Facing debts of over $73 million, Northern Wholesale Supply is being acquired by a subsidiary of private equity firm Sun Capital Partners Inc. The transaction is expected to close in the coming weeks.
A Minnesota state court order approving the sale was filed Nov. 26 and signed by District Court Judge Sean Gibbs. To review the court document approving the company sale, click here.
The purchase will enable the regional aftermarket distributor to continue operations despite its overwhelming secured and unsecured debts.
A Minnesota state court filing by Lighthouse Management Group, acting as the assignee for Northern Wholesale Supply’s assets in the Sun Capital sale, said the distributor has about 170 unsecured creditors. The unsecured debtors, many of which are aftermarket parts/accessories suppliers, are collectively owed over $13 million. To review the court document listing the company’s creditors, click here.
JPMorgan Chase Bank N.A. held over $60 million in secured debts from the Minnesota-based distributor. As a condition of the sale to Sun Capital Partners, JPMorgan agreed to release over $25 million of its secured debts owed that will not be repaid.
The unsecured creditors, including suppliers who sold parts and accessories to Northern Wholesale Supply, rank behind JPMorgan with respect to their rights to payment from the acquisition’s proceeds. As such, unsecured debts will not be repaid from the acquisition’s proceeds.
When Lighthouse Management Group took control of Northern Wholesale Supply’s bank accounts Nov. 15, the aftermarket distributor had an estimated $10 million of cash on hand.
Seeking Solutions
Since May, Fort Dearborn Partners, Northern Wholesale’s previous owner, solicited potential buyers. Over 40 prospects expressed interest, with four submitting formal indications of interest letters. Fort Dearborn Partners and JPMorgan determined the Sun Capital offer was the “highest and best offer.”
In its court filing, Lighthouse Management Group said, “There simply is no better alternative.”
The court document indicated the only alternative to the Sun Capital acquisition was for Lighthouse Management Group to cease Northern Wholesale’s operations and liquidate its assets through a going-out-of-business sale. The document said such action would result in the loss of millions of dollars of value and more than 200 jobs. To review the court document detailing Lighthouse Management Group’s motion to approve the sale, click here.
As a condition of the acquisition, the court approved a 1.5% “success fee” for Northern Wholesale’s previous owners (Fort Dearborn Partners) from the aggregate gross consideration realized from the sale. In addition, the court approved a 1.5% success fee for Northern Wholesale Supply CEO Chad Smith and Chief Financial Officer Ryan St. Arnold and retention bonuses totaling $101,250 and $62,929, respectively. The court filing indicated the company’s board of directors and JPMorgan Chase Bank approved the success fees and retention bonuses.
In a press release, Northern Wholesale said Sun Capital brings the experience and capabilities needed to support the business.
Smith said, “This acquisition represents an exciting opportunity to build on the strong legacy of NWS and unlock the full potential of the business. With Sun Capital’s support and expertise, we are well-positioned to enhance our operations, expand our reach, and deliver even greater value to our employees, customers, suppliers, and partners.”
The release indicated the new Sun Capital affiliate would prioritize strong relationships with employees, suppliers and customers.
“The buyer is committed to supporting the NWS workforce with resources and growth opportunities,” the release said, “rebuilding and strengthening supplier partnerships to ensure continuity, and enhancing customer experiences through innovation and expanded capabilities.”
Matthew Garff, senior managing director and partner at Sun Capital, said his company believes Northern Wholesale has great potential.
“We are excited to partner with its dedicated leadership team to drive meaningful operational improvements,” Garff said. “Our investment underscores our confidence in the strength of NWS’s business and its ability to thrive with the right resources and strategic direction.”
Aftermarket Supplier’s Reactions
Numerous suppliers indicated that they will no longer sell products to Northern Wholesale in 2025 and stopped shipping parts and accessories to the distributor in 2024 because their past invoices went unpaid. They indicated they will not participate in Northern Wholesale’s upcoming trade show, which is scheduled to take place Wednesday and Thursday at the Mystic Lake Casino and Hotel in Prior Lake, Minnesota.
Other suppliers indicated they will be exhibiting at the show and will fill Northern Wholesales’ orders on a cash basis. Although many were displeased with their past invoices going unpaid and the news those debts will no longer be owed because of the court proceedings, the suppliers said they were encouraged by Northern Wholesale telling them they could add a small upcharge on future orders to recoup costs.
They indicated the distributor’s gesture was an obvious effort to rebuild the relationship, reestablish trust with its parts and accessories supplier base and position the company to be successful in the future.
Numerous retailers and RV dealers indicated they intend to attend the aftermarket show. They cited the longstanding relationships with Northern Wholesale distribution’s employees, who have served them for decades, as motivation for continuing to purchase from Northern Wholesale.
Other disgruntled suppliers cited how the estimated upcharge on future Northern Wholesale orders, which could be 2% or 3% of the invoice total, would take over a decade of parts and accessories sales to recoup the unpaid money. Based on this, they indicated they would no longer do business with Northern Wholesale.
Other retailers questioned future order fill rates and said they would buy from other distributors, who could reliably deliver a greater depth of needed parts and accessories.
(Editor’s note: Show attendee pre-registration numbers were not available at time of publishing.)
The list of creditors includes:
3M COMPANY
ABSOLUTE OUTDOOR, INC
AIRXCEL
ANDERSEN MANUFACTURING INC.
