Archives for October 23, 2013

Graycliff Invests in Talon Innovations

by

Graycliff Partners has made an investment in Talon Innovations, a designer and manufacturer of machined products.

Talon Innovations is a designer and manufacturer of machined products to the semiconductor industry. Products include gas delivery systems, face seal fittings, stainless steel weld fittings, diaphragm valves and custom weldments. The company also has engineering and manufacturing capabilities to serve the medical contract manufacturing, oil and gas, aerospace and other industries. Talon is based in Sauk Rapids, MN (www.taloneng.com).

“We are pleased to partner with a world class innovator like Talon,” said Duke Punhong, Principal, Graycliff Partners. “Graycliff has a long history of investing in industrial manufacturers and partnering with management to drive growth and we look forward to working with a recognized market leader with a history of excellence. We believe Graycliff will be a value-added partner to further Talon’s dedication to delivering superior machined solutions and customer service.”

Graycliff Partners invests from $5 million to $25 million of equity and mezzanine capital in companies with revenues of at least $10 million and EBITDA margins of 10% or higher. Sectors of interest include manufacturing, services and distribution. Both control and minority investments are considered. The firm was formed in December 2011 by the former investment team of HSBC Capital. Graycliff Partners is headquartered in New York with an additional office in São Paulo (www.graycliffpartners.com).

“We are extremely pleased to be working with the Graycliff Partners team. Our shared commitment to build on the demonstrated accomplishments of Talon’s diverse capabilities and our focus on delivering high-value solutions to our customers will drive continued success,” said Greg Olson, Chief Executive Officer of Talon Innovations.

© 2013 PEPD • Private Equity’s Leading News Magazine • 10-23-13

Resilience Acquires Avionics International Supply

by

Aerospace Products International, a portfolio company of Resilience Capital Partners, has acquired the assets of Avionics International Supply. Resilience Capital Partners acquired Aerospace Products International in March 2013.

“Adding AIS’s product offerings is another step toward our goal of creating the leading independently-owned parts distributor in the aerospace industry,” said Steven Rosen, Co-CEO of Resilience.

Avionics International Supply is a wholesale distribution and repair services company. The company’s main focus is the procurement and sale of new and used parts and supplies, tooling and test equipment and other supplementary services and programs that are all designed to support aircraft repair facilities. The company was founded in 1984 and is based near Dallas in Denton, TX (www.avionicsinternational.com).

Aerospace Products International (API) distributes aircraft parts and accessories to manufacturers, maintenance providers and operators of widely used military, commercial, corporate and general aviation aircraft. The company also provides supply chain management services to the aviation industry. API is based in Memphis (www.apiworldwide.com).

Resilience Capital Partners specializes in investing in middle market companies with $25 million to $250 million in revenues across a range of industries. The firm’s investment strategy is to acquire companies in a variety of special situations including underperformers, corporate divestitures, turnarounds, and orphan public companies. Since its inception in 2001, Resilience has acquired 32 companies under 20 platforms with over $2 billion in revenues. The firm is based in Cleveland (www.resiliencecapital.com).

The acquisition of Avionics International Supply is part of the sixth platform investment in The Resilience Fund III, LP which was raised in 2012 with $222 million of committed capital.

© 2013 PEPD • Private Equity’s Leading News Magazine • 10-23-13

Arbor Acquires PBF Pita Bread Factory

by

Arbor Investments has acquired PBF Pita Bread Factory, a manufacturer and marketer of fresh and frozen goods.

“PBF had all the qualities we were seeking for Arbor’s first investment in Canada,” said Arbor President Joseph Campolo. “We look forward to building on the company’s excellent reputation as we add new customers and product capabilities. We will also be looking to grow the business through complementary acquisitions both in Canada and the United States.”

