NEW YORK—Private equity firm Riverside Co. has purchased a majority share of orthodontic components maker G&H Wire Co. from Edgewater Funds to broaden the firm's growing health care products operation.
Members of the G&H management team retained a minority interest in the natural latex elastomer health care product maker, said Graham Hearns, director of marketing and communications for Riverside, which is co-headquartered in New York and Cleveland. The company did not disclose the names of the investors.
Financial details also weren't released, but Riverside has a history of acquiring small-to mid-sized businesses valued at up to $200 million. This is Riverside's 48th health care company transaction but its first in the field of orthodontia.
Included in the deal is G&H's production and distribution plant in Franklin, Ind., where the company is based, Hearns said.
G&H employs just under 200, he said, and the work force is expected to remain intact. Elastomer product manufacturing is a mainstay at G&H, especially in the health care arena where the manufacturer produces a variety of natural latex offerings, including those that create consistent forces and resist hydrophilic uptake.
The firm, which began as a producer of looped arch wires but now manufactures an entire gamut of orthodontic force products, also supplies springs, headgear, bonding goods, instruments and related items.
It has an international customer base of orthodontists, distributors and original equipment manufacturers.
“G&H is an exceptional company and provides a wonderful foundation for growth,” said Steve Dyke, a partner in Riverside, which has $3.4 billion under management. He said the present executive team “has done a great job growing the company and we are pleased that all members of the team are remaining with the company.”
When it acquires a business, Riverside's goal is usually to keep its managers on board, which was the case with G&H. “The management team there is what got us the most excited,” Hearns said. “Their willingness to stay on was very important.”
By partnering the strong executive team with Riverside, G&H should have no difficulty reaching its next level of organic growth, he predicted.
The company also expects to grow through acquisitions. G&H is a platform business for Riverside, Hearns said, and building it up by purchasing other manufacturers is a big part of the equity firm's overall plan. The company has had a good deal of success doing that in the past with other businesses, he said.
Generally, Riverside expands a business to a point where it's larger than the size the equity firm likes to manage, he said. It then usually sells the company.
Since its inception in 1988, Riverside has made 242 acquisitions in a variety of fields. The purchase of G&H was its 19th in 2010. The firm's present portfolio of companies in North America, Europe and the Asia-Pacific region employ about 14,000.