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Archives for March 2014

Keystone Acquires Kidde Fire Trainers

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kidde nf1Keystone Capital has acquired Kidde Fire Trainers, a business unit of United Technologies’ Building & Industrial Systems Group.

Kidde Fire Trainers (KFT) designs, installs and services live fire training simulators and related technologies. Customers include fire academies, municipalities, governments, and industrial companies. The company is headquartered in Montvale, NJ with additional offices in Barlborough, UK and Aachen, Germany (www.kiddefiretrainers.com).

gwilliam nf“The KFT transaction is a perfect fit with Keystone’s investment criteria – a market leader with a great brand, a solid management team, and opportunities for growth and value creation under our stewardship,” said Scott Gwilliam, Managing Director of Keystone Capital. “We were glad to have worked with United Technologies on this important transaction, and look forward to working with the KFT management team to build a strong standalone business.”

All management and employees of KFT will be retained in the transaction, and the operations of the company will be unchanged.

“The most important benefit of this transaction from our perspective is our new ability to operate as a standalone business focused on nothing but fire training simulators,” said Rob Lane, the newly-appointed CEO of Kidde Fire Trainers. “We are energized and excited by the idea of working with Keystone and leveraging their extensive experience with corporate divestitures such as this.”

Keystone Capital invests in middle market companies with EBITDAs of $3 million to $12 million that are market leaders in niche, mature industries. Sectors of interest include niche manufacturing, industrial technology, food products and packaging, healthcare products and services, business and professional services. Keystone Capital manages in excess of $200 million in investment capital and is based in Chicago (www.keystonecapital.com).

Senior debt financing was provided by The Private Bank, and legal counsel was provided to Keystone by Kirkland & Ellis.

© 2014 PEPD • Private Equity’s Leading News Magazine • 3-27-14

Madison Dearborn Exits Fieldglass

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fieldglass nfSAP has agreed to acquire Fieldglass, a provider of technology for procuring and managing contingent labor and services and a portfolio company of Madison Dearborn Partners. SAP expects to complete the transaction in the second quarter of 2014.

Fieldglass, acquired by Madison Dearborn in October 2010, is a provider of vendor management services that are used by Global 2000 companies to manage and track their use of temporary labor. The company was founded in 1999 and is headquartered in Chicago with additional offices in London and Sydney (www.fieldglass.com).

Madison Dearborn Partners has more than $18 billion of capital under management. Sectors of interest include basic industries; business and government services; consumer; financial and transaction services; health care; and telecom, media and technology services. The firm has 44 investment professionals, consisting of 29 Principals and 15 Associates. Madison Dearborn was founded in 1992 and is based in Chicago (www.mdcp.com).

SAP (NYSE: SAP) is a market leader in enterprise application software. The company was founded in 1972 and is headquartered in Walldorf, Germany (www.sap.com).

“The acquisition of Fieldglass creates a compelling advantage for SAP customers as they access, attract and manage talent via the networked economy,” said Bill McDermott and Jim Hagemann Snabe, co-CEOs of SAP. “This move reaffirms SAP as the undisputed leader of integrated human resources and procurement in the cloud for businesses of all sizes and industries. Combining Fieldglass with SAP is a significant milestone in our strategy to help businesses simplify everything.”

© 2014 PEPD • Private Equity’s Leading News Magazine • 3-27-14

Blackthorne Partners Acquires Hughes Company

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hughes nf2Blackthorne Partners has acquired Hughes Company, a food processing equipment manufacturer. Blackthorne partnered with business executive Ross Lund on the transaction and he has become president and chief executive officer of the company which was renamed Hughes Equipment Company upon closing of the transaction. Jeff Powell, the former president and owner, will retain an interest in the company and serve as a consultant to Mr. Lund.

Hughes Equipment Company was founded in 1961 and is a manufacturer and distributor of stainless steel equipment used in the food processing industry. Products include standard and customized equipment for vegetable, pasta, rice, fruit and root crop processing and preparation. The company has a 60,000-square-foot facility located near Madison in Columbus, WI (headquarters) (www.hughesequipment.com).

syburg nf“Hughes Equipment Company has an impressive lineup of highly reliable products, unparalleled customer service, and an incredibly talented staff,” said John Syburg, a managing director at Blackthorne Partners. “We are confident we can build on that great foundation and meet our customers’ needs to an even greater degree.”

