Archives for November 8, 2013

Huron Capital Acquires Henderson Coffee

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Ronnoco Coffee, a portfolio company of Huron Capital Partners, has acquired Henderson Coffee. This is Ronnoco’s second add-on acquisition since being acquired by Huron in July 2012. In April 2013, Ronnoco Coffee completed its first add-on with the purchase of International Blends, a distributor of coffee products.

Henderson Coffee manufactures and distributes coffee, tea, and related products and equipment to restaurants, casinos and convenience stores throughout Oklahoma and into Arkansas, Missouri and Kansas. The company was founded in 1923 and has about 40 employees. The company is based near Tulsa in Muskogee, OK (www.hendersoncoffee.com).

Ronnoco Coffee is a manufacturer and distributer of coffee, tea and related products sold to convenience stores, foodservice outlets and offices throughout the central United States. With the close of the Henderson acquisition, Ronnoco’s brands now include Henderson, Seattle Roast, Wild Horse Creek, and Camellia. The company was founded in 1904 and is based in St. Louis, MO (www.ronnoco.com).

Huron Capital Partners invests up to $70 million per transaction in middle market companies that have revenues up to $200 million and EBITDAs of $5 million or more. Sectors of interest include education & training, healthcare, specialty chemicals, specialty packaging, consumer products, home decor, business services, industrial manufacturing, food & beverage, and marketing services. The firm was founded in 1999 and currently manages over $1.1 billion in committed equity through four private equity funds. Huron Capital Partners has offices in Detroit and Toronto (www.huroncapital.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 11-8-13

Stonewood Capital Acquires AGY Huntingdon

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Stonewood Capital Management, through a newly formed portfolio company called Huntingdon Fiberglass Products, has acquired the assets of AGY Huntingdon from Owens Corning.

Huntingdon Fiberglass Products (HFP) purchased the continuous filament mat business as well as the wound products and conductive rovings product lines which had been manufactured by AGY at its Huntingdon facility. Continuous Filament Mat (CFM) is a glass fiber reinforcement product used as an input in the production of flat sheet laminate, marine parts and accessories. CFM increases the mechanical performance, such as stiffness and strength, of products, as well as their resistance to chemicals. Huntingdon Fiberglass Products is based in Huntingdon, PA (www.agy.com).

Paul Geist, former manager of the Huntingdon plant when it was owned by Owens Corning, has partnered with Stonewood in the acquisition and will become President of Huntingdon Fiberglass Products. “We are very excited to grow HFP in Huntingdon,” said Mr. Geist. “The environment for growth of our product lines is very positive, and we are keen to quickly take advantage of that.”

Stonewood Capital Management invests in manufacturing, assembly, or distribution businesses that have revenues of $5 million to $60 million and are located in the eastern United States or Canada. The firm is based in Pittsburgh (www.stonewoodcapital.com).

“Stonewood is pleased to announce the closing of this transaction and ready to support HFP’s growth. It is gratifying to invest in a Pennsylvania business and retain and grow employment in the Commonwealth,” said Stonewood President Kenn Moritz.

First National Bank of Pennsylvania provided senior financing in support of Stonewood’s acquisition.

© 2013 PEPD • Private Equity’s Leading News Magazine • 11-8-13

HKW Acquires EnerSafe

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TC Companies, a provider of oil and gas related safety services and a portfolio company of Hammond, Kennedy, Whitney & Company (HKW), has acquired EnerSafe, a provider of safety services and flaring technology to oil & gas operators. HKW acquired TC Companies in August 2013.

EnerSafe is a provider of turnkey hydrogen sulfide safety services and flaring technology to oil & gas operators throughout the southwest. The company is headquartered in Houston, TX (www.enersafellc.com).

TC is a provider of safety services, safety equipment and consulting services to the oil & gas industry. The company is headquartered in Midland, TX (www.tcsafetyinc.com).

On a combined basis, EnerSafe and TC will provide safety services and products to large oil & gas producers in Texas, Louisiana, Arkansas, Mississippi, Kansas, Oklahoma, New Mexico and Colorado.

“This is an ideal match of companies with little overlap in key customers, products, services and geographies, who together will be a true market leader,” said Mark Becker, HKW Partner.

Hammond, Kennedy, Whitney & Company invests in companies with revenues between $20 million and $200 million and EBITDAs between $2 million and $20 million. Over the past 29 years, HKW has completed 44 platform management buyouts of small middle-market companies throughout North America as well as 47 add-on acquisitions. The firm was founded in 1903 and is headquartered in Indianapolis with an additional office in New York (www.hkwinc.com).

“We are very pleased to partner with HKW and are excited about this unique opportunity to find and merge with another high quality safety provider who shares our core values and extends our capabilities,” said Ryan McMillan, President and CEO of EnerSafe. Similarly, Mike Cunningham, President of TC, expressed his optimism. “Combined we will be a highly competitive force in our industry and our customers will benefit through our now full range of safety products and services.”

