BETHESDA, Md. & EVANSTON, Ill. – Rotunda Capital Partners, a private equity firm focused on building growth-oriented, middle-market companies, has announced a strategic investment in Value Added Distributors, LLC (VAD). This partnership with VAD, a leading distributor in the fluid power industry, underscores Rotunda Capital Partners’ commitment to expanding its portfolio within the value-added distribution sector. The investment, made in collaboration with VAD’s existing owners and management team, signals a new chapter of growth and expansion for the Wisconsin-based distributor.
Value Added Distributors, established in 1995 and headquartered in Shawano, WI, has become a key player in the distribution of hoses, tubes, seals, couplings, and related products. Serving specialty vehicle Original Equipment Manufacturers (OEMs) and other mobile fluid power users, VAD distinguishes itself through its comprehensive service offerings. Operating across 17 facilities strategically located throughout the Midwest and Southern US, VAD provides critical value-added services including custom fabrication, assembly, kitting, and vendor managed inventory (VMI) solutions. This investment by Rotunda Capital Partners is poised to further enhance VAD’s market position and service capabilities.
Rotunda Capital Partners Logo: A private equity firm focused on value-added distribution, asset-light logistics, and industrial, business & residential services.
Rohit Dhake, Principal at Rotunda Capital Partners, highlighted the strategic rationale behind the investment, stating, “Rotunda was searching for the right platform in the fluid power industry for several years.” He emphasized the industry’s appeal due to “the highly technical nature of the products, diversified and growing end markets, and the highly fragmented nature of the industry.” Dhake further elaborated that Value Added Distributors perfectly aligned with Rotunda’s investment criteria, citing VAD’s “leading position in the fluid power space, a diversified customer base, a long history of organic growth, heavy integration into their customers’ daily operations, and a top tier management team.”
Echoing this sentiment, Dan Lipson, Managing Partner at Rotunda Capital Partners, remarked on VAD’s robust foundation and the synergistic potential of the partnership. “VAD has built a strong base from which to build upon, and we believe a partnership together can help accelerate their growth,” Lipson stated. He outlined shared objectives focused on “capturing the multiple growth avenues that lie ahead for the Company, including opening additional branch locations to better serve our customers with high touch local service and product expansion through acquisitions.” These acquisitions will strategically target distributors in complementary product categories utilized by VAD’s existing clientele, such as filtration, gaskets, AC assemblies, wire harnesses, kitted fasteners, and motion control systems.
John Fruehwirth, also a Managing Partner at Rotunda Capital Partners, underscored Rotunda’s expertise in investing in family and founder-owned businesses. “This transaction further exemplifies Rotunda’s deep experience investing in founder and family-owned businesses and highlights our continued interest in attractive investments in the industrial distribution sectors,” Fruehwirth commented. He emphasized Rotunda’s ability to “drive rapid growth and expansion” within these sectors.
Mike Kostelnik, founder and CEO of VAD, expressed enthusiasm for the partnership with Rotunda Capital Partners. “We are excited about our partnership with Rotunda and the growth we can achieve together,” Kostelnik stated. He acknowledged VAD’s strong history of organic growth and expressed confidence that “the resources from Rotunda will help us hasten that growth and better service our customers.” Kostelnik envisions expanding into new geographical markets, enhancing service capabilities, and further penetrating existing customer accounts. He added, “It was clear from our first meeting that Rotunda would be a great partner that understands our business, our culture, and our commitment to the highest quality customer service.” Kostelnik and his senior management team will continue to lead Value Added Distributors, ensuring continuity and leveraging their deep industry expertise.
The Rotunda Capital Partners team involved in this investment included Dan Lipson, John Fruehwirth, Rohit Dhake, Cara Hauan, and Alex Lavery. U.S. Bank acted as financial advisor to Value Added Distributors, while Mayer Brown LLP served as legal counsel to Rotunda Capital Partners. Financing for the transaction was provided by TPG Twin Brook Capital Partners.
About Value Added Distributors, LLC
Value Added Distributors, LLC is a premier distributor specializing in hydraulic hose assemblies, kitting solutions, and vendor managed inventory services. The company is dedicated to providing applied technology and value-added solutions to a diverse range of industries. For more information, please visit: https://vadtek.com/
About Rotunda Capital Partners
Rotunda Capital Partners is an operationally-focused private equity firm that actively partners with management teams to transform family-founder owned companies into data-driven platforms poised for significant growth. Since its inception in 2009, Rotunda Capital Partners has focused on building successful businesses within value-added distribution, asset-light logistics, and industrial, business & residential services sectors. Rotunda Capital Partners employs its Rotunda Performance System (RPS) to foster strategic alignment, implement lean processes, and develop robust, data-driven infrastructures, driving replicable results. For more information about Rotunda Capital Partners, please visit: www.rotundacapital.com
Contacts
Margaux Valle
Rotunda Capital Partners
240.962.1707
[email protected]