Blackthorne Partners invests in companies based in the upper Midwest that have $4 million to $15 million in revenues and EBITDA of at least $1 million. Sectors of interest include outsourced business services, light manufacturing, and value-added distribution. Blackthorne Partners is headquartered in near Milwaukee in Brookfield, WI (www.blackthornepartners.com).

“We have aggressive growth goals for the Hughes, which I know we can achieve based on the company’s existing staff of highly skilled and dedicated employees, our existing manufacturing technology, and the new resources we will bring to the operation,” said Mr. Lund. “Through investments in our people and in technology, we will help our customers become even more productive.”

© 2014 PEPD • Private Equity’s Leading News Magazine • 3-27-14

Levine Leichtman Closes Oversubscribed Fund V

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levine li nfLevine Leichtman Capital Partners held a final closing on $1.65 billion of capital commitments for Levine Leichtman Capital Partners Fund V, LP, exceeding its target of $1.5 billion. The firm’s earlier fund, Levine Leichtman Capital Partners IV, LP, a 2008 vintage fund, had $1.1 billion of capital commitments.

Fund V received worldwide support from institutional investors including public and private pension funds, sovereign wealth funds, endowments and foundations, insurance companies, fund of funds and family offices.

Lauren Leichtman nf“We are very pleased by the support we have received from existing and new limited partners. Institutional investors responded very favorably to our differentiated investment strategy and to our 30 year investment track record. LLCP has generated consistent and attractive risk-adjusted returns across many economic cycles,” said Lauren Leichtman, CEO of Levine Leichtman Capital Partners.

Fund V has already closed two investments and invested approximately $200 million of capital. In November 2013 Fund V acquired Genova Diagnostics, a specialty clinical laboratory that is based in Asheville, NC (www.gdx.net). In August 2013 Fund V made a growth capital investment in SFERRA Fine Linens, a designer and producer of branded, Italian luxury linen products sold through luxury retailers and specialty boutiques. SFERRA is headquartered in Edison, NJ (www.sferra.com).

Levine Leichtman manages approximately $7 billion of capital through private equity partnerships, distressed debt and leveraged loan funds. The firm is currently making new investments through Levine Leichtman Capital Partners V, LP; Levine Leichtman Capital Partners SBIC Fund, LP; and Levine Leichtman Capital Partners Private Capital Solutions II, LP. The firm is based in Los Angeles with offices in Chicago, Dallas, New York and London (www.llcp.com).

© 2014 PEPD • Private Equity’s Leading News Magazine • 3-27-14

Scott-Macon Adds Consumer Products and Retail Investment Banker

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scott macon nf1Scott-Macon, one of the oldest, independently-owned mid-market investment banks, has hired Scott Silverman as a new Managing Director. Mr. Silverman will lead the firm’s investment banking activities in the consumer and retail sectors.

silverman nf1Mr. Silverman specializes in mergers and acquisitions and has more than 20 years of experience advising companies and financial sponsors on both healthy and distressed transactions. He has acted as financial advisor to Boards of Directors, Special Committees, and/or principal shareholders in the purchase or sale of numerous businesses in a variety of industries, identifying, analyzing, and recommending strategic and financial alternatives and opportunities. In his career he has executed domestic, international, and cross-border transactions with a combined deal value of more than $15 billion.

Prior to joining Scott-Macon, Mr. Silverman was a Managing Director and Head of Consumer and Retail Investment Banking at Westbury Group, Managing Director at CDG Group in New York where he led the M&A practice, and a Vice President in the Mergers & Acquisitions Group at Credit Suisse First Boston in New York. Mr. Silverman also previously worked in Ernst & Young’s Corporate Finance Group in New York and Moscow where he started his career in corporate finance in 1993. He holds a BA in History from Brown University and received his Business Diploma from The London School of Economics and Political Science.

dimmitt nf1“With the continued strengthening of the consumer sector, we sought to establish the strongest possible senior banker to lead us in this critical area. With Scott’s depth of experience and track record of service to his clients, he is an outstanding choice to spearhead this effort. Major consumer and retail companies have long valued sound independent advice in the context of mergers and acquisitions,” said Robert Dimmitt, Senior Managing Director.

