August 2010
DeltaPoint Capital Management, LLC Announces First Deal from the Firm's Fourth Fund
DeltaPoint Capital Management, LLC has formed a holding company, Biomass Acquisition, Inc. (Biomass), to acquire a controlling interest and assist in the recapitalization of PA Pellets, LLC, Choice Property Management, Inc., Choice Carriers, LLC. and Choice Brokerage, LLC. Collectively, these entities form a biomass management company that produces a variety of wood products, including wood pellets for residential heating fuel, while also engaging in forestry operations.
DeltaPoint, a Rochester, New York based private equity firm, has invested in Biomass to properly capitalize the company in order to execute on its strategy of acquiring other wood pellet manufacturers throughout the Northeast. DeltaPoint and management intend to deploy the company's acquisition strategy immediately and hope to execute on one of several already identified targets in the next six months.
The partnership between DeltaPoint and Biomass creates a synergistic union of significant available capital, acquisition experience, and a track record of successful investment combined with the capabilities, positioning and expertise of the management and workforce at the company. Former co-owners, Jason Holmberg and Luke Watson, both of whom are remaining with the business as senior managers and significant owners, feel that this recapitalization will provide the necessary growth capital to expand the business substantially over the next few years.
Jason Holmberg, Executive Vice President of the newly formed holding company, feels strongly about the potential for significant growth. "DeltaPoint's recapitalization of our company is the first step in what will be a unique and well positioned platform for substantial acquisition and consolidation in the wood pellet industry. DeltaPoint's operational expertise and access to significant capital will allow us to become a fully integrated biomass management company across the Northeast and to become an even more reliable supplier to our loyal and growing customer base", Holmberg said.
DeltaPoint focuses on investing in established businesses with annual revenue of at least $10 million in the manufacturing, distribution and specialized service sectors. The Biomass investment is the first investment that DeltaPoint has made from its fourth fund, which held its initial close in November of 2009 and continues to raise funds towards its $125 million goal.
David Waterman, Managing Director at DeltaPoint, will sit on the company's Board of Directors and George F.T. (Geff) Yancey, Operating Director at DeltaPoint, will serve as Chairman. Mr. Waterman recognizes the wood pellet industry as one that is primed for significant growth. "The formation of this holding company represents DeltaPoint's commitment to an aggressive acquisition strategy within the growing global wood pellet industry. We intend to take advantage of integrated production processes found at PA Pellets to maximize its capabilities and capacity, and more importantly to create a template for growth by acquisition. Consolidation, supply chain management, and waste reduction are not new business techniques, but our approach to the application of these techniques may be new to the wood pellet industry. We are excited on many levels.", Waterman said.
About DeltaPoint Capital
DeltaPoint Capital Management, LLC is a Rochester, NY based private equity fund manager that makes lead-sponsored investments in companies with proven cash flows and strong management teams and that are principally located in the Northeastern United States.
The firm has recently held initial close on its fourth private equity fund and is actively sourcing investment opportunities. Fund IV employs a growth oriented approach to small cap buyout opportunities in underserved markets throughout the Northeast. The fund seeks niche market leaders that are capable of significant growth. DeltaPoint identifies and implements changes necessary to accelerate this growth and achieve excellent returns.
The firm is comprised of a team of Fund Managers and Operating Directors that has substantial relevant experience in executive level management, finance, and operations. The Fund Managers and Operating Directors collectively guide the firm's investments in a wide variety of industries, including manufacturing, professional services, and distribution. DeltaPoint relies on its strong partnerships with company management teams and long history of operating and financial experience to help drive value creation at its portfolio companies.
