Target Company Information

One Equity Partners ("OEP"), a prominent middle market private equity firm, has acquired a majority stake in Rosboro from Wynnchurch Capital. Rosboro is a distinguished manufacturer of glued laminated timber ("glulam"), which is an engineered wood product widely utilized in various building and construction applications, along with an extensive range of lumber products. Wynnchurch Capital will maintain a significant minority interest in the company. The financial details of this private transaction remain undisclosed.

Headquartered in Springfield, Oregon, Rosboro operates its own sawmills and glulam production facilities, allowing it to produce stock, non-stock, and custom glulam efficiently. The company’s products are distributed through a well-established network of wholesale distributors and dealers across the United States, serving a diverse clientele that relies on Rosboro for the industry's top-quality glulam products and next-day availability.

Industry Overview in the United States

The construction industry in the United States is currently experiencing a robust recovery, driven by several economic factors such as increasing housing demand and the need for sustainable building materials. Glulam, in particular, has seen a surge in popularity due to its superior strength and potential to replace traditional building materials like steel and concrete. As the focus on environmentally-friendly construction practices grows, glulam stands out as a sustainable alternative sourced from responsibly managed forests.

Furthermore, the U.S. residential housing market is showing signs of steady growth, with single-family housing starts rising to meet increased demand. This trend suggests a bright future for companies like Rosboro that are at the forefront of producing innovative wood products. The net migration towards western states in the U.S. is further propelling this growth, as it necessitates new housing developments and renovations in established residential areas.

Moreover, the increasing popularity of residential remodeling projects is creating additional demand for high-quality building materials, including glulam products. The ongoing trend of using engineered wood in construction, to enhance aesthetics while ensuring structural integrity, is another growth driver for Rosboro and others in the sector.

Finally, with glulam gaining a larger share of the structural materials market, stakeholders in construction and design are increasingly recognizing its merits in terms of design flexibility, environmental sustainability, and cost-effectiveness, reinforcing the overall industry's potential.

Rationale Behind the Deal

The acquisition of Rosboro by OEP is strategically positioned to capitalize on various market trends that favor engineered wood products over traditional construction materials. OEP Managing Director Matthew Hughes highlighted that Rosboro stands to benefit from several favorable growth drivers, including rising residential construction and increasing interest in sustainable building practices. The collaboration with Rosboro's CEO Rich Babcock aims to harness these trends for further business expansion.

OEP's investment is expected to enhance Rosboro's operational capabilities and market reach. Their experience in building industrial enterprises, coupled with strong relationships within the timber industry, will be instrumental as Rosboro prepares to scale its operations and maximize growth opportunities.

Investor Information

One Equity Partners ("OEP"), established in 2001, is a middle market private equity firm with a focus on industrial, healthcare, and technology sectors across North America and Europe. The firm is well-regarded for its track record of identifying transformative business opportunities and executing strategic mergers and acquisitions to build market-leading companies. With completed transactions exceeding 300 globally, OEP brings a wealth of experience and resources to the partnership with Rosboro.

OEP is known for its differentiated investment approach, characterized by a dedicated and senior team committed to generating long-term value for its partners. The firm's global presence, with offices in major cities such as New York, Chicago, Frankfurt, and Amsterdam, further underscores its capacity to support portfolio companies in expanding their market presence.

View of Dealert

The deal between OEP and Rosboro represents a promising opportunity for both parties involved. Given Rosboro's strong market position as a producer of high-quality glulam products and the favorable industry dynamics, OEP is positioned to leverage its expertise to enhance Rosboro's growth trajectory. The increasing shift towards sustainable construction materials strengthens the rationale for this investment.

Furthermore, the partnership is set to benefit from OEP's industrial acumen and expansive network, which can facilitate enhanced operational efficiencies and market penetration. Rosboro’s established reputation and operational capabilities combined with OEP’s strategic resources ideally align to meet the burgeoning demand for engineered wood products in construction.

In conclusion, this acquisition appears to be a sound investment that not only promises immediate growth potential but also aligns with emerging trends towards sustainability and high-quality construction. If executed well, this collaboration could solidify Rosboro's position as a market leader for years to come while presenting significant value for OEP and its stakeholders.

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