Tangent Rail
Tangent Rail is a manufacturer and provider of maintenance-of-way products and services to Class I railroads, shortline railroads, and owners of industrial track. The company also provides treated consumer lumber products to lumber retailers and wholesalers.
PORTFOLIO STORY
How We Partnered
Transaction Dynamics
A partnership with management to acquire a corporate divestiture from RailWorks Corporation.
Investment Thesis
- Attractive market competitive dynamic with no clear secondary supplier for major customers
- Well defined “micro market” with opportunity to build market share
- Significant barriers to entry, including supply chain relationships, strategically located plants, and creosote licenses
- Long‐term contracts and strong relationships with major customers lend stability to business model
- Experienced management team dedicated to partnering for local growth
- Strong outlook for industry driving organic future growth
Incline Value Enhancement
- Refocused the company by divesting a non-core, capital intensive division
- Actively evaluated six acquisition candidates
- Recruited new CFO in 2008 to strengthen financial controls and reporting capabilities
- Grew EBITDA from $10 million to $28 million
- Completed three dividend recapitalizations during ownership
- Sold to strategic acquirer for $165 million in 2010
HEADQUARTERS
Pittsburgh, PA
STATUS
Realized
INDUSTRY
Specialized Light Manufacturing
INVESTMENT DATE
October 2005