Allied to Sell Hillman Companies for $510 Million

Jason Sandefur

Allied Capital Corp. signed an agreement to sell industrial distributor Hillman Companies Inc. to an affiliate of Code Hennessy & Simmons LLC, a Chicago-based private equity firm. CHS will pay $510 million for Hillman, including repayment of debt.\ Net cash proceeds to Allied are estimated at $192 million. Allied will provide about $47.5 million in new financing to Hillman as part of the deal expected to close during the second quarter of 2004. Hillman�s management will continue as owners in the company, which will still trade on the AMEX.
�Hillman represents an excellent investment opportunity for CHS and leverages our experience with distribution businesses,� remarked Peter Gotsch, a CHS partner. �The company is an industry leader with a strong track record of profitable growth.�
In September 2003 Allied estimated the enterprise value of Hillman at $430.5 million. Washington, D.C.-based Allied acquired Hillman in 2001 during a management buyout of the company formerly known as SunSource. The sale marks Allied�s exit from the fastener industry.
Hillman bought FAS-N-IT and the Anchor Wire/DIY business from Fastenal in 2002. It also acquired certain assets of Lowe�s specialty fastener business from R&B Inc. Hillman reported sales of $286.8 million in 2002, with fasteners accounting for 57% of revenue. The Cincinnati-based company distributes fasteners, anchors, keys and other specialty items to hardware and home center stores. Hillman is headquartered at 10590 Hamilton Ave., Cincinnati, OH 45231. Tel: 513 851-4900 Fax 630 317-1001 Web: hillmangroup.com
CHS is a private equity firm founded in 1988 with oversight of $1.5 billion in capital funds. CHS owns 19 companies with combined annual revenue of $4 billion. The firm is headquartered at 10 South Wacker Dr., Suite 3175, Chicago, IL 60606. Tel: 312 876-1840 Fax 312 876-3854 Web: chsonline.com �2004 FastenerNews.com