Presco Polymers, the Texas Workforce Commission’s current small employer of the year, recently announced its management has partnered with a private equity firm to acquire the local manufacturer.
In a press release about the acquisition, Presco CEO Joe Hardt said he “could not be happier” about the acquisition with River Associates Investments L.P., a lower-middle market private equity firm based out of Chattanooga, Tennessee. The Sherman-based Presco, which has been in business for more than 75 years, manufactures commercial marking products and customized vinyl films for the electrical, plumbing, utilities, forestry, surveying and irrigation industries.
In an interview with the Herald Democrat, Hardt said the acquisition won’t mean any changes for local employees, as he and the company’s management team have a “significant minority interest” in the company.
“River Associates announced us in their press release as their 92nd acquisition, so they’ve done a lot of deals over the years,” Hardt said. “Their intention with Presco is to try to find complimentary companies that could be aggregated with Presco and have a larger entity within the markets we compete in.”
The Texas Workforce Commission named Presco its small employer of the year during its Employer of the Year Awards in Austin in November. The awards are given by the commission to recognize businesses “whose efforts and initiatives resulted in an extraordinary impact on the state of Texas, as well as employers, workers and the community in which the employer operates.” Presco won the award after being nominated for the recognition by Workforce Solutions Texoma.
Sherman Economic Development Corp. President Kent Sharp said the employer of the year award is very prestigious considering the competitive criteria among the 24 workforce board across the state.
“Their reputation precedes them as far as employees are concerned,” Sharp said of Presco.
In the press release announcing the acquisition, Hardt said he was confident River Associates was the right partner as its management shares some of Presco’s core values and beliefs. He also said the private equity firm has a “successful track record of building companies” and he believes the acquisition will lead to the next chapter of Presco’s success.
“We are excited to have Presco join the River family,” River Associates partner Patten Pettway said in the press release. “The quality of their products and service, and position in the market are all strong attributes of the company. The management team is eager to pursue growth, and we are thrilled that they have chosen to partner with us for their next chapter.”
River Associates funded the transaction with equity from its seventh investment fund and financing was provided by NXT Capital and Northstar Capital. The press release states Presco will seek add-on acquisitions of businesses that manufacture or supply similar or complementary products, but Hardt said he doesn’t see the company leaving Sherman.
“We have quite an investment in our manufacturing operations here and most of their (River Associates) pattern is to acquire complementary companies,” Hardt said. “They really use a holding structure format, so if things go to plan in three or four years, there will be Presco and three or four other companies within a holding company controlled by the people in Tennessee.”
Sharp said the acquisition sounds like a good situation for Presco and River Associates, and he hopes it means continued growth for Sherman manufacturer.
“My greatest thing is, let’s keep them here another 75 years and keep them growing and healthy,” Sharp said.