Transom Capital Group (“Transom”), an operations-focused middle
market private equity firm, is pleased to announce the acquisition
of Virginia Tile Company, LLC (“Virginia Tile”). Virginia Tile is a
Midwest-based specialty distributor of design-centric tile,
decorative surfaces and installation accessory products
headquartered in metro Detroit. Virginia Tile will be joining
forces with Galleher, LLC (“Galleher”) to create a leading flooring
and tile products distributor of national scale with unique product
development, merchandising and fulfillment capabilities. This
milestone marks a significant change in the landscape of the
domestic flooring distribution market.
Galleher is the largest floor covering distributor in the
western U.S. and the third largest flooring distributor in the U.S.
offering hardwood flooring, luxury vinyl plank and installation
accessories. Virginia Tile is the leading tile distributor in its
core Midwest markets, with 19 showrooms across 12 states, offering
a vast assortment of tile and decorative surfaces products. The
companies sell to the professional consumer, including flooring
contractors, dealers & showrooms, commercial installers,
builders, designers & architects, and other customers.
Together, the two companies have greater geographic reach and
will provide customers with complementary products and additional
resources to solve complex problems. The combination of these two
best-in-class distributors will benefit their suppliers, customers,
and employees, while maintaining attention to detail, ingenuity and
values their reputations have each been built on. The combined
companies will be better positioned to leverage industry leading
manufacturer partnerships and collaborative teams poised for future
expansion.
The combined company will be led by Sunil Palakodati as CEO, who
will also remain President of Virginia Tile; Rick Coates as
President of Galleher; and David Burke as CFO. Sunil brings 22
years of building products industry experience, including four
years as CEO of Architectural Surfaces Group. David was most
recently CFO of Skybridge Technologies and has more than 20 years
of experience in finance and accounting, including 10 as a CFO.
Rick has 47 years of industry experience. With the acquisition of
Virginia Tile, Transom Capital will exercise its deep operational
knowledge and expertise to integrate the two companies, working
alongside management to drive growth across geographies, new
product introductions and market expansion.
“Virginia Tile has an impressive history and reputation with its
customers and suppliers and is a trusted solutions provider for
builders and contractors across the Midwest,” said Russ Roenick,
Managing Partner at Transom. “We look forward to collaborating with
management to integrate and cross-pollinate best practices among
these two leading specialty distributors to create an asset of
unique scale and national reach.”
“We are excited to build on Galleher’s momentum through the
combination with Virginia Tile, which unlocks an expanded
geographic reach, a broader product portfolio, and greater service
capabilities,” said Steve Kim, Principal at Transom.
“Harren prides itself on assembling world class management teams
and executing on an operational, sales and systems strategic plan
in an atmosphere of respect and collaboration,” commented Tom
Carver, Managing Partner of Harren Equity Partners. “In the case of
Virginia Tile, we were exceedingly blessed to have a management
team and a board who are not only fabulous executives, but also
world-class human beings. We are thrilled that the team gets to
partner with other first-class organizations in Transom and
Galleher.”
Together, Galleher and Virginia Tile will be a market leader
across surfaces and installation products in the residential and
commercial markets. The combined business will operate as an
independent entity within Transom's portfolio of companies. The
acquisition will provide additional leadership and expertise,
financial backing to accelerate product innovation, new market
expansion, and stronger customer relationships.
Sunil Palakodati, CEO said, “I am privileged to facilitate the
joining of two great companies that share a passion for providing
customers with technical solutions, partnering with industry
leading manufacturers, and building collaborative teams offering
high touch local sales support. With Transom’s support and
investment, we can accelerate our capabilities.”
Rick Coates, President of Galleher said, “We are confident that
the merging of these two companies will provide our customers
access to greater resources while offering the same attention to
detail and ingenuity in providing unique solutions to challenging
customer problems. We also believe that the merger of the two
companies will provide our employees access to greater resources
and opportunities to serve customers even more effectively, while
also creating new and exciting opportunities for personal
development and advancement.”
“The opportunity to work with Virginia Tile has been exceedingly
rewarding and it is fulfilling to be a part of a transaction when
we really fired on all cylinders,” reflected Bryan Martter, Vice
President at Harren.
PNC Bank and Blue Torch Capital provided debt financing for the
transaction. Houlihan Lokey served as the exclusive financial
advisor to Virginia Tile.
About Transom CapitalTransom Capital Group is
an operations-focused private equity firm focused on investing in
the middle market. The firm strives to create long-term value by
partnering with established businesses and helping them navigate
transformative growth. Transom’s functional pattern recognition,
access to capital, and ARMORSM Value Creation Process combine with
managements’ industry expertise to create improved operational
efficiency, significant top-line growth, cultural transformation,
and overall distinctive outcomes. Transom is headquartered in Los
Angeles, California.
About Virginia TileVirginia Tile Company is the
leading specialty distributor of ceramic, porcelain, and natural
stone tile in key metropolitan markets throughout the Midwest.
Founded in 1928 by the Stephenson family, Virginia Tile serves
trade professionals in both residential and commercial end markets
with a broad selection of premium tile and related products. VTC
was acquired from the family ownership group in 2014 and was
expanded through the purchase of ISC Surfaces (Kansas) and RBC Tile
& Stone (Minneapolis) in 2016.
About GalleherGalleher LLC, founded in 1937 and
based in Los Angeles, is an industry leader in the design,
manufacture, and distribution of residential and commercial
flooring products. Galleher, including its commercial division
Galleher Commercial, is one of the top three wholesale flooring
distributors in the U.S. with 355 employees and 33 locations across
seven states.
About Harren Equity PartnersHarren Equity
Partners is a Charlottesville, Virginia based private equity firm
dedicated to the growth and development of industry-leading
companies through the creation of strong partnerships. Harren's
strategy is to create long-term value by improving operational
performance, providing in-depth strategic analysis, and executing a
plan in partnership with portfolio company executives. Harren
professionals take time to learn the business from the beginning of
the investment process, develop and implement a strategic business
plan, and support management with the increasingly complicated
decisions associated with growing a business.
Media ContactSam Butler, for Transom Capital
Groupsam@35thAvenuePartners.com