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NSCP Exits Castronics

1/30/2012 | By: Ninth Street Capital Partners

Ninth Street Completes Exit of Castronics 

Cleveland, Ohio – Ninth Street Capital Partners (Ninth Street), a Cleveland-based private investment firm, announced the sale of its first portfolio company, Castronics, to Inspection Oilfield Services (IOS), a portfolio company of Baltimore-based private equity firm, Calvert Street Capital Partners, on Jan. 31. Exiting the Kimball, Nebraska-based Company generated a 3.5x cash-on-cash return and an 81% IRR for Ninth Street’s investors.

Castronics is the leading integrated provider of finishing and logistics services for Oil Country Tubular Goods (OCTG) in the Rocky Mountain and Upper Midwest regions. The Company provides a wide range of services that include threading, rework, refurbishment, storage, and inventory management.

Ninth Street acquired the assets of Castronics in December 2009 and has spent the past two years working alongside the Company’s existing management team to foster rapid growth. Through this process, Ninth Street increased the Company’s employee base four fold to 120 full-time personnel and has made several key capital investments. The 2010 addition of a new processing plant and a new 500-acre storage and transloading facility expanded Castronics’ service offerings and enabled the Company to expand its sales and marketing efforts while attracting new customers.

The 2011 addition of inspection services solidified Castronics’ market leadership position in the Rocky Mountain and Upper Midwest Regions by allowing the Company to establish itself as a fully integrated OCTG service provider. Additionally, throughout its ownership period, Ninth Street enhanced Castronics’ operating and quality procedures while augmenting the existing management team to help drive significant revenue and EBITDA growth of 230% and 180% respectively, throughout the ownership period.

“Castronics has been an excellent investment, delivering an outstanding return in a short period of time. Our team put forth a tremendous effort working with a talented group of managers at Castronics to make a great company even better,” said Michael Weiner, Managing Partner at Ninth Street.

“We were able to execute on multiple initiatives to expand service offerings, invest in new facilities, and undertake marketing initiatives that increased sales. We have established a strong foundation for long-term growth. IOS is acquiring a well positioned business with significant upside and an outstanding management team,” Weiner said.

Ninth Street’s hands-on approach played a key role in driving growth at Castronics, bringing Ninth Street Managing Partner, Patrick Dickinson, to reside at the Company for an extended period of time. He will join the IOS Board of Directors to provide strategic guidance. 

Perry VanNewkirk, President of Castronics, added, “We look forward to continuing our positive momentum with our new partners at IOS. With the solid foundation that has been built, our future as the regional market leader is very bright.”

Harris Williams & Co. advised Ninth Street on the sale of Castronics, and McDonald Hopkins provided legal counsel.

About Ninth Street Capital Partners

Ninth Street Capital Partners is an investment firm located near Cleveland, Ohio that was founded in 2009 to make lead investments in smaller middle market companies. Ninth Street takes a hands-on operational approach coupled with comprehensive financial capabilities to focus on growing niche-leading companies with revenues of $5 million to $50 million and EBITDA of $2 million to $10 million. More information on Ninth Street may be found at its website, www.ninthstreetcapital.com.

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