of Directors.
Transaction Marks 30th Platform Company Built by Prospect Partners
ESI Lighting is the 30th platform company and 65th investment for Prospect Partners, the nation's most active investor in niche companies with revenues typically between $10 million and $30 million.
Since its inception in 1998, Prospect Partners has focused exclusively on management-led leveraged buyouts and recapitalizations of lower-middle-market companies that occupy unique market niches. Prospect Partners typically seeks majority control positions in which additional capital is available to support platform companies' growth, both organically and/or through select add-on acquisitions of other businesses in similar or complementary market segments believed to help maximize the values of the platforms over time.
"We are a highly opportunistic investor with considerable expertise in the small-company market segment," Mr. Tuttle says. "We close a lot of deals, both platforms and add-ons. We also employ a disciplined investment approach that has served us well, resulting in our proven ability to grow our portfolio companies through a range of economic cycles, market conditions and business circumstances."
Prospect Partners' platform companies span a wide range of niche consumer, commercial, specialty distribution and select service markets throughout the United States. For example, the 11 platform companies in the firm's current fund, the $165 million Prospect Partners II, L.P., reflect Prospect Partners' appetite for investment variety. The portfolio includes holdings in the following market segments: residential entry door systems; post-secondary schools; ethnic foods; commercial fixtures; specialty packaging; residential pools; industrial equipment rentals; truck and RV components; plumbing tools; and home improvement.
Prospect Partners is actively seeking additional platform and add-on investment opportunities for Prospect Partners II, L.P.
About Prospect Partners
Prospect Partners, LLC
of Chicago, Illinois is a leading lower-middle-market
private equity firm, managing $270 million in two funds.
Since its inception in 1998, Prospect Partners has focused on management-led
leveraged acquisitions of small niche leaders with revenues typically
between $10 million and $30 million; the firm has invested in 65 leading companies across a wide variety of niche consumer, commercial, specialty
distribution and service markets throughout the United States.