Olympus buys Allied-backed tank manufacturer

Olympus Partners has used $110m of equity from its $1.5bn fifth fund in the buyout of Norwesco from publicly listed Allied Capital.

Connecticut-based private equity firm Olympus Partners has acquired plastic tank manufacturer Norwesco in a deal involving $110 million (€78.6 million) of equity as well as an undisclosed amount of debt.

The company was purchased from publicly listed private equity fund manager Allied Capital, which yesterday saw portfolio company Ciena Capital, the New York-based real estate lender, file for voluntary bankruptcy protection.

Norwesco, headquartered in Minnesota, produces molded plastic tanks for agricultural, water, energy and septic uses.

The company will complement existing Olympus portfolio company Snyder Industries, which provides a product similar to Norwesco’s, but in different areas of the US, Olympus founder Rob Morris told PEO.

“We can have efficiencies on the trucking side, on the purchasing side and other aspects of the businesses that combined together will be more profitable than they would be separately,” Morris said.

Olympus closed its fifth fund on $1.5 billion in May 2007.

“We didn’t spend a dollar of [Fund V] until this summer because we felt that the markets were inappropriately priced,” Morris said.

Olympus is able to obtain leverage despite credit market turmoil due to its relationships with lenders, according to Morris.

“We’ve got a lot of experience with the lenders and no lender has ever lost a dime in one of our deals so they have a reasonable amount of confidence in us,” Morris said.

The mid-market buyout firm and growth investor has roughly $3.2 billion in capital under management. Olympus focuses on the healthcare, consumer, distribution and restaurant franchise management sectors.