Los Angeles—Transom Capital Group, an operations-focused middle market private equity firm, has acquired Virginia Tile Company, LLC. Virginia Tile is a Midwest-based specialty distributor of design-centric tile, decorative surfaces and installation accessory products headquartered in metro Detroit. Virginia Tile will be joining forces with Galleher—a top three flooring distributor that was acquired by Transom late last year—to create a leading flooring and tile products distributor of national scale with unique product development, merchandising and fulfillment capabilities.
Galleher is the largest floor covering distributor in the western U.S. and the third largest flooring distributor in the U.S.—offering hardwood flooring, luxury vinyl plank and installation accessories. Virginia Tile is the leading tile distributor in its core Midwest markets, with 19 showrooms across 12 states, offering a vast assortment of tile and decorative surfaces products. The companies sell to the professional consumer—including flooring contractors, dealers and showrooms, commercial installers, builders, designers, architects and other customers.
Together, the two companies will have greater geographic reach and will provide customers with complementary products and additional resources to solve complex problems. According to the companies, this combination will benefit their suppliers, customers and employees—all while maintaining attention to detail, ingenuity and values their reputations have each been built on.
The combined company will be led by Sunil Palakodati as CEO, who will also remain president of Virginia Tile; Rick Coates as president of Galleher; and David Burke as CFO. Palakodati brings 22 years of building products industry experience, including four years as CEO of Architectural Surfaces Group. Burke was most recently CFO of Skybridge Technologies and has more than 20 years of experience in finance and accounting, including 10 as a CFO. Coates has 47 years of industry experience.
“I am privileged to facilitate the joining of two great companies that share a passion for providing customers with technical solutions, partnering with industry leading manufacturers and building collaborative teams offering high touch local sales support,” Palakodati said. “With Transom’s support and investment, we can accelerate our capabilities.”
The combined business will operate as an independent entity within Transom’s portfolio of companies. The acquisition will provide additional leadership and expertise, financial backing to accelerate product innovation, new market expansion and stronger customer relationships.
“We are confident that the merging of these two companies will provide our customers access to greater resources while offering the same attention to detail and ingenuity in providing unique solutions to challenging customer problems,” Coates added. “We also believe that the merger of the two companies will provide our employees access to greater resources and opportunities to serve customers even more effectively, while also creating new and exciting opportunities for personal development and advancement.”
PNC Bank and Blue Torch Capital provided debt financing for the transaction. Houlihan Lokey served as the exclusive financial advisor to Virginia Tile.