Cox Transportation Services, Ashland, Virginia
Based near Richmond, VA, Cox Transportation Services, Inc. and Cox Truck Brokerage (collectively “Cox” or the “Company”) specialize in transporting time-sensitive full truckload freight on a local, regional, and national basis for a variety of customers. The Company was founded by John Cox in 1982. John Cox had gradually reduced his involvement with the business, turning over responsibilities to his president, Jay Smith. Eventually, John Cox wanted to realize the full liquidity on his 100% ownership and agreed to sell the Company to Jay Smith as a management buyout. During early 2014, Capital One Bank learned of the opportunity and recommended Tecum Capital Partners to assist, given the two financial firms had a great working relationship from another transaction. Tecum principals met with Jay Smith and Capital One and helped structure the management buyout transaction. Tecum, Capital One and Jay Smith partnered together and provided the necessary capital to facilitate the transaction, which closed September, 2014. Marriott & Co, an investment banking group based in Virginia advised Mr. Smith on the deal, allowing him to earn controlling interest of the business. The overall transaction was a win-win for everyone. After nearly three years of good performance, Tecum Capital’s debt and equity positions were successfully recapitalized. With this recapitalization, Tecum realized a successful return for its investors and Jay Smith was able to obtain full undiluted ownership, while Capital One remained involved as the senior lender.
DeAngelo Brothers, Inc. ("DBi"), Hazelton, Pennsylvania
DeAngelo Brothers, Inc. (“DBI”) is headquartered in Hazelton, PA, and is a provider of transportation infrastructure services serving government DOTs, railroad, industrial, oil and gas, homeowner associates and golf course clients. Tecum was first presented with this investment opportunity in December 2014 after DBi incurred operating losses following an international expansion initiative which forced the Company to recapitalize in order to maintain sufficient bonding levels. BNY Mellon-Alcentra, KCAP Financial, and Tecum Capital were selected as the capital providers to lend $35.0 million of subordinated debt facilities to the Company. During the first year of Tecum’s investment, DBi completed a complex add-on acquisition which gave DBi a large footprint in the state of Texas. The acquisition was a challenging integration for Management, but ultimately ended up being a tremendous success that added significant value to the overall company. After only two and a half years in the investment, Tecum had a full realization when DBi was sold to Sterling Partners which is a Chicago based private equity firm. Although it was a challenging investment at times, Tecum and the other capital providers were supportive of the strategic vision of DBi Management which ultimately allowed Tecum to achieve a very strong return.