Archives for March 1, 2013

Berkshire Partners Acquires SRS Distribution

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Berkshire Partners has acquired SRS Distribution, a national distributor of roofing supplies and related materials. SRS was a portfolio company of AEA Investors.

SRS Distribution is the fourth largest residential roofing distributor in the U.S. with 85 locations in 29 states under 19 different brands: Suncoast Roofers Supply (FL), Southern Shingles (TX/OK/LA/MO/AR), SRS Roofing Supply (AL), Rowe Supply (GA/SC), Atlanta Roofing Supply (GA), Cannon Supply (SC), Columbia Wholesale (SC), Midwest Roofing Supply (IL/MN), Gary-Hobart Roofing Supply (IN), River City Wholesale (KY), Superior Distribution (TN/MD/VA/NC), Shake & Shingle Supply (CO/KS/MO/NE/IL), Stewart Building & Roofing Supply (AZ), Roofline Supply (OR/CA/UT), Stoneway Roofing Supply (WA), Pace Supply (PA/CT), Burbank Roofing Supply Group (CA), ABCO Supply (MI) and Sierra Roofing Supply (NV). SRS Distribution is headquartered in McKinney, TX (www.srsicorp.com).

Harris Williams & Co. (www.harriswilliams.com) acted as advisor to SRS Distribution. The transaction closed on February 28, 2013 and was led by Mike Hogan, Chris Williams, Ryan Nelson, and Brent Spiller from the firm’s Richmond office.

“SRS is a remarkable building products platform with an exceptional track record of growth and an outstanding management team. It has been a pleasure working with Ron Ross (CEO) and his team to find a new partner who shares the company’s vision for the future. We have a longstanding relationship with the AEA team and are delighted to have represented them on this transaction” said Mr. Hogan, a managing director at Harris Williams & Co.

Berkshire Partners invests from $50 million to $500 million of equity capital in mid-sized companies operating in the consumer products, retail, business services, industrial manufacturing, transportation and communications sectors. The firm is currently investing from Berkshire Fund VIII, a $4.5 billion fund raised in 2011. Berkshire Partners was founded in 1986 and is based in Boston (www.berkshirepartners.com).

AEA manages approximately $6 billion of invested and committed capital in funds dedicated to three purposes: buyouts of middle market companies operating in the industrial, specialty chemical, consumer products and consumer services sectors; buyouts of smaller middle market companies in these same sectors; and mezzanine and senior debt investments. AEA is based in New York with offices in London, Munich, Hong Kong, and Shanghai (www.aeainvestors.com).

“The SRS transaction is a further example of the strong investor interest in building products and materials companies. We expect the ongoing recovery in new construction will continue to drive M&A activity in the sector,” said Ryan Nelson, a director at Harris Williams & Co.

© 2013 PEPD • Private Equity’s Leading News Magazine • 3-1-13

Maranon Capital Invests in Young Innovations

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Maranon Capital has completed a mezzanine debt investment in Young Innovations to support Linden Capital Partners acquisition of the company in a public-to-private transaction valued at approximately $314 million. Maranon was Agent for the lenders who provided a $65 million mezzanine tranche. Maranon also co-invested preferred and common equity in the transaction alongside Linden.

Young Innovations develops, manufactures and markets supplies and equipment used by dentists, dental hygienists, dental assistants and consumers. The company’s consumables product offering includes disposable and metal prophy angles, prophy cups and brushes, dental micro-applicators, moisture control products, infection control products, dental handpieces (drills) and related components, endodontic systems, orthodontic toothbrushes, flavored examination gloves, children’s toothbrushes, and children’s toothpastes. In addition, the company offers a line of diagnostic products that includes panoramic X-ray machines and related supplies. The company is based in East Earth City, MO (www.ydnt.com).

“We were attracted to the Young Innovations investment opportunity by the company’s excellent brand recognition and customer loyalty, its leading market share across a variety of products, and the recurring revenue stream associated with multiple categories of single use items” said Demian Kircher, Managing Director and the lead partner for Maranon Capital on the transaction. “In addition, we are pleased to complete our first investment with Linden, a leading healthcare private equity firm, and an experienced investor in the dental products sector.”

Other Maranon Capital team members involved in the Young Innovations investment included Laura Albrecht, Principal, and Andrew Eshelman, Associate.

Maranon Capital provides senior financing, mezzanine debt and equity co-investments for private equity-backed and non-sponsored middle market transactions. The firm is currently managing over $550 million of committed capital. Maranon has offices in Chicago, IL; Birmingham, MI and South Bend, IN (www.maranoncapital.com).

Linden Capital Partners is focused exclusively on leveraged buyouts in the healthcare and life science industries. Linden’s strategy is based upon three elements: specialization on middle market healthcare and life science companies; integrated private equity and operating expertise; and strategic relationships with large corporations. The firm is based in Chicago (www.lindenllc.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 3-1-13

Trive Capital Acquires Huron

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Trive Capital has acquired Huron, a supplier of tubular assemblies and other machined products for the automotive industry, from SunTx Capital Partners.