PBF Pita Bread Factory is a manufacturer and marketer of fresh and frozen goods. The company serves bakery-deli, foodservice and private label customers in Canada and the United States. Products include pita bread, tortillas, bagels, naan, cookies and pies. Brand names include PBF Signature, Bakestone Brothers, and 24th Ave. PBF was founded in 1984 and is headquartered in Burnaby, British Columbia (www.pbf.bc.ca).

“PBF exemplifies the type of high-quality food manufacturer that Arbor seeks for its portfolio,” said Arbor Vice President Alan Weed. “PBF has thrived under the ownership of the Hayek family, and we are thrilled to be acquiring the business as it enters its next stage of growth.”

Fady, Sid and Ron Hayek will remain active in daily operations of the company and the family will retain a significant ownership stake going forward.

“Arbor is a great fit for us, and we look forward to a prosperous future for the company,” said Fady Hayek, President of PBF. “Their extensive industry knowledge and experience in the baking segment in particular made them a very attractive partner for our family business. They will be a valuable resource on many levels and will allow us to maintain our historically strong trajectory of growth and profitability.”

Arbor invests in the food, beverage and related industries. The firm has acquired or invested in over 33 food and beverage companies in North America and currently has $600 million of assets under management across three funds. Arbor was founded in 1999 and is based in Chicago (www.arborpic.com).

KPMG advised the Hayek family and PBF on this transaction.

© 2013 PEPD • Private Equity’s Leading News Magazine • 10-23-13

Mainsail Partners Invests in Zen Planner

by

Zen Planner, a provider of cloud-based business management software for the health and fitness industry, has received a $10 million growth equity investment from Mainsail Partners.

“This investment is an important milestone in our company’s history and growth,” said Jeff Gardner, Zen Planner’s CEO. “Our goal is to make business management easy for our health and fitness customers so they can focus on delivering great experiences for their members. This growth capital, combined with Mainsail’s experience in scaling companies like ours, will allow us to further invest in product development, mobile solutions, sales and marketing, and delivering the high quality of service our customers have come to expect.”

Zen Planner is a provider of cloud-based business management software for the health and fitness industry. The company’s software manages all areas of business, including: marketing campaigns, customer relationship management, automated online payments, class and appointment scheduling, event registration, expense tracking, and detailed financial reporting across multiple studios or locations. Zen Planner serves business owners across multiple disciplines, including general fitness gyms, martial arts, CrossFit, yoga, Pilates, gymnastics and dance studios, among others. The company was founded in 2006 and is based near Denver in Highlands Ranch, CO (www.zenplanner.com).

“Zen Planner’s intuitive cloud-based technology, combined with the company’s relentless focus on customer service, delivers the best solution for a large percentage of the health and fitness market that is still using manual processes or suboptimal solutions,” said Vinay Kashyap, a Vice President at Mainsail Partners, who will also be joined by Jason Payne from Mainsail on the Zen Planner board. “Most importantly, we have partnered with a capable management team, led by Jeff Gardner, who is passionate about the customer base they serve.”

Mainsail Partners invests from $5 million to $15 million in companies that are located in the United States and Canada with revenue of $4 million to $50 million and EBITDA of $1 million to $8 million. The firm was founded by Gavin Turner and Jason Payne in 2003 and is based in San Francisco (www.mainsailpartners.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 10-23-13

New Report Ranks Top 10 Pension Funds by Private Equity Returns and Allocations

by

The Private Equity Growth Capital Council released a new study today revealing which public pension funds invested the most in private equity, as well as those that produced the highest rate of return on their private equity portfolios. A link to a free copy of the PEGCC’s Public Pension Fund Analysis is available at the end of this article.

According to the analysis, private equity returns to large public pension funds continue to outperform all other asset classes over 10-year time horizons. The report examines 146 U.S. public pension funds with assets greater than $1 billion, analyzes the asset allocation of these funds, and compares the performance of their private equity investments to other asset classes.

