Daily News: June 1, 2012

The Sterling Group Completes the Sale of Roofing Supply Group

The Sterling Group, a middle-market private equity firm based in Houston, announced that it has finalized the sale of Roofing Supply Group, LLC (RSG) to funds managed by Clayton, Dubilier & Rice, LLC (CD&R). Terms of the transaction were not disclosed.

RSG is the fourth largest distributor of roofing supplies and related materials in the United States, with 59 locations in 24 states. RSG has grown significantly in recent years, driven by strategic and operational initiatives undertaken by The Sterling Group in partnership with management. Since Sterling acquired RSG from its founders in 2006, EBITDA increased by more than 50% despite a record decline in housing starts that has yet to rebound.

“The investment in RSG exemplifies Sterling’s investment philosophy and operational approach,” said Kevin Garland, a partner at The Sterling Group. “For thirty years, Sterling has focused on partnering with management to drive strategic initiatives and grow businesses for all shareholders, regardless of market cycles. We have worked closely with management to make dramatic improvements to RSG’s procurement, sales, pricing and to expand the company’s network into strategic markets. The result has been what we believe to be outstanding financial performance in the face of difficult end market conditions.”

Mike Farrell, CEO of RSG, said, “RSG has always had an excellent culture and best in class customer service efforts, but it was the resources and partnership with the Sterling team that enabled us to achieve new levels of success with the business. We look forward to continued growth under our new ownership.”

RSG was a portfolio company of Sterling Group Partners II, a fund controlled by The Sterling Group, L.P.