AP PRODUCTS
APPLETON GROUP
ARCO MARINE
ATTWOOD CORPORATION
ATTWOOD/GARELICK
ATWOOD MOBILE (FINISHED GOODS)
ATWOOD MOBILE PRODUCTS
B&W TRAILER HITCHES
BAL RV PRODUCTS GROUP
BARGMAN / TEKONSHA
BARKER MFG CO
BLACKSTONE PRODUCTS
BLUE OX
BOB’S MACHINE
BOSS AUDIO SYSTEMS
BREW CITY
BROWNELL BOAT STANDS
CAL-JUNE
CAMCO (EAZ LIFT)
CAMCO MFG
CAREFREE OF COLORADO
CDI ELECTRONICS
CISCO FISHING SYSTEMS
CLAM CORP
CLASSIC ACCESSORIES INC
CMC MARINE LLC
CMP GROUP LTD
COFAIR PRODUCTS, INC.
CONVERT-A-BALL HITCH SYSTEM
COPELAND COMFORT CONTROLS LP
CREATIVE PRODUCTS GROUP
CUMMINS SALES AND SERVICE
CUSHMAN & WAKEFIELD
DETHMERS MANUFACTURING COMPANY
DETMAR CORP
DEXTER AXLE COMPANY
DICOR CORPORATION
DIVERSITECH CORPORATION
DOMETIC AIR CONDITIONERS
DOMETIC AWNINGS
DOMETIC PARTS
DOMETIC REFRIGERATORS
DOMETIC SANITATION
DR SHRINK INC.
DURA FAUCET
DUTTON-LAINSON CO
ETERNABOND
FAN-TASTIC VENT
FEDERAL-MOGUL
FLOW-RITE CONTROLS
FOURMATION SALES
FPWP LLC
FULTON PERFORMANCE PRODUCTS
GARMIN INTERNATIONAL, INC.
GOLD EAGLE CO
GREENFIELD PRODUCTS, INC.
GROTE INDUSTRIES, LLC
HAIER RECREATIONAL SOLUTIONS
HENG’S
HIGHLINE WARREN LLC
HUGHES AUTOFORMERS
ICON TECHNOLOGIES LTD
IMTRA CORPORATION
INNOVATIVE LIGHTING INC
IOTA ENGINEERING
IPI INDUSTRIES
J L SONTAG
JACK-E-UP INC
JOHNSON OUTDOORS INC.
JOHNSON PUMPS OF AMERICA
JPMORGAN CHASE
JR PRODUCTS
KASCO MARINE INC
LENCO MARINE INC
LIFE INDUSTRIES CORPORATION
LIPPERT COMPONENTS
M & L MARINE
M C ENTERPRISES
MACRAY COMPANY
MARINCO
MARINCO / PARK POWER
MCGARD
MEDART INC
MEGUIARS INC
MICHIGAN WHEEL
MILENCO AMERICA LLC
MONDALE & ASSOCIATES
MONSTER TOWER
MOR/RYDE INTERNATIONAL INC.
MTI INDUSTRIES
NATIONAL PRODUCT INC
NEWCORP INTERNATIONAL
NORCOLD
NORTEK GLOBAL HVAC
NOVAGARD SOLUTIONS
OPTRONICS
OUTDOORS INSIGHT INC
P&S SALES INC
PERKO
POWRTRAN INC
PRODUCT DEVELOPMENT GROUP
PROGRESSIVE DYNAMICS INC
PROPACK PACKAGING (BEST PROD)
PROSPEC ELECTRONICS
PULLIAM ENTERPRISES, INC.
REDTREE INDUSTRIES
REESE
REMCO INDUSTRIES
REP RITE BURK
RIECO-TITAN PRODUCTS INC
RIG RITE MANUFACTURING
RITCHIE NAVIGATION
RIVERSIDE MFG., LLC
ROADMASTER
ROCK TAMERS, LLC
RUSTIQUE ENTERPRISES, INC.
RV PIGTAILS, INC.
RV PRODUCTS
RV SAFE LLC
SAMLEX AMERICA
SCANSTRUT
SCOTT AERATOR CO LLC
SEA DOG
SHAKESPEARE
SHURFLO
SIERRA INTERNATIONAL
SMART SOLUTIONS, INC.
SMARTPLUG SYSTEMS, LLC
SOLIDIFY MANUFACTURING
SOUTHWIRE COMPANY, LLC
SPRINGFIELD MARINE CO
SR SPECIALTY RECREATION
STAR BRITE
STEVENS INSTRUMENT COMPANY
STROMBERG CARLSON PRODUCT
SUBURBAN MFG CO
SUNBELT MARKETING, INC.
TACO METALS
TAYLOR MADE
TAYLOR MADE POWER BIMINI
TEKNOR APEX COMPANY
TEMPRESS PRODUCTS INC
T-H MARINE SUPPLIES INC
THETFORD CORP
TIE DOWN ENGINEERING, INC.
TRAC ECOLOGICAL
TRAC OUTDOORS
TRAXSTECH
TURNING POINT PROPELLERS INC
UFLEX USA INC
V.P. PRODUCTS & SALES, INC.
VALTERRA POWER US, LLC
VALTERRA PRODUCTS, LLC
VICO PLASTICS
VIKING PLASTIC PACKAGING, INC.
WALEX PRODUCTS COMPANY, INC.
WESTLAND SALES
WFCO TECHNOLOGIES
WHITECAP INDUSTRIES
WINEGARD COMPANY
WYERS PRODUCT GROUP, INC
XANTREX LLC
XYLEM FLOW CONTROL
YAMAHA MOTOR CORP, USA