“The Huron acquisition represents Trive’s third platform investment since launching the firm just eight months ago. We are thrilled to add such a strong business to our existing portfolio, and we look forward to partnering with the company and its talented employees to capitalize on several tangible near term opportunities,” said Conner Searcy, Managing Partner at Trive.

Huron is a supplier of value-added tubular assemblies and precision components used in automotive engine, transmission, fuel and climate control systems. Customers of Huron include some of the world’s largest car manufacturers, as well as key automotive OEM and Tier I suppliers. Huron was founded in 1943 and is based in Lexington, MI (www.huroninc.com).

Trive Capital invests from $5 million to $40 million in US based middle market companies that have revenues from $30 million to $500 million. Sectors of interest include automotive & transportation; aerospace & defense; building products; construction & infrastructure; consumer goods; energy services; healthcare; manufacturing/industrials; chemicals; distribution; business & professional services; and communications. The firm is based in Dallas (www.trivecapital.com).

“Trive aims to partner with strategically viable businesses on the cusp of a stepwise improvement in performance. We respect the long-standing relationships Huron has with its customers, suppliers, and employees and look forward to leveraging our deep experience within the automotive space to further enhance the business,” said Chris Zugaro, a Partner at Trive.

© 2013 PEPD • Private Equity’s Leading News Magazine • 3-1-13

Seacoast Capital Invests in Northwest Cascade

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Seacoast Capital has made a growth recapitalization investment in Northwest Cascade, a portable sanitation provider.

Northwest Cascade is a diversified industrial services business that owns and operates the leading portable sanitation services company in the Northwest. The company is made up of three complementary business units: Honey Bucket, FloHawks and Northwest Cascade Construction. Northwest Cascade was founded in 1967 and is based in Puyallup, WA (www.nwcascade.com).

Investment bank Greene Holcomb Fisher (GHF) (www.ghf.net ) served as exclusive financial advisor to Northwest Cascade in the transaction and introduced Seacoast Capital to the company. “We are thrilled to have had the opportunity to work with the Northwest Cascade team to help facilitate this growth recapitalization. Northwest Cascade has built an outstanding reputation as a leader in the industry and we are confident that the partnership with Seacoast Capital will prove to be valuable as they pursue continued organic and acquisition growth opportunities,” said Cameron Hewes, a Managing Director at GHF.

“Our entire management team is looking forward to working with Seacoast Capital as we enter a new phase in our company’s evolution. With increased construction activity in late 2012 and early 2013, this recapitalization could not have come at a better time. The team at GHF did an outstanding job helping us to find the right structure and partner to meet our needs,” said Mark Perry, Chairman and CEO of Northwest Cascade.

Seacoast makes non-controlling subordinated debt and equity investments in privately-held lower middle market companies that have at least $10 million in revenue and $2 million of EBITDA. Seacoast typically provides between $3 million and $12 million of debt and equity capital for acquisitions, growth, shareholder buyouts, management buyouts, and leveraged recapitalizations to provide shareholder liquidity. The firm is industry agnostic but has a specific interest in the specialty manufacturing, value-added distribution, and business services sectors. Seacoast was founded in 1994 and has offices in Boston and San Francisco (www.seacoastcapital.com).

“Over the last 30 years, Mark Perry and the entire Northwest Cascade team have built an exceptional franchise in the Pacific Northwest. The company’s strong performance over the past five years relative to its peers has enabled Northwest Cascade to capture significant market share within existing end markets. We’re honored and excited to take part in the next phase of Northwest Cascade’s growth as it expands into new geographies and builds on its reputation as one of the leading portable sanitation providers in the U.S.,” said Tim Fay, a Partner at Seacoast Capital.

© 2013 PEPD • Private Equity’s Leading News Magazine • 3-1-13

Catterton Partners Invests in Fixtures Living

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Fixtures Living, a retailer of lifestyle products for the home, has received an investment from Catterton Partners.

“Fixtures Living has developed a game-changing retail model,” said Scott Dahnke, Managing Partner at Catterton Partners. “By delivering a full-immersion retail experience that facilitates the relationship between consumers, trade professionals, and leading brands, the company has succeeded in creating a retail concept that is positioned to win. This concept is unlike any other that we have seen. We are excited to partner with the talented team at Fixtures Living to help the company realize its immense potential.”

Fixtures Living carries an array of best-in-class products for indoor and outdoor living spaces — kitchens, laundry rooms, and bathrooms. Unlike typical industry showrooms, Fixtures Living’ stores invite consumers to enjoy a 360 degree sensory experience that uses live kitchens and working bath fixtures (from decorative plumbing to entire health and wellness systems), and by recruiting and retaining a welcoming and knowledgeable staff who encourage guests to “Live Joyfully™.” The company currently has three showrooms in Southern California and plans to expand across the U.S. over the next several years, including adding two locations later this year – one in San Diego at the Westfield UTC luxury center and one in the Glendale Galleria. Fixtures Living was founded in 2009 and is based in San Diego (www.fixturesliving.com).

