Business Description

Granby Steel Tanks is North America's leading manufacturer of high quality steel tanks for fuel oil storage used in connection with residential and light commercial oil-fired furnaces and boilers. Since 1954, the Company has built a reputation as the premier manufacturer of residential steel tanks by continually improving product quality to levels that have become the benchmark for the industry. In December 2002, TorQuest Partners purchased the Company from Carrier Corporation, a division of United Technologies.

Investment Thesis

Granby's management built its dominant market share by attracting and growing with the industry's largest distributors. There was an opportunity for Granby Steel Tanks to introduce new products into this distribution network. TorQuest's view was that Granby's distribution network was a tremendous asset. TorQuest's plan was to position Granby as an HVAC competitor and to assist Granby in acquiring companies which manufacture complementary products that Granby could introduce into its existing distribution network.

Strategic Initiatives

TorQuest led the corporate development and strategic planning roles at Granby. Under TorQuest ownership and through exceptional leadership in the Company, Granby increased revenue, increased quality and workplace safety and dramatically increased profitability through operational improvements. In February 2004, Granby closed the acquisition of Kamco Products, North America's largest manufacturer of coated copper tubing products for use in HVAC applications. The acquisition gave Granby the critical size to access the capital markets as an income trust. Furthermore, the growth potential of the coated copper tubing industry added a growth element to the Granby story.

Investment Results

On December 16th, 2004, TorQuest Value Fund L.P., through its investment in Granby Steel Tanks Limited Partnership (GSTLP), closed the initial public offering of Granby Industries Income Fund at an 11.25% yield.  TorQuest retained 20% of the interest in Granby Industries Income Fund by holding Class B subordinated units.

http://www.granbyindustries.com

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