Brentwood Associates Closes $410 Million Fund for Watermill Express
Brentwood Associates, a distinguished private equity firm specializing in middle-market investments, has successfully closed an oversubscribed continuation fund of $410 million aimed at bolstering the growth of Watermill Express, LLC. Watermill is renowned for providing affordable and safe drinking water and ice through its network of convenient drive-up, self-service stations. This strategic financial move not only extends Brentwood's partnership with Watermill but also introduces fresh capital to propel the Company's next growth phase.
Investment Highlights
The newly established continuation fund is primarily backed by significant investments from Hollyport Capital, which serves as the lead investor, along with Pantheon and Portfolio Advisors acting as co-leads. Brentwood has demonstrated confidence in Watermill's future growth potential and is actively participating in the Company through its Fund VII. Furthermore, the firm's general partnership is reinvesting proceeds gained from this transaction.
Watermill's Commitment to Sustainability
Founded in 1984, Watermill operates around 1,300 self-service water and ice stations primarily located in the West Coast and Sunbelt regions of the United States. Over its four-decade journey, the Company has provided safe drinking water and ice to more than 10 million people and has played a crucial role in preventing over 15 billion single-use plastic water bottles from contributing to landfill waste. Under Brentwood's investment, Watermill has made remarkable strides, tripling its adjusted EBITDA by opening new stations and transforming existing water-only units into a comprehensive water-and-ice service model, in addition to acquiring its remaining franchise outlets.
Future Growth Plans
Looking into the future, Watermill Express has an optimistic growth trajectory ahead. The Company is well-positioned to expand through organic growth, leveraging opportunities to launch new stations, upgrade current locations, and engage in strategic acquisitions that will broaden its service offerings and extend its reach within the drinking water and ice market.
Leadership Remarks
Eric Reiter, Partner at Brentwood and Chairman of the Board of Watermill, expressed, "This transaction underscores our profound confidence in Watermill's ongoing growth and its dedication to providing affordable and accessible clean water to communities nationwide. We’re thrilled to support a business that not only excels financially but also makes a substantial social impact. Our partnership with Watermill and its exceptional executive team continues to be rewarding for our investors."
Watermill's Vision and Collaboration
Mike Gallagher, the CEO of Watermill, shared insights about the Company's mission post-transaction. "With this fund's close, Watermill is strongly positioned to execute our mission of addressing the critical clean water needs in America. Our innovative self-service kiosks have made it easier for communities to access high-quality, affordable water and ice. We eagerly anticipate partnerships with grocery stores, convenience retailers, and shopping centers to expand our essential services while enhancing their neighborhood value."
Advisory Team
The process leading to this continuation fund included valuable input from multiple advisory firms. PJT Partners operated as the lead financial advisor, while North Point Mergers and Acquisitions contributed as a financial advisor, with Kirkland & Ellis LLP serving as legal counsel for Brentwood. Additionally, Proskauer Rose LLP acted as legal counsel to Hollyport Capital.
About Watermill Express
Watermill Express, established in 1984, stands as a national frontrunner in providing refill stations that deliver safe, affordable, and sustainable drinking water and ice. Operating nearly 1,300 stations across eight states, the Company prioritizes convenience in its services. To learn more about Watermill Express, please explore their official website.
About Brentwood Associates
Brentwood Associates, with roots in Los Angeles, is a private equity investment firm with over 30 years of experience in the essential services sector. Since 1984, Brentwood has made substantial investments in more than 50 portfolio companies, demonstrating a collective transaction value exceeding $7 billion. The firm remains committed to empowering entrepreneurs and management teams in their pursuit of building top-tier companies.
About Hollyport Capital
Hollyport Capital, founded in 2006, is a specialized secondary investor that focuses on maximizing value in legacy private equity assets. The firm prides itself on providing tailored liquidity solutions, having raised eight secondary funds and managing over $9 billion in assets. With a dedicated team spread across offices in New York and London, Hollyport continues to thrive in capturing hidden value in complex scenarios.
Frequently Asked Questions
What is the purpose of the $410 million continuation fund?
The fund aims to provide additional capital to support the growth and expansion of Watermill Express, ensuring it continues to deliver affordable and safe drinking water.
Who are the major investors in the continuation fund?
The fund is led by Hollyport Capital, with Pantheon and Portfolio Advisors as co-lead investors.
How many stations does Watermill Express operate?
Watermill Express operates nearly 1,300 self-service stations across eight states, focusing primarily on the West Coast and Sunbelt regions.
What is Watermill's impact on single-use plastics?
Watermill has helped prevent over 15 billion single-use plastic water bottles from entering landfills through its refill stations.
What growth opportunities does Watermill have in the future?
Watermill has numerous opportunities for organic growth, including opening new stations, upgrading existing locations, and pursuing strategic acquisitions.