Chief Executive Officer Jeffery Sears and the current management team will continue to lead the company as it expands its presence across the country. Mr. Sears, along with co-founder and Chairman Jim Stuart, will retain a significant stake in the company.

“The Fixtures Living concept has created a new way for the consumer to choose lifestyle goods for the home. Our innovative approach is embraced enthusiastically by homeowners and industry professionals who appreciate the opportunity to test-drive products in an inviting and interactive setting. This fosters a connection between the visitor and the products that helps them create the types of moments they wish to share in their homes,” said Mr. Sears. “We look forward to working with Catterton, a partner with significant experience growing similar best-in-class retailers such as Restoration Hardware. Together, we are well-equipped to capitalize on the vast opportunity we see to fill a void in the current marketplace.”

Catterton Partners focuses exclusively on the consumer industry. The firm invests in all major consumer segments, including Food and Beverage, Retail and Restaurants, Consumer Products and Services, and Media and Marketing Services. Founded in 1989, the firm has more than $3 billion of capital under management and is located in Greenwich, CT (www.cpequity.com).

Valtus Capital Group (www.valtuscapital.com) acted as Valuation Advisor to Fixtures Living in connection with this transaction.

© 2013 PEPD • Private Equity’s Leading News Magazine • 3-1-13

Genstar Capital Acquires Acrisure

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Genstar Capital has acquired Acrisure, the 50th largest privately owned insurance agency in the United States.

Acrisure’s product lines include property & casualty, employee benefits and related third party administrator services, human resource outsourcing, loss & claims management, surety bonding and personal lines coverage. The company was co-founded in 2005 by CEO Greg Williams to acquire independent insurance agencies across the Midwest and since then has completed 26 acquisitions. The company is based in Grand Rapids, MI (www.acrisure.com).

“I am pleased to be partnering with the team at Genstar who bring a proven track record of growing and building a company like ours in the insurance industry. We have a shared vision to continue Acrisure’s growth both organically and through strategic acquisitions and Genstar is the ideal partner who brings additional resources and valuable expertise as we acquire strategic add-on opportunities and accelerate the growth of the Acrisure portfolio,” said Mr. Williams.

J. Ryan Clark, a Managing Director at Genstar, as well as Tony Salewski and David Golde of Genstar will join the Acrisure Board of Directors. In addition, John Addeo, retired CEO of Genstar’s former portfolio company, Confie Seguros, will also join the Acrisure Board.

“Greg Williams is a highly successful and capable leader who has built Acrisure into one of the leading insurance agencies in the Midwest. We were attracted by the company’s historically strong performance, both organically and through acquisitions, its broad set of capabilities, and the high quality of the management team and local agency partners. By working with Greg and his team we believe we have an opportunity to leverage Genstar’s extensive insurance executive network to accelerate growth and expand the company’s footprint nationally,” said Mr. Clark.

Genstar pursued a similar growth strategy with its former portfolio company Confie Seguros, which Genstar helped build into a national insurance distribution company primarily focused on the needs of Hispanic consumers. Genstar partnered with John Addeo and other insurance industry executives in 2008 to establish Confie Seguros and grew the company to over 300 retail locations with annual revenues approaching $200 million by 2012. Significant value was created through an acquisition program (38 add-on acquisitions under Genstar ownership), organic EBITDA growth and cash flow generation. Genstar sold Confie Seguros in November 2012 to ABRY Partners.

Genstar Capital is a private equity firm that invests in middle-market companies and builds value in those businesses by utilizing the expertise of its operating partners. Genstar has more than $4 billion of committed capital under management and targets investments within the life sciences, healthcare services, financial & business services, software & software services and industrial technology industries. The firm was founded in 1988 and is based in San Francisco (www.gencap.com).

“Genstar continues to expand and deepen its commitment to the financial services vertical. We have a reputation for executing innovative transactions across a wide spectrum of the financial services sector by partnering with high-quality management teams in businesses that exhibit attractive growth opportunities,” said Jean-Pierre Conte, Managing Director and Chairman of Genstar. “Combined with our strong relationships with industry experts, which can be invaluable for management teams as they look to expand their businesses and execute on strategic objectives, we make long-term capital investments and provide our expertise to support the strategic and financial objectives of the companies in which we invest.”

AcquiGrowth Capital (www.acquisitiongrowthcapital.com) advised Genstar and Dowling Hales (www.dowlinghales.com) advised Acrisure on the transaction.

© 2013 PEPD • Private Equity’s Leading News Magazine • 3-1-13