News Jul 07, 2021

Arcapita Exits from Stratus

Arcapita Group Holdings, the global alternative investment firm, has completed the sale of Stratus, a global leader in brand implementation, serving some of the largest, most recognized brands in the United States, to Vestar Capital Partners, a leading U.S. middle market private equity firm.

Under Arcapita’s ownership, Stratus transitioned from a nationwide signage company to a tech-enabled, asset light diversified facility services and brand management company with over $300 million in revenue in 2021. Since being acquired by Arcapita in late 2017, Stratus achieved organic growth through its blue-chip customer base, which includes companies such as Starbucks and McDonalds. It also completed several add-on acquisitions which expanded the Company’s customer base and product offering. Despite the unprecedented economic downturn resulting from the COVID-19 pandemic, the Company tripled its revenues and EBITDA over the holding period.

Atif A. Abdulmalik, Arcapita’s Chief Executive Officer, commented: “Stratus is a clear private equity success story for Arcapita. We identified a good company, helped set its strategy and transformed the company to accelerate its growth, and achieved a strong realization for investors, all in three and a half years.”

He added: “Our US private equity portfolio has performed well during the pandemic and, we have a strong pipeline of promising investments that will substantially increase our assets under management in the United States.”

Arcapita’s management team has completed over $15 billion in US private equity investments over the past 24 years. The firm’s US private equity investment strategy has predominantly focused on acquiring asset-light business services and logistics companies which benefit from the trend for large organizations to outsource their non-core activities, such as facilities management, to reduce costs and achieve operational efficiencies.

Stratus’s CEO and Founder Tim Eippert said: “Arcapita has been a true partner to Stratus and has been instrumental in growing the Company into the robust and successful business it is today.” He added: “We look forward to leveraging Vestar’s strategic relationships, capital, and operational expertise alongside, working together to continue building our capabilities for the benefit of our customers.”

Nikhil Bhat, Vestar Managing Director and Co-Head of Business & Technology Services said: “Stratus’s significant investments in systems and operational infrastructure, deep understanding of its customers’ needs and relentless focus on service excellence have enabled its growth into a scaled nationwide platform,” adding that the Company has an attractive opportunity to expand into complementary service lines and reinforce its current offerings through acquisitions and continued investment in the platform. “We are excited to partner with Tim and his exceptional management team to help accelerate the next stage of Stratus’s growth.”

William Blair and Citizens M&A Advisory acted as financial advisors and King & Spalding served as legal counsel to Stratus. Robert W. Baird & Co. acted as financial advisor and Kirkland & Ellis LLP served as legal counsel to Vestar.