The Company is a leading provider of underground storage tank testing services to over 6,000 separate gas stations, convenience stores and municipalities in 39 states.
The two principal owners had founded the Company with one truck and successfully grown it into one of the largest testing operations of its kind in the United States without taking on any additional third party capital. Despite this success, the owners believed significant additional opportunities for expansion existed within the marketplace. The owners asked Trestle to help identify potential partners who could provide the additional expertise and capital required to help accelerate this expansion.
The Company worked mainly with large national C-Store chains and therefore had some customer concentration issues. As a result, Trestle initially undertook a broad marketing process including both strategic and private equity suitors to identify potential partners who could underwrite this risk. The initial marketing process was disrupted when the Company’s largest customer entered a prolonged RFP process for its environmental testing service providers. A subsequent process was stalled by debt and equity market disruptions related to the Covid-19 pandemic. The Company was eventually sold to a private equity-backed strategic acquiror in a cash transaction. The acquisition filled a major strategic need for the buyer, and the owners also received the option to purchase shares in the larger entity to capitalize on future upside.