Rotunda Capital Partners Invests in Value Added Distributors, LLC

Partnership positions leading provider of fluid power products for continued growth

BETHESDA, Md. & EVANSTON, Ill.--(BUSINESS WIRE)--Rotunda Capital Partners (“Rotunda”) has invested in Value Added Distributors, LLC (“VAD” or “the Company”), in partnership with the existing owners and management team.

Founded in 1995 and headquartered in Shawano, WI, VAD is a distributor of hoses, tubes, seals, couplings, and related products to specialty vehicle OEMs and other mobile fluid power users. VAD operates out of 17 facilities across the Midwest and Southern US and provides highly value-added services like custom fabrication, assembly, kitting, and vendor managed inventory solutions.

“Rotunda was searching for the right platform in the fluid power industry for several years driven by the highly technical nature of the products, diversified and growing end markets, and the highly fragmented nature of the industry,” said Rohit Dhake, Principal at Rotunda. “VAD hit everything we were looking for - a leading position in the fluid power space, a diversified customer base, a long history of organic growth, heavy integration into their customers’ daily operations, and a top tier management team that knows what it takes to win.”

Dan Lipson, Managing Partner at Rotunda, added “VAD has built a strong base from which to build upon and we believe a partnership together can help accelerate their growth. We are aligned on how to capture the multiple growth avenues that lie ahead for the Company, including opening additional branch locations to better serve our customers with high touch local service and product expansion through acquisitions of distributors in adjacent product categories already used by our customer base like filtration, gaskets, AC assemblies, wire harness, kitted fasteners, and motion control systems.”

John Fruehwirth, Managing Partner at Rotunda added, "This transaction further exemplifies Rotunda’s deep experience investing in founder and family-owned businesses and highlights our continued interest in attractive investments in the industrial distribution sectors that we believe could benefit from our ability to drive rapid growth and expansion."

Mike Kostelnik, VAD founder and CEO, said “We are excited about our partnership with Rotunda and the growth we can achieve together. We have a long history of organic growth within our core product categories, and we believe the resources from Rotunda will help us hasten that growth and better service our customers. Together, we believe we can expand into new geographies through both greenfield and acquisitions, continue expanding within our existing customers by out servicing the competitor, and further enhancing our service capabilities like fabrication, assembly, and VMI.” Kostelnik added “It was clear from our first meeting that Rotunda would be a great partner that understands our business, our culture, and our commitment to the highest quality customer service.” Mike Kostelnik and his senior management team, including David Burt and Larry Lambie will continue to lead the business.

The Rotunda team includes Dan Lipson, John Fruehwirth, Rohit Dhake, Cara Hauan and Alex Lavery. U.S. Bank served as financial advisor to the Company, Mayer Brown LLP served as legal advisor to Rotunda on this transaction. Financing was provided by TPG Twin Brook Capital Partners.

About Value Added Distributors, LLC

Value Added Distributors, LLC is a distributor of hydraulic hose assemblies, kitting solutions, and managed inventory services, delivering applied technology and value-added solutions to a wide range of industries. For more information on Value Added Distributors, visit us online at https://vadtek.com/.

About Rotunda Capital Partners

Rotunda Capital Partners is an operationally oriented private equity firm focused on transforming family-founder owned companies into dynamic, data-driven platforms able to achieve and manage significant growth. Since its founding in 2009, Rotunda has partnered with management teams to build great businesses within three primary sectors: value-added distribution, asset-light logistics and industrial, business & residential services. Rotunda strives to achieve replicable results by implementing its Rotunda Performance System to create strategic alignment, develop lean processes and create robust, data-driven infrastructures. For more information, visit www.rotundacapital.com.