News

Acquisition

September 06, 2006

The Sterling Group, L.P. Completes Acquisition of Roofing Supply Group

The Sterling Group, L.P. (“Sterling”), a Houston-based private equity firm, today announced that it has finalized the acquisition of a majority interest in the entities comprising the Roofing Supply Group (“RSG”).

Headquartered in Dallas, Texas, RSG is one of the largest wholesale distributors of roofing supplies and related materials in the United States. Through its network of 55 branches in 21 states, RSG provides one-step distribution services from the roofing product manufacturers to roofing contractors, home builders, retailers, and other end users.

Ron Pugh, founder of RSG, started the first branch in Houston in 1981. He was joined by Vin Perella and Rodney Burns, who opened the second branch in 1984, and then later by Dale Lowe to form the core management team and majority shareholders of RSG. Vin Perella has been named CEO of RSG at the closing of the acquisition, and Ron Pugh and Dale Lowe will remain active with RSG as board members and consultants to the company.

“Since the inception of RSG, our focus has been on our partner relationships and a continued emphasis on the entrepreneurial spirit throughout our organization. Continuing our culture, the key ingredient to our success was essential and Sterling provided the support necessary to maintain our culture and continue our successful growth. Sterling is a great fit and our future looks very bright together,” said RSG founder Ron Pugh.

“The people of RSG have built a tremendous business based on strong relationships with customers and suppliers and a remarkable record of successful growth. The Sterling Group is very pleased to have the opportunity to support and participate in their continued success,” said Hunter Nelson, a Principal with Sterling.

“I am extremely excited about partnering with The Sterling Group. They have embraced the culture that has made RSG the success that it is and have allowed our existing partners the ability to maintain an equity position in their branches. I am humbled and honored to lead such a talented and dedicated team,” said Vin Perella.

The acquisition was financed primarily with equity from Sterling Group Partners II, L.P. and its limited partners, as well as significant reinvestment by the RSG management team.

About The Sterling Group, L.P.
Founded in 1982, The Sterling Group (www.sterling-group.com) is a private equity investment firm that targets controlling interests in basic manufacturing, industrial services and distribution companies. Typical enterprise values of these companies range from $100 million to $500 million. Sterling has sponsored the buyout of over 30 portfolio companies and numerous add-on acquisitions for a total transaction value greater than $7 billion. Currently, Sterling has $600 million of committed capital under management through two funds, including Sterling Group Partners II, L.P. Current portfolio companies include Panolam Industries International, Inc., North American Construction Group Inc., Propex Fabrics Inc. and CST Industries, Inc.

For additional information:
The Sterling Group, L.P.
Kevin Garland
(713) 877-8257
kgarland@sterling-group.com



Acquisition

August 11, 2006

The Sterling Group, L.P. Announces Acquisition of CST Industries, Inc.

The Sterling Group, L.P. (“Sterling”), a Houston-based private equity firm, today announced that it has finalized the acquisition of CST Industries, Inc. (“CST”) from CSTI Holdings LLC, an entity controlled by Don Wagner, CST’s President and CEO, and George K. Baum Capital Partners, L.P., a Kansas City, Missouri-based private equity fund.

Headquartered in Kansas City, Kansas, CST is a leading global manufacturer and erector of factory coated metal storage tanks. The Company’s comprehensive product offering includes bolted and factory welded tanks for use in a wide variety of applications, aluminum geodesic domes, and agricultural feed and waste storage systems. CST serves numerous end markets including water, wastewater, fire protection, oilfield, agriculture, industrial liquid, plastics, chemicals, minerals, food, construction materials and energy. CST’s manufacturing facilities are located in Parsons, Kansas; DeKalb, Illinois; Winchester, Tennessee; and the United Kingdom.

“This company and its predecessors have manufactured tanks for over 100 years, and we intend to continue to support management in their growth plans,” said Frank Hevrdejs, Chairman of Sterling. “We have great respect for Don Wagner, Ron Stier and the company they have built, and are excited about the opportunity to partner with CST’s management team, which has proven its ability to grow the business globally by expanding sales of the company’s tanks into new markets.”

