Private-equity deals in the middle-market keep churning, quietly making profits for investors who are oblivious to the looming economic recession. 
Offering evidence of the healthy environment for mid-market deals, Nelson Mullins Riley & Scarborough partner Rhys T. Wilson last month closed a deal in which his client, GranQuartz Holdings LLC of DeKalb County, was bought by St. Louis investment fund Harbour Group Industries Inc. for undisclosed terms. GranQuartz sells tools and supplies to contractors who renovate kitchen countertops.
The sale of GranQuartz comes four years after the company “recapitalized” with funding from two private-equity funds: Independent Bankers Capital LP of Dallas and Hamilton Robinson LLC of Stamford, Conn. Because GranQuartz's founder, Peter de Kok, kept an equity stake in the company during the recapitalization, he was able to profit from the latest deal along with the two private-equity funds, Wilson said.
Harbour Group won the auction for GranQuartz because the private-equity firm didn’t have a debt contingency attached to its offer, Wilson said. Harbour Group self-financed its purchase of GranQuartz and plans to shop the debt on the open market at a later date. Richmond, Va. investment bank Harris Williams & Co. ran the auction for GranQuartz.
The market for private-equity buyouts of middle-market companies remains active because these private-equity funds typically finance their purchases with debt from conventional lenders who don’t subsequently securitize the debt, Wilson said.
“These lenders are not dealing with the problems with the capital markets,” Wilson said. “They don’t have to worry about re-selling their debt.”
Nelson Mullins of counsel James E. Holmes Jr. and associate Aileen L. Nagy teamed up with Wilson to finalize the transaction. Dickstein Shapiro lawyers in Washington advised Harbour Group. Hallett & Perrin of Dallas was counsel to the Independent Bankers Capital Fund and Hamilton Robinson.
GranQuartz, headquartered in the Royal Atlanta Business Park in Tucker, bills itself as the largest U.S. distributor of tools and services to bath and kitchen-countertop contractors. GranQuartz specializes in products for granite, marble and concrete countertops and floors. GranQuartz operates seven retail stores in the U.S. and two in Canada. Privately held Harbour Group owns companies involved in diverse industries, including LED lighting systems, lubricating systems and jukebox manufacturers.