Archives for August 5, 2013

Audax and CapStreet Acquire GlassCell Isofab

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Crossroads C&I has acquired GlassCell Isofab, a distributor of insulation products. Crossroads C&I is a subsidiary of Distribution International, which is a portfolio company of Audax Private Equity and The CapStreet Group.

GlassCell Isofab is a distributor and fabricator of thermal and acoustical insulation products. The company has nine locations in central and eastern Canada and is headquartered in Toronto (www.crossroadsci.com).

Distribution International is a distributor of insulation, related specialty fabricated products, and safety supplies to the industrial, commercial, and marine end markets. With the completion of this acquisition, the company serves industrial, commercial and marine customers from distribution centers in Texas, Louisiana, Mississippi, Alabama, Arkansas, Tennessee, Kentucky, Missouri, Michigan, South Carolina, North Carolina, Virginia, Maryland, New York, and New Jersey in the United States, as well as British Columbia, Alberta, Ontario, Quebec, and Nova Scotia in Canada. Distribution International is headquartered in Houston (www.distributionintl.com).

“GlassCell Isofab is a great addition to Crossroads C&I and Distribution International. I look forward to working with the GlassCell Isofab team, as our management cultures share a common focus on providing the very best in customer service,” said Celeste Mastin, Chief Executive Officer of Distribution International.

The Audax Group makes control investments of $10 million to $100 million in middle market companies with transaction values of $25 million to $500 million. Sectors of interest include industrial manufacturing; energy; outsourced industrial services; consumer products; healthcare devices and services; non-asset based logistics; technology; aerospace & defense; business services; and direct marketing. The firm was founded in 1999 and has offices in Boston and New York (www.audaxgroup.com).

CapStreet invests in companies with EBITDAs between $5 million and $15 million that are located in Texas and other Sunbelt states. Since founding in 1990, CapStreet has raised approximately $700 million of private equity, completed 35 portfolio company investments and completed more than 250 add-on acquisitions. The firm is based in Houston (www.capstreet.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 8-5-13

Atlantic Street Acquires Rig Runners

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EZE Trucking, a provider of specialty trucking and logistics services and a portfolio company of Atlantic Street Capital, has acquired Rig Runners, a heavy haul trucking company. The combination of EZE and Rig Runners creates one of the largest national specialty hauling and logistics businesses with 16 terminals, over 700 trailers and 400 power units and drivers.

Rig Runners provides specialized heavy and line haul freight and logistics operations to national energy and industrial customers, primarily in the Texas market. Rig Runners was founded in 1982 and is based in Houston (no website found).

“We are pleased to combine an industry leader in Rig Runners with EZE. The newly-combined company is much stronger as the customer base spans multiple industry verticals serving the oil and gas, infrastructure, power generation and industrials end-markets and is diversified across multiple geographic markets,” said Tim Lewis, Partner at Atlantic Street Capital.

EZE Trucking provides specialty heavy and over-dimensional freight logistics services to customers in the infrastructure and energy markets. EZE focuses on heavy and over dimensional loads that can exceed legal tonnage, width, height and length and require specialized route planning, permitting and escorts. Examples of EZE freight include bridge girders, oil rigs and turbines. EZE Trucking is based in Rialto, CA (www.ezetrucking.com).

EZE Trucking was acquired in 2009 by Atlantic Street Capital and in 2011 EZE acquired Patterson Motor Freight, a specialized trucking company focused on the oil and gas industry.

Atlantic Street Capital invests from $5 million to $20 million in middle market companies with revenues from $25 million to $150 million. Sectors of interest include consumer products and services, transportation and logistics, business services, and basic manufacturing. The firm is currently investing from Atlantic Street Capital Partners, LP II and is based in Stamford, CT (www.atlanticstreetcapital.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 8-5-13

ABRY Acquires Economy Insurance Agency

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Confie Seguros, a provider of personal lines insurance, and a portfolio company of ABRY Partners, has acquired Economy Insurance Agency.

Economy Insurance Agency is a provider of auto, home and small commercial insurance. The agency was founded in 1993 and is based in of Spring Hill, FL (www.economyinsurancemart.com).

The purchase of Economy Insurance Agency is part of Confie Seguros’ strategy to build out its geographic footprint throughout Florida. “Florida represents one of our key markets and we are pleased to add Economy Insurance to help broaden our geographic reach within the state. We have operated there for a number of years and Economy will greatly complement our existing locations,” said Joe Waked, CEO of Confie Seguros.

Confie Seguros is a national insurance distribution company primarily focused on the insurance needs of Hispanic consumers. Confie Seguros has annual revenue approaching $200 million with over 300 retail locations. The company has leading market positions in California, Arizona, Texas, Florida, Washington, Oregon, New York, New Jersey, and Nevada and expects to continue its expansion in those and other states, including Illinois, Georgia, and the Carolinas. The company was founded in 2008 and is based in New York (www.confieseguros.com).

ABRY Partners acquired Confie Seguros from Genstar Capital in November 2012. So far in 2013, Confie Seguros has acquired five companies and is expected to complete additional transactions in the second half of the year as it continues to assess its pipeline of potential investments. Confie Seguros completed 22 acquisitions in 2012.

ABRY Partners invests in the media, communications and information sectors. ABRY is currently investing ABRY Partners VII (a $1.6 billion fully-capitalized traditional private equity fund), ABRY Senior Equity III (a $750 million fully-capitalized senior equity/mezzanine fund) and ABRY Advanced Securities Fund II (a $1.2 billion fully-capitalized senior debt fund). The firm is headquartered in Boston (www.abry.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 8-5-13

Praesidian, Brookside and Kemper Invest in John’s Incredible Pizza Company

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Praesidian Capital, Brookside Mezzanine Partners and Kemper Corporation have provided $30 million of first lien debt to recapitalize John’s Incredible Pizza Company. Praesidian Capital provided $17.4 million of the facility with the balance shared equally with Brookside and Kemper.