“CST has had success in growing its business because of its great employees and the advantages of its products,” said Mr. Wagner, who has been the President and CEO of CST and its predecessor since 1990. “Ron Stier has been an integral part of the company for nine years and is well prepared to lead CST to the next level. This company is a great platform for growth, and with the financial and operating assistance of the Sterling Group, the future is very bright.”

“It’s an exciting time for our business and we are looking forward to our partnership with Sterling. We clearly share a common vision of growing our business through satisfying our customers across our many markets,” said Ron Stier, the recently-promoted CEO of CST. “Don has been instrumental to the success of CST and, personally, a great partner. We are pleased he will continue to be active on our Board providing continued support to our management team.”

The acquisition was financed primarily with equity from Sterling Group Partners II, L.P., as well as a significant reinvestment by the CST management team. BNP Paribas arranged debt financing for the transaction.

About The Sterling Group, L.P.
The Sterling Group (www.sterling-group.com) is a private equity investment firm founded in 1982 that targets controlling interests in basic manufacturing, industrial services and distribution companies. Typical enterprise values of these companies range from $100 million to $500 million. Sterling has sponsored the buyout of 30 portfolio companies and numerous add-on acquisitions for a total transaction value greater than $7 billion. Currently, Sterling has $600 million of committed capital under management. Current portfolio companies include Panolam Industries, North American Construction Group and Propex Fabrics.

For additional information:
The Sterling Group, L.P.
Kevin Garland
(713) 877-8257
kgarland@sterling-group.com



Acquisition

March 01, 2006

Panolam Industries Completes Acquisition of Nevamar to Form Premier Decorative Laminates Company

Panolam Industries International, Inc., the North American market leader and innovator in the decorative laminate panel industry, today announced that it has finalized its acquisition of all the outstanding equity securities of Nevamar Holdco, LLC, the parent of Nevamar Company, LLC, a leading manufacturer of decorative surface products. Panolam is a portfolio company of private equity firms Genstar Capital, LLC and The Sterling Group, L.P.

With four manufacturing and six distribution centers located throughout the United States, Nevamar designs and sells decorative laminates and other surfacing materials used in commercial and residential furniture, fixtures, and cabinet markets, as well as the graphic arts industry. Nevamar features brand names including Nevamar(R), Pluswood(TM), Vinylface(TM), Lamclad(TM), and Quinella(TM). In 2005 Nevamar generated estimated revenues of approximately $200 million.

“These are exciting times for all of us at Panolam Industries,” said Robert J. Muller, Jr., chairman, CEO and president of Conn.-based Panolam. “Through innovative products, great design, and a strong distribution network, we look forward to growing all of our brands of high pressure laminates and thermally fused melamine. Incorporating the Nevamar brands into our mix and implementing strategies that have been successful for us will make all the brands stronger and will allow us to capitalize on many new opportunities in North America and around the world.”

“Panolam’s acquisition of Nevamar is a rare opportunity to combine two leading providers of decorative panels,” said Jean-Pierre L. Conte, chairman and managing director of Genstar Capital. “The acquisition will allow the combined business to offer superior products and services to its customers and will enable Panolam’s management team to create significant shareholder value by capturing numerous revenue and cost synergies.”

Genstar Capital and The Sterling Group finalized their acquisition of Panolam on September 30, 2005.

About Panolam Industries International, Inc.
Panolam Industries (www.panolam.com) is a market leader and innovator in the decorative laminate industry. The company’s products, which are marketed under the widely recognized Panolam((R)) and Pionite((R)) brand names, are used in a wide variety of residential and commercial indoor surfacing applications, including kitchen and bath cabinets, furniture, store fixtures, case goods, and other applications. High pressure laminates (HPL), thermally-fused melamine (TFM), fiber reinforced laminate (FRL(TM)), Leatherlam(R), Conolite(R) aircraft laminates, and Panolam’s engineered laminates are utilized as durable and economical alternatives for natural surfacing materials such as wood, stone and ceramic. A typical customer or end-user of decorative overlays might utilize TFM, HPL, FRL(TM) or Leatherlam(R) for different surfaces of the same project. As a vertically integrated manufacturer, Panolam produces decorative surfaces that offer unparalleled quality, variety and flexibility to customers worldwide.

