Dan Ahuero and Ben Andrews knew just where to turn when the time came to add a financial partner to GHX Incorporated. GHX, which the two seasoned executives owned and managed, was a 70 year old, Houston-based, value-added distributor/fabricator of hoses and gaskets to the refining, petrochemical, oil and gas, power generation and manufacturing industries. They were looking for a partner to help them expand organically and through acquisitions.
“We knew Mike Young had extensive operational experience with companies located in multiple states, and that his expertise would be invaluable as we made strategic acquisitions, added staff and expanded our product offering,” said Ahuero. “Both Dan and I were also aware of CapStreet’s excellent reputation in the financial community” added Andrews.
During CapStreet’s investment, from May 2007 through October 2012, the company grew significantly both organically and through acquisitions. CapStreet worked with management to implement numerous strategic initiatives, transforming GHX into a platform for continued long-term growth, including the implementation of a new ERP system, a strategic pricing program and a successful marketing and branding program. In addition, GHX completed nine add-on acquisitions to expand the business nationally and diversify into new end markets. Ahuero said he appreciated that fact that CapStreet’s facilitation of the acquisition process allowed management to continue their focus on the core business.
When brothers Troy and Garry Kyle were looking for an investor-partner to help them grow their company, they had several options. “Garry and I had grown VCS as much as we could on our own, and we knew that in order to continue, we were going to need help,” says Troy Kyle.
VCS, which Troy and Garry founded in 2006, provides vendor certification and verification for healthcare facilities across the U.S. The company provides its customers with vendor credentialing and compliance monitoring services through a web-based portal to properly manage vendor representatives who regularly visit healthcare facilities.
“One of the things we liked best about the CapStreet team when we initially met them was that their promises were realistic, which immediately created a sense of trust, and they have been true to their word,” says Troy. Since its investment in mid-2012, CapStreet has worked with Troy and Garry to build out VCS’s management team and implement several strategic and operational initiatives, positioning the company for continued, rapid growth. VCS is also pursuing acquisition opportunities to expand its geographic reach and service offerings.
“We always knew our company had significant growth potential,” says Garry. “We just needed a partner with the experience and expertise to help us achieve it. CapStreet has not only helped us grow the company’s rep-base, but they encouraged us to maintain a significant ownership stake, allowing us to benefit from the growth.”
Eads Investment Holdings
“Even before we officially met, I had heard of CapStreet from several different sources,” says Steve Albert, CEO of Eads. “A neighbor of mine, who had been the CEO of one of CapStreet’s portfolio companies, had always been very complimentary of the firm and the people. In addition, GHX was one of our customers, so I watched first hand as GHX significantly grew under CapStreet’s ownership.” Steve first met CapStreet in 2009 and remained in contact with the team until 2012 when he was looking for a partner. “Over the course of three years, I developed a relationship with several members of the CapStreet team and when Eads was ready to pursue a transaction, CapStreet was my first call.”
Founded in 1953, Eads is a Houston-based industrial provider of engineered equipment, products and services primarily to the refining, petrochemical, oil & gas production, and other general industrial sectors. Eads was initially founded as a manufacturers’ stocking representative, specializing in the sales of engineered flow control and instrumentation products. Today, Eads maintains a diverse product offering in the following categories: instrumentation and controls, filtration, valves and automation, and plant specialty products.
Since its investment, CapStreet has worked with Eads to build out its infrastructure and transform the company into a platform for growth. Eads has strengthened its management team and has implemented a new ERP system which will enhance current and future operations. In addition, Eads is actively pursuing strategic add-on acquisitions. “Prior to CapStreet’s ownership, we didn’t have the resources or the appetite to pursue a true acquisition program. CapStreet has provided Eads with the capital and expertise to grow via strategic acquisitions and has also assisted us with the implementation of several operating improvements which enable Eads to support both internal and acquisition growth.”
CapStreet testimonials are provided by portfolio company management executives to demonstrate the benefits of working with the CapStreet Team. They are not provided to solicit limited partners in a CapStreet Fund. Some management executives featured in the testimonials may also have an interest in a CapStreet Fund; such testimonials are not offered on the basis of being an investor in a CapStreet Fund but rather as executives who work with the CapStreet Team. These portfolio company executives are compensated directly by their employers and not by CapStreet.