Case Studies

  • Print This Page Email This Page
Griffin Advises HydroWorx International, Inc., in its Sale to Alliance Holdings

Company Overview

HydroWorx International, Inc. (“HydroWorx”), has over 20 years of experience as a world class leader in the design and manufacture of branded proprietary sports training and therapeutic aquatic pools. Based near Harrisburg, PA, HydroWorx currently sells eight hydrotherapy product lines. These products and related services are sold to customers across a variety of industries, including professional and minor league sports teams; Olympic training sites; colleges and universities; healthcare/medical facilities including hospitals, rehabilitation facilities and physical therapy clinics; military medical and training facilities; senior living facilities; and wellness centers. HydroWorx’s products and services are sold both in the U.S. and internationally.

Situation

HydroWorx’s co-founder, CEO and majority shareholder, Anson Flake, needed to plan for his personal and company management succession, and to provide the company’s long-term original shareholders with liquidity. Given this situation, a sale of HydroWorx appeared to be the best solution.  HydroWorx’s Board, in turn, had three conditions that needed to be satisfied in a sale to a potential buyer: (1) a valuation commensurate with HydroWorx’s strong growth; (2) retain the company’s current management team and employee base, unique culture and reputation upon Anson’s exit from the company at closing; and (3) maintain the company’s current facility in Central Pennsylvania.

Solution

After interviewing several investment banks, HydroWorx engaged Griffin Financial Group to sell the company. After considering the shareholders’ goals and conducting extensive research on the company and its industry, Griffin determined there was no obvious strategic buyer, and achieving all of the Board’s goals could be challenging with a strategic party. Griffin, therefore, managed a competitive sale process with a select group of strategic buyers and a much-larger group of private equity firms and family offices, which produced double-digit purchase offers.

Ultimately, HydroWorx selected Alliance Holdings (“Alliance”), a unique, lower-middle-market private equity firm based in Abington, PA, as the purchaser. Alliance is a 100% employee-owned ESOP. Alliance’s capital is internally generated and evergreen, and Alliance has no outside investors, and therefore can own its portfolio companies for an indefinite period. In addition, all HydroWorx employees became shareholders under the ESOP structure. These attributes were specifically appealing to HydroWorx’s shareholders and satisfied all of the company’s goals.

For more information on this transaction, contact John A. Lee, Senior Managing Director, at (610) 205-6106 or R. Patrick Wood, Senior Vice President, at (717) 255-7383.

ABOUT GRIFFIN FINANCIAL GROUP LLC
Griffin Financial Group provides merger and acquisition advisory, capital formation, structured finance and strategic consulting services to the financial institutions, insurance, commercial and industrial, retail, services, technology and telecommunications and private equity sectors in addition to assisting businesses facing special situations. Griffin is part of the Stevens & Lee/Griffin family of companies. For more information, please contact Joseph M. Harenza, CEO and Senior Managing Director, at 610.478.2160.

Hydroworx_1216