“Time and again private equity has proven that it’s the single best asset class for public pensions, by delivering superior returns over long time horizons,” said Steve Judge, president and CEO of the PEGCC. “Private equity continues to strengthen the retirement security of the millions of American police officers, firefighters, teachers and administrators who rely on hard-earned pension benefits. There is no doubt that private equity returns are essential to improving the pension funding equation.”

The PEGCC’s analysis is broken down into four main categories. The highlights from each category are below.

  • Top 10 Pensions by PE Returns (%): The report found that the Massachusetts Pension Reserves Investment Trust (PRIT) maintained the highest private equity performance, followed by the Los Angeles County Employees Retirement Association and the Teacher Retirement System of Texas. The rankings are based on 10-year and 5-year annualized returns by pensions’ private equity investments.
  • Top 10 Pensions by PE Allocation ($): CalPERS has invested the most capital ($34.2 billion) in private equity compared to all other pension funds in the country. CalSTRS and the Washington State Department of Retirement Systems allocated the second and third greatest amounts ($22.6 billion and $16.1 billion, respectively) to private equity funds.
  • Pension Asset Allocation: Based on the pensions studied, the report found that private equity investment makes up 10.3 percent of total public pension fund investment, compared to 9.6 percent from last year’s PEGCC report. Private equity is the third most invested asset class behind public equity and fixed income.
  • Pension Returns by Asset Class: Private equity delivered a 10 percent annualized return to the median public pension over the last 10 years, more than any other asset class. By comparison, the median public pension received a 6.5 percent annualized return on its total fund during the same period.

“This research shows that private equity is the only asset class delivering annualized returns greater than the 8 percent target return set by most public pensions for their total plan,” said PEGCC Vice President of Research Bronwyn Bailey. “Pension investment in private equity helps to offset underperforming asset classes and alleviates some financial stress on pensions, their members and the constituents who support them.”

The Private Equity Growth Capital Council is an advocacy, communications and research organization, and resource center established to develop, analyze and distribute information about the private equity and growth capital investment industry and its contributions to the national and global economy. Established in 2007, the PEGCC is based in Washington, DC (www.pegcc.org).

The PEGCC public pension funds report is compiled using information from publicly available 2012 annual financial reports and quarterly reports from the 146 largest public pension funds. Private equity returns are reported net of management fees and carried interest. Performance calculations for other asset classes include returns that are both gross and net of fees on marketable securities.

Click HERE for a free copy of the PEGCC’s Public Pension Fund Analysis.

© 2013 PEPD • Private Equity’s Leading News Magazine • 10-23-13

North Bridge Closes Fund 2

by

North Bridge Growth Equity has held a final closing of its second fund with over $580 million of commitments. This brings North Bridge Growth Equity’s total capital under management to more than $1.1 billion.

“We are pleased to announce the closing of North Bridge Growth Equity II and are grateful for the continued support of our longstanding investors, as well as the substantial interest from new investors,” said Ed Anderson, managing general partner at North Bridge.

North Bridge Growth Equity II will invest primarily in privately held, technology and tech-enabled businesses that are entrepreneur owned and managed, and have grown to tens of millions in revenue with little or no outside capital.

“Our investment strategy remains the same, along with the team and the fund size,” said Doug Kingsley, managing director at North Bridge Growth Equity. “Plus, with the natural synergy we enjoy with our venture arm, we are confident in our ability to identify and partner with exceptional management teams of leading growth companies to take them to new levels of revenue, profitability and governance.”

North Bridge Growth Equity invests from $15 million to $75 million as either a minority or majority investor in rapidly growing companies that have $15 million to $300 million in annualized revenue. North Bridge Growth Equity is led by a team of four general partners – Matt Blodgett, Doug Kingsley, Mike Pehl and Russ Pyle – together they have 70 years of combined operational and investment experience. Combined with five Principals and eight Associates, the team looks to make growth equity investments in growth companies in technology and technology-enabled industries. The firm has offices in Palo Alto, CA and Waltham, MA (www.nbvp.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 10-23-13