© 2013 PEPD • Private Equity’s Leading News Magazine • 11-8-13

Kinderhook Industries Acquires Royal Oak Recycling

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Rizzo Environmental Services, a portfolio company of Kinderhook Industries, has acquired V&M Corporation (dba Royal Oak Recycling). The acquisition of Royal Oak represents the 15th environmental services transaction completed by Kinderhook.

Royal Oak Recycling is a recycler of paper, plastic, and metal materials. The company’s service offerings include collection, sorting, and processing of paper, plastic, and metal materials. Royal Oak Recycling was founded in 1935 and is based near Detroit in Royal Oak, MI (www.royaloakrecycling.com).

“The acquisition of Royal Oak will launch Rizzo into the recycling market with significant scale. We look forward to partnering with the Royal Oak management team and getting the opportunity to leverage their recycling industry expertise to help Rizzo expand its service offerings in the recycling sector,” said Rob Michalik, Managing Director of Kinderhook Industries.

Rizzo Environmental Services is a Southeast Michigan provider of curbside collection services for municipal solid waste as well as commercial collection services. The company provides curbside collection for municipal solid waste, recycling, and compost to municipalities throughout Southeast Michigan and currently services 31 municipalities in three counties. Rizzo Environmental Services is headquartered near Detroit in Sterling Heights, MI (www.rizzoservices.com).

“Royal Oak’s longstanding customer relationships and exceptional management made this acquisition very attractive for Rizzo,” said Cor Carruthers, Managing Director at Kinderhook Industries. “The acquisition of Royal Oak enables Rizzo to further diversify its service offerings and thus control more of its collected waste stream.”

Kinderhook Industries makes control investments in companies with transaction values of $10 million to $75 million in which the firm can achieve financial, operational and growth improvements. The firm pursues private equity investments in non-core divisions of public companies, management buyouts of entrepreneurial-owned businesses, troubled situations and existing small capitalization companies lacking institutional support. The firm, founded in 2003, has $770 million of committed capital and is based in New York (www.kinderhook.com).

Financing for the transaction was provided by Comerica Bank. Kirkland & Ellis served as legal counsel to Kinderhook and Rizzo.

© 2013 PEPD • Private Equity’s Leading News Magazine • 11-8-13

Apollo May Raise Target For Fund VIII

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Fundraising success has found Apollo Global Management as the firm is considering raising its Fund VIII target in response to strong investor demand.

During the third quarter, Apollo raised approximately $3.3 billion for its newest private equity fund, Apollo Investment Fund VIII, LP, bringing total committed capital for the fund to $10 billion through September 30, 2013. As of today, Apollo has received total fund commitments of approximately $12 billion for Fund VIII. The hard cap for Fund VIII is $15 billion.

According to reports, Apollo is seeking to raise the Fund VIII hard cap to $17.5 billion in order to meet the demand from institutional investors. The last fund raised by Apollo was in December 2008 when it raised $14.7 billion for Apollo Investment Fund VII.

Apollo is a global alternative investment manager with offices in New York, Los Angeles, Houston, London, Frankfurt, Luxembourg, Singapore, Mumbai and Hong Kong. Apollo has assets under management of approximately $114 billion in private equity, credit and real estate funds invested across a core group of nine industries (www.agm.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 11-8-13

PEGCC: Private Equity Returns Continue to Outpace S&P 500

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The Private Equity Growth Capital Council released its latest quarterly performance update today, which shows private equity returns (net of fees) outperformed the S&P 500 (including dividends) for 3-year, 5-year and 10-year horizons by 2.6, 2.2 and 6.1 percentage points, respectively.

“Private equity continues to play a critical role in the US economy by growing and creating more valuable businesses across the country, said PEGCC President and CEO Steve Judge. “At its core, private equity is about strengthening companies to generate profits for limited partners, including pensions endowments and foundations. This report highlights the superior returns that attract limited partners to the private equity and growth capital asset class,” said Mr. Judge.

The PEGCC research team also analyzed returns from 13 of the largest US public pension funds with available financials and found that the pensions’ median private equity returns (net of fees) outperformed the S&P 500 on 3-year and 10-year horizons by 0.2 and 5.5 percentage points, respectively.

“This private equity performance analysis supplements our recent annual study showing that private equity returns to large public pension funds outperform all other asset classes over a 10-year time horizon,” said Bronwyn Bailey, PEGCC vice president of research. ”Private equity is an essential asset class for pensions, foundations and endowments looking for superior investment performance from patient capital,” concluded Ms. Bailey.

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).

For a FREE copy of the Private Equity Performance Update click HERE.

© 2013 PEPD • Private Equity’s Leading News Magazine • 11-8-13