John’s Incredible Pizza Company (JIPC) is an operator of ten family restaurant and entertainment centers in California and Oregon. JIPC combines indoor amusement park rides with over 100 games and attractions within a multi-themed, buffet-style dining experience to offer guests a wide array of activities suitable for family members of all ages. Each of John’s 10 facilities average around 47,000 square feet. The company is headquartered in Rancho Santa Margarita, CA (www.johnspizza.com).

“We are pleased to complete the recapitalization of our balance sheet with Praesidian in the lead,” said John Parlet, John’s CEO and founder. “In so doing, we will have the right financial structure for future growth. When I started this company, I wanted to create the best environment for families for great food and amazing entertainment. With the support of our in-house programmers and our dedicated staff, we deliver the best every day with systems that no one else has duplicated.”

“We believe John’s has the right mix of operating performance and brand uniqueness to support growth in the western states, and we look forward to working with John Parlet and his team as the company grows,” said Jason Drattell, founder of Praesidian Capital.

Praesidian Capital provides mezzanine capital to small and mid-sized businesses. The firm typically invests in connection with a management/leveraged buyout, recapitalization or refinancing. Praesidian manages over $700 million in committed capital and is based in New York (www.praesidian.com).

Brookside Mezzanine Partners provides subordinated debt and minority equity to small and mid-sized companies seeking long-term capital to support leveraged buyouts, strategic acquisitions, growth capital and recapitalizations. Target companies generally have trailing twelve month revenues of at least $15 million and EBITDA of at least $3 million. Brookside Mezzanine Partners manages $250 million of capital through two mezzanine funds. The firm has offices in Stamford and Boston (www.brooksidemezzanine.com).

Kemper Corporation is a financial services company providing property and casualty insurance, life and health insurance products to individuals, families, and small businesses. Kemper is headquartered in Chicago (www.kemper.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 8-5-13

Rotunda Capital Exits Worldwide Express

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Rotunda Capital Partners has sold its portfolio company Worldwide Express to a group of investors including a significant investment from the management team. During Rotunda’s four-year involvement with the company, Worldwide Express expanded operating margins and grew system-wide sales from $192 million to more than $550 million.

“We developed a strategic partnership with the Worldwide Express management team and are proud to be involved in building the company into one of the leading third party logistics providers serving the small and medium sized business market,” said John Fruehwirth, managing partner at Rotunda Capital. “The company achieved significant growth during our investment and we are pleased to provide our investors with a strong return on invested capital.”

Worldwide Express provides global air and ground shipping services to the small and medium-sized business market. The company is one of the largest authorized resellers of UPS express and ground shipping services and has partnered with a network of over 30 LTL, FTL, expedited and international freight carriers to service most shipping needs. The company has approximately 150 franchisees serving 30,000 customers shipping over 10 million express packages annually and manages more than 300,000 LTL freight shipments annually for its 10,000 freight customers. Worldwide Express is based in Dallas (www.wwex.com).

Rotunda Capital invested in Worldwide Express in 2009 following a difficult period in late 2008 when primary shipping partner DHL unexpectedly withdrew from the US market. In response, Worldwide Express established a new relationship with UPS and the company has since become one of the carrier’s largest authorized resellers. The company also introduced freight-shipping services in early 2009, in partnership with a carrier network that has grown to more than 55 carriers.

“The company enhanced its unique sales model with investments in technology, expanded carrier relationships, and additional freight capabilities to create a compelling value proposition for its customers and carrier partners,” said Bob Wickham, partner at Rotunda Capital. “The successful exit reflects the great job management has done to position the company for continued growth.”

Rotunda Capital invests in businesses with enterprise values of $5 million to $100 million. Sectors of interest include specialty finance, logistics and distribution, government and business services. Since founding in 2009, Rotunda Capital has completed five platform investments and realized two exits. The firm has offices in Washington, DC and Chicago (www.rotundacapital.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 8-5-13

Sentinel Closes Fifth Lower Middle Market Fund

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Sentinel Capital Partners has held a first and final closing of Sentinel Capital Partners V, LP at $1.3 billion.

Fund V’s investors include institutions in the United States, Europe, Japan, China, and Australia, and also include college and university endowments, foundations, state and government retirement systems, corporate pension plans, diversified financial institutions, insurance companies, investment advisors, and Taft Hartley plans. Sentinel’s most recent prior fund, Sentinel Capital Partners IV, LP, initiated investment operations in 2009 with $765 million.

“We are delighted at this fundraising outcome and grateful for the strong show of support from our existing investors and from several new, global investors,” said David Lobel, founder and managing partner of Sentinel.

Sentinel Capital Partners invests in smaller middle market companies in the United States and Canada in partnership with management. The firm invests in management buyouts, recapitalizations, corporate divestitures, and going-private transactions of businesses with EBITDAs of between $7 million and $35 million. Sentinel targets eight industry sectors: aerospace & defense, business services, consumer, distribution, food & restaurants, franchising, healthcare, and industrials. The firm is headquartered in New York (www.sentinelpartners.com).

“Over the course of four funds, Sentinel has developed a consistent and reliable way of doing business that has proven appealing to corporate sellers, small business owners, institutional sellers, and management teams,” said John McCormack, Sentinel’s co-founder. “In a good number of businesses we have invested in, our ability and willingness to tackle financial and business complexity and relationship-intensive situations has worked well for us.”

Kirkland & Ellis was the legal advisor to Sentinel and the Private Fund Group of Credit Suisse Securities (USA) served in an advisory capacity with respect to the private placement.

© 2013 PEPD • Private Equity’s Leading News Magazine • 8-5-13