Private Equity Company Buys Select Interior Concepts

BOCA RATON, Fla. — Sun Capital Partners, a private-equity group, completed its acquisition of Select Interior Concepts (SIC) on Oct. 21 in a cash-for-stock deal valued at approximately $375 million.

As part of the buyout, SIC’s stock is delisted from the NASDAQ, and the company takes the name of its Architectural Surfaces Group (ASG) division.

SIC first announced the deal in early August, following several rounds of negotiations and considering other offers, according to documents filed with the federal Securities and Exchange Commission.

The deal closed after receiving approval on Oct. 19 at a virtual meeting of shareholders.

Sun Capital paid SIC shareholders $14.50 per share in cash, which represents a 32% premium over SIC’s Aug. 6 closing price and a 42% premium over its 30-day volume-weighted average price of $10.20.

“This investment plays to many of Sun Capital’s strengths, including success in the building products sector across multiple economic cycles,” said Marc Leder, co-chief executive officer of Boca Raton-based Sun Capital. “With our support, ASG will be better able to capitalize on a significant market opportunity.”

With legacy companies founded in 1992, Austin, Texas-based ASG is a premier distributor of interior building products with leading market positions in highly attractive markets. The company services its customers through a national network of 22 distribution centers and operates 20 showrooms selling proprietary brand names including PentalQuartz and MetroQuartz.

“ASG is excited to have an experienced partner focused on growth in Sun Capital,” said Patrick Dussinger, the CEO of the newly-independent ASG in Austin, Texas. “We will continue to execute our successful plan and make strategic acquisitions that will expand our market. Being a private company will allow us to accelerate value creation and we are very excited about the future.”

ASG plays a dual role as both a value-added distributor and a direct to customer/designer showroom, connecting global slab suppliers with thousands of end customers in a highly fragmented, localized market for both remodeling and new construction projects.

“It is an exciting time to begin working with Architectural Surfaces Group,” added Jeremy Stone, Sun Capital managing director. “The residential and remodeling sub-sectors of the building-products market are growing rapidly, in light of significant undersupply in housing.

“The wholesale slab market in particular is expected to experience continued growth over the next few years. We also see opportunities for tangible performance improvements to strengthen the business, including greater digitization, sales force enhancement, and consolidation in this highly fragmented market.”

 “We are very pleased to have completed this transaction, which represents the final step in a multi-phase program to maximize SIC’s value for our shareholders and other stakeholders,” said now-former SIC Chairman Brett G. Wyard.

The company sold off its Residential Design Services segment for $215 earlier this year to a subsidiary of the Blackstone investment firm.

“As we committed, the management team delivered shareholder value. I am very proud of all employees for their focus and dedication,” said Bill Varner, former CEO of SIC. “The acquisition of SIC by an affiliate of Sun Capital has been well received and supported by our customers, partners and employees and provides them with a wide array of exciting new opportunities.”

SIC began trading on the NASDAQ four years ago, with its stock rising to $13 per share in September 2019. Uncertainty over the company’s growth strategies and the impact of the pandemic caused the price to plummet to $1.69 a share in April 2020, and the exit of the company’s founding CEO, Tyrone Johnson, a few months later.

Sun Capital’s $14.50 offer included all outstanding shares. The company’s last 10-Q report filed before the initial announcement of the deal noted 25,920,533 shares as of June 30.

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