EGL Holdings & Anvil Capital

Situation

How does a lower mid-market private equity group find the perfect deal when its investment criteria—from specific sub-industries in a narrow geographic region to numerous precise financial and operational requirements—are so exact that only a select few deals qualify? Ask Anvil Capital and you'll find the answer: Intralinks Dealnexus®.

Boston-based Anvil Capital invests in established, privately-held manufacturing and service companies operating in the northeastern United States. Typical characteristics include revenues of $5-25 million, significant opportunity for organic and inorganic growth, established and sustainable profit margins, a strong competitive position, and a solid operating management team.

Anvil Capital typically looks long and hard for the right investment opportunity. This time it was far easier when Intralinks Dealnexus delivered the proverbial needle in a haystack and Anvil Capital appeared as a high-ranking buyer match for a blind deal profile taken to market by EGL Holdings.

Located in Atlanta, Georgia, EGL is a merchant banking firm focused on merger and acquisition advisory services and providing capital to early-and growth-stage companies. One of EGL’s clients, Air Temp Mechanical Services, a well-established heating, ventilating, and air conditioning (HVAC) services company in Connecticut, was looking for a strategic investment partner to help take the company to the next level.

As it turns out, one of Anvil Capital’s portfolio companies is a successful generator service company and the partners were looking for a new platform investment with similar characteristics. So far, they had come up empty, but Intralinks Dealnexus’ deal-matching algorithm identified the connection and recommended Anvil Capital as a top prospect.

Ben Giess, managing partner and cofounder, Anvil Capital, explains, "We looked at seven or eight other HVAC service companies in the northeast, but none of them had exactly what we wanted in terms of a commercial business with strong, recurring revenue."

Richard Lawry, cofounder and partner, EGL Holdings, notes, "One of the strengths of Intralinks Dealnexus is the balance it strikes between protecting confidentiality while capturing critical pieces of information about the deal. Our blind deal profile described what Air Temp did as a business, its EBITDA, its focus on service and maintenance contracts, and a management team looking to stay on—everything that would pinpoint the right buyer."

Solution

When EGL Holdings created a blind deal profile on Intralinks Dealnexus for its client, Air Temp Mechanical Services, 135 buyer match results were instantly generated. Later, upon sharing the deal, EGL received 5 to 6 high-quality inbound responses from potential buyers in a matter of hours.

"When I saw the teaser that Richard put out on Intralinks Dealnexus, I could tell right away this was an opportunity we should definitely follow up on," says Giess. Giess picked up the phone and called Lawry directly and, in a few days, they were engaged in serious discussions with Air Temp's owner. The match made by Intralinks Dealnexus resulted in an investment in Air Temp Mechanical Services by Anvil Capital and its partners.

Lawry remarks, "There were some unique financial criteria that Air Temp had to satisfy for Anvil Capital, and the owner achieved those right on the button. Once that happened, we were able to close the deal quickly."

Benefits

In a few short days, Intralinks Dealnexus brought together two well-matched parties for a deal that might otherwise have languished indefinitely. For Anvil Capital, which has relationships with a number of New England-based boutique investment bankers and brokers, Intralinks Dealnexus opened a door to an opportunity—and new relationship—the firm didn't know existed.

"I would never have met Richard had it had not been for Intralinks Dealnexus," asserts Giess "I just don't focus on intermediaries outside of my region. Intralinks Dealnexus exposed us to a high-quality company in a neighboring state while the intermediary was 1,000 miles away. That's why it was particularly helpful."

For EGL's part, Lawry was able to quickly find the perfect buyer for his client in an intelligent, efficient, and discreet way, while avoiding the need to extensively pitch the deal the old fashioned way.

Intralinks Dealnexus also helps Anvil Capital find more deals of interest within its targeted focus area.

"I see five or so deals per month that show strong interest," says Giess. "Again, we are highly focused investors looking for profitability characteristics that are particularly difficult to hit. That's one of the reasons we like Intralinks Dealnexus so much."

He adds that Intralinks Dealnexus enabled Anvil Capital to reach far outside its core professional network in New England. The firm now regularly deploys buy side mandates to complement its inbound deal flow from bankers and intermediaries.

"A lot of our target companies are small and wouldn't interest the local boutique investment bankers," Giess points out. "Intralinks Dealnexus provides an efficient avenue for us because we can be so specific in what we're looking for."

Lawry concurs, "We will definitely continue using Intralinks Dealnexus to market and source deals. It led us to a successful deal with Anvil Capital and we already have another couple of sale mandates that are ideal for Intralinks Dealnexus."