Announcement

Periculum Capital Company, LLC has successfully completed the sale of Peerless Electric Supply Co., Inc. to strategic buyer Crescent Electric Supply Company.

Peerless Electric Supply Co., Inc. is based in Indianapolis and was founded in 1928. The Company is the largest independent commercial and residential electrical distributor serving central Indiana. Crescent Electric Supply Co. is the eighth largest commercial and residential electrical distributor in the country. Crescent is headquartered in East Dubuque, Illinois. Recently we have been discussing how aggressive financial buyers, typically in the form of institutional equity groups, are when looking to acquire profitable middle market companies. In many instances they are outbidding strategic buyers.

However, as this transaction shows, there are industries and situations where strategic buyers are still able to pay higher prices than financial buyers when acquiring companies.

Distribution companies are a prime example where strategic buyers can reduce expenses by consolidating operations resulting in the ability to pay high premiums for businesses. In this instance, the purchase price was in excess of ten times EBITDA.

With the aggressiveness of both strategic and financial buyers, we continue to believe this is an unprecedented period for owners to consider selling their companies.

Periculum continues to focus on selling companies and raising capital through equity and subordinated and senior debt to fund business growth and opportunities in the Midwest. Periculum would welcome the opportunity to speak with you about your needs in the future.