About Genstar Capital, LLC
Based in San Francisco, Genstar Capital (www.gencap.com) is a private equity investment firm that makes leveraged investments in quality middle-market companies. Genstar Capital works in partnership with management to transform its portfolio companies into industry-leading businesses. With more than $900 million of committed capital under management and significant experience investing in businesses, Genstar focuses on selected segments of the life sciences, business services, and industrial technology sectors.

About The Sterling Group, L.P.
The Sterling Group (www.sterling-group.com) is a private equity investment firm founded in 1982 that targets controlling interests in leveraged buyout investments in basic manufacturing, industrial services and distribution companies. Typical enterprise values of these companies range from $100 million to $500 million. Sterling partners with management teams to acquire companies where it has identified specific opportunities to grow and improve the business. Sterling has sponsored the buyouts of 30 portfolio companies and numerous add-on acquisitions for a total transaction value greater than $7 billion. Sterling’s current fund, Sterling Group Partners II, L.P. has $470 million of committed capital.

For additional information:
The Sterling Group, L.P.
Kevin Garland
(713) 877-8257
kgarland@sterling-group.com



Acquisition

October 04, 2005

Genstar Capital, Sterling Group Complete Acquisition of Panolam Industries

Private equity firms Genstar Capital, LLC and The Sterling Group, L.P. today announced that they have finalized the acquisition of Panolam Industries International, Inc. in a transaction valued at $345 million. Management of the purchased organization will also participate in the company’s ownership.

With five manufacturing facilities and three distribution centers in the US and Canada, Panolam designs and manufactures decorative laminate panels that serve as durable and economical substitutes for natural surfacing materials such as wood, stone and ceramic. Commercial and residential uses of these laminates include cabinets, countertops, display cases and restaurant furniture. Panolam is based in Shelton, Connecticut.

“We’re looking forward to working with Genstar and Sterling to continue to build on the successes we’ve achieved,” said Bob Muller, chairman, president and chief executive officer of Panolam. “Our customers depend on Panolam’s commitment to top-quality, cost-efficient products, and serving our customers remains our top priority.”

“We understand this industry very well given our ownership of Panolam from 1996 to 1999, and we couldn’t be more excited to be working with Bob Muller and his team again,” said J.P. Conte, chairman and managing director of Genstar Capital. “We are particularly looking forward to supporting the company’s expansion into new markets and new products.”

Genstar and Sterling’s acquisition of Panolam was financed with $150 million in high yield debt and a $135 million senior term loan. Financing was led by Credit Suisse First Boston and Jefferies & Company.

About Genstar Capital, LLC
Based in San Francisco, Genstar Capital (www.gencap.com) is a private equity investment firm that makes leveraged investments in quality middle-market companies. Genstar Capital works in partnership with management to transform its portfolio companies into industry-leading businesses. With more than $900 million of committed capital under management and significant experience investing in businesses, Genstar focuses on selected segments of the life sciences, business services, and industrial technology sectors.

About The Sterling Group, L.P.
The Sterling Group (www.sterling-group.com) is a private equity investment firm founded in 1982 that targets controlling interests in leveraged buyout investments in basic manufacturing, industrial services and distribution companies. Typical enterprise values of these companies range from $100 million to $500 million. Sterling partners with management teams to acquire companies where it has identified specific opportunities to grow and improve the business. Sterling has sponsored the buyouts of 30 portfolio companies and numerous add-on acquisitions for a total transaction value greater than $7 billion. Currently Sterling has $600 million of committed capital under management through two funds, including the recently closed Sterling Group Partners II, L.P. Prior to 1991 Sterling raised equity on an individual transaction basis. Current portfolio companies include Exopack, North American Construction Group and Propex Fabrics.

About Panolam Industries International, Inc.
Panolam Industries International, Inc. is the North American market leader and innovator in the decorative laminate panel industry. The company offers an integrated, all-inclusive product array at a broad range of price points, including decorative overlay papers, industrial laminates and specialty resins. Panolam employs more than 1,000 people in its five manufacturing facilities (Huntsville, Ontario; Norcross, GA; Albany, OR; Auburn, ME; Morristown, TN) and three distribution centers (Elkhart, IN; Rancho Cucamonga, CA; Covington, GA).

For additional information:
Genstar Capital
Andrea Ginsberg
(415) 751-2017
aginsberg@gencap.com

The Sterling Group, L.P.
Kevin Garland
(713) 877-8257
kgarland@sterling-group.com