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Andrew Williams, a director at Charter Capital Partners Andrew Williams, a director at Charter Capital Partners Courtesy Photo

Charter Capital advises Kentucky furniture manufacturer in deal with PE firm

BY Sunday, August 28, 2016 02:20pm

GRAND RAPIDS — An investment banking adviser believes the current environment in the contract furniture industry should lead to more deals getting done before the end of the year. 

Andrew Williams, a director at Charter Capital Partners and head of the firm’s national contract furniture industry practice, said the sector mirrors what’s going on in other industries. 

“Contract furniture is no different than the broader North American economy with a lot of baby boomers identifying a succession plan in their businesses,” Williams told MiBiz. “There are certainly more deals to come yet this year.”

Williams served as lead on the transaction advisory team for Louisville-based KFI Seating, which last week announced a deal with Weller Equity Partners, also of Louisville. In the deal, two of the company’s owners looked for an equity partner to buy out a third owner who was looking to retire, as well as give the firm resources to grow, he said. The three co-owners were “able to achieve their financial and personal goals,” Williams said. Two partners remained with the company after the deal. 

As the company went to market, it garnered “significant interest” from strategic investors and private equity firms alike, Williams added. Terms of the deal, which closed July 29, were not disclosed. 

The response to the KFI deal was emblematic of the capital chasing opportunities in the broader industrial sector, said Williams, who has long ties to contract furniture. 

“In contract furniture, M&A remains very healthy with too much capital chasing … deals out there,” he said, adding that since the KFI deal was announced, he’s already received calls from other prospects. 

Charter Capital, which also operates two Indiana-based offices in South Bend and Indianapolis, first connected with KFI Seating during the 2015 NeoCon contract furniture trade show in Chicago. The company, which manufactures seating and table products, had looked at another deal Charter was representing at the time and stayed in contact, according to Williams. 

“With our roots in Grand Rapids and our contacts across the country, we’re working on projects all over the U.S.,” he said.

Charter Capital formed the contract furniture practice in 2013, announcing it at that year’s NeoCon. Since then, the firm has worked on deals involving all three levels of the industry, including OEMs, suppliers and distributors. The company represented Interphase Interiors, Sauder Manufacturing, The Worden Co., and Bold Furniture on recent transactions. 

The KFI Seating deal was the first for Weller Equity since the fund formed in September 2015, according to a report in Louisville Business First. The PE firm looks to invest in lower middle-market companies in the Mid-South region. In particular, Weller seeks out companies with strong management teams and growth opportunities. 

For his part, Williams expects to see dealmaking continue to heat up as more baby boomers finally make the decision to act on their succession plans. 

“We’ve seen some third-party transactions and others are (transitioning their companies) to gen two or the management team,” Williams said. “It’s finally really starting to heat up.”

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