PNC Mezzanine Capital - Polycor Case Study

Case Study: Polycor

Polycor Case Study

Can I Find a Long Term Capital Partner to Help Execute a Management Buyout?

Polycor, Inc. (“Polycor” or the “Company”), Quebec City, Quebec, is one of the largest producers of high quality dimensional stone products in the world. Polycor was founded in 1987, and prior to taking on additional investment, operated approximately 25 quarries and five fabrication plants to produce stone slabs, tiles, marble headstones, granite curbs, and other architectural stone products. The Company participates in several major markets including residential renovation, urban landscaping, memorials, and commercial & institutional construction. At the time of PNC Mezzanine Capital’s initial investment, the Company’s management team was seeking a partner that would enable them to buyout Polycor’s majority owner and take a controlling interest in the Company.

The Plan

The Polycor management team, led by CEO Patrick Perus, had been the driving force in the Company’s growth and strong financial performance. Given Patrick and his team’s belief in Polycor’s future business prospects and their desire to acquire a controlling ownership stake in Company, the team sought a capital partner to help them execute a management buyout. As a result of management’s desire for a minority capital partner and the Company’s Canadian headquarters, many United States based financial investors were not a fit to support the team. PNC Mezzanine Capital was then introduced and proceeded to learn more about the Company’s plans and management team’s objectives.

The Strategy

Given PNC Mezzanine Capital’s partnership oriented approach, flexibility in structuring a competitive subordinated debt and minority equity investment, and its experience investing in niche manufacturing businesses, the Polycor team selected PNC Mezzanine Capital to help complete the transaction. Alongside management and the Company’s existing senior lenders, PNC Mezzanine Capital invested C$24MM in a custom mix of subordinated debt and preferred stock to refinance existing debt, buy out the prior ownership group, and to prepare the Company to execute on several strategic initiatives.

The Result

Since PNC Mezzanine Capital and the management team acquired the Company, Polycor has successfully completed numerous growth initiatives to further its leadership position in the dimensional stone market. PNC Mezzanine Capital has remained nimble throughout the investment period and has been an active Board of Directors participant to help fund additional company growth and to enable the Company to partner with additional financial investors. During PNC Mezzanine Capital’s investment period, the Company has completed a multitude of acquisitions including Swensen Granite Company LLC, and Indiana Limestone Company. As a result, Polycor is now the clear North American leader in the dimensional stone market.


"In 2014, we chose PNC Mezzanine to help fund our buyout of Polycor because they understood our unique strategy, supported our growth plan, and could tailor their investment to fit our needs. We made the right choice. PNC Mezzanine has been a valued partner and has helped navigate the complex and rapid growth of Polycor”

-Patrick Perus
CEO of Polycor