The Bright Future of Central Storage & Warehouse: Long-Term Relationships, Long-Term Growth
When we met Sam and Hill in 2019, the pair had known one another for more than a decade. After playing football together in college, Sam and Hill embarked on different career paths. Sam began his career in investment banking, then worked as a hedge fund analyst before pursuing a JD / MBA at Stanford. Hill taught high school history, then joined the US Marine Corps to serve in Afghanistan before pursuing his MBA at Harvard Business School. Despite their divergent paths, Sam and Hill remained close friends. Sam and Hill’s shared ability to develop and foster long-term relationships was among the first things that we noticed about the entrepreneurs when we first met them, and made us excited about backing them on their entrepreneurial journey.
One of Sam and Hill’s search theses centered on specialty supply-chain solutions due to the sector’s strong macroeconomic and consumer-behavior tailwinds. This led them to CSW, a family-owned cold storage business headquartered in Madison, Wisconsin. CSW’s owner had resisted selling the company previously, despite repeated overtures from would-be buyers. As Sam and Hill got to know the seller, they came to appreciate how important legacy was to him and his family. In Sam and Hill, the seller found what he was looking for: long-term stewardship of CSW.
Sam and Hill closed their acquisition of CSW in December 2021. The co-CEOs quickly immersed themselves in the business, unloading trucks on the weekends and learning to operate a forklift on the warehouse floor. As Sam and Hill’s understanding of CSW grew, so did their understanding of their customers’ needs. CSW’s customers, mainly food manufacturers and distributors, required additional storage space before they could ramp up production capacity. CSW needed to grow with its customers to accommodate the customers’ burgeoning storage requirements – and it needed to grow quickly.
Faced with the need for rapid and proactive facility expansion to accommodate customer demand, the co-CEOs sought out capital partners they knew and could trust. Pacific Lake Long-Term Hold proved to be a great fit for Sam and Hill on many dimensions: they wanted a partner who both understood their long-term vision for CSW and could support that vision with talent and growth strategy resources, like those offered by the Pacific Lake Value Creation Team. At the same time, our team was excited to grow our partnership with two exceptionally talented entrepreneurs operating a business with tremendous long-term potential. Durable industry tailwinds, such as the increase in demand for frozen foods and the creation of biopharmaceutical products that require refrigeration, have positioned CSW for continued growth. Combined with these industry tailwinds, CSW’s proven right to win in key customer segments points to a bright future for the company – one that we are eager to help shape.
CSW’s most recent investment round, led by Pacific Lake Long-Term Hold, closed in April 2024. This investment marks the next chapter in an already impressive story, and we could not be more excited to deepen our relationship with Sam and Hill as the pair continues to scale CSW. We are grateful for the opportunity to partner with the co-CEOs during the next phase of CSW’s growth and look forward to supporting Sam and Hill as they execute on our shared vision of building CSW into an industry-leading cold storage and logistics provider over the next decade and beyond. We’re in it for the long run.
You can read more about our Long-Term Hold strategy here or reach out to Keith Gross or Ben Broughton for more information.