Scott-Macon is focused on middle-market transactions globally in the areas of mergers and acquisitions, the direct placement of debt and equity, and corporate advisory services. Clients include privately-owned companies, private equity firms and publicly-traded US and global corporations. The firm was founded in 1973 and is based in New York (www.scott-macon.com).

© 2014 PEPD • Private Equity’s Leading News Magazine • 3-27-14

May River Acquires Pride Engineering

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pride nf1May River Capital has acquired Pride Engineering in partnership with management and other co-investors. The transaction included the majority of Pride’s prior shareholders, including Mark Zauhar, founder; Bruce Allyn, President; and David Gadow, Director of Engineering & Manufacturing.

“We are delighted to partner with May River. They share our vision for growing Pride and can provide financial, strategic and professional resources required to accomplish our goals and to provide our customers with the best products in the world,” said Bruce Allyn, President of Pride.

Pride Engineering designs and manufactures multi-piece machine tools and related equipment for the front-end production of two-piece food and beverage cans. The company’s product offering includes can body-forming tool packs, can bottom formers and precision grinders. The company’s products are used in over 365 can-making lines around the world. Pride is headquartered in the Minneapolis suburb of Brooklyn Park (www.pridecan.com).

griesemer nf“We were immediately drawn to Pride’s proprietary technology, its strong customer relationships, its large, global installed base, and the mission critical nature of Pride’s products,” said Steve Griesemer, May River Partner.

May River Capital invests from $10 million to $40 million of equity in companies with revenues of at least $15 million and EBITDA between $3 million and $15 million. Sectors of interest include manufacturing, commercial services, as well as supply chain and value-added distribution. Control investments are preferred but the firm will consider significant minority investments. May River was founded in January 2012 by Chip Grace, Dan Barlow and Steve Griesemer and is headquartered in Chicago (www.mayrivercapital.com).

grace nf 1“May River is pleased to be selected to partner with Pride’s management team in the acquisition. We look forward to assisting Bruce and the team in realizing Pride’s full potential in the years to come,” said Chip Grace, a May River Partner.

Minneapolis-based Investment bank Franklin Partners (www.franklinpartnersinc.com) served as financial advisor to Pride and the selling shareholders in this transaction. Fifth Third Bank (www.53.com) provided senior and subordinated debt financing to support the transaction.

© 2014 PEPD • Private Equity’s Leading News Magazine • 3-26-14

Quad-C Exits Cloverhill Bakery

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cloverhill nfQuad-C Management has sold its portfolio company Cloverhill Bakery, a manufacturer of individually wrapped sweet baked goods, to Switzerland-based global food business ARYZTA AG. Quad-C invested in Cloverhill in 2009.

Cloverhill is a manufacturer of individually wrapped pastries for retail, co-pack, foodservice and vending customers. The company’s product portfolio includes over 30 product formulations and 300 SKUs, including fold-over and round Danish, cinnamon rolls, honey buns, donuts, muffins, crumb cakes, and cream-filled cakes. Cloverhill operates two world-class bakeries in the Chicago metropolitan area. During Quad-C’s investment period, Cloverhill has invested approximately $100 million in growth capital and grown revenue by more than 80%. Cloverhill was founded in 1961 and is headquartered in Chicago (www.cloverhill.com).

winslow nf“Back in 2009, Quad-C saw Cloverhill as an exciting opportunity to invest in a high growth market leader in the packaged foods space, but equally as important, to partner with an aggressive, talented management team willing to reinvest significantly with us as co-owners,” said Frank Winslow, partner, Quad-C Management. “We are thrilled with the outcome of our work together, which resulted in substantial expansion and the creation of long-term value for the company.”

Quad-C is a middle market private equity firm that invests from $35 million to $125 million of equity in companies with enterprise values of $75 million to $400 million. Sectors of interest include business services, consumer, general industrial, healthcare, specialty distribution and transportation/logistics. The firm is currently investing Quad-C VIII, a $700 million fund raised in 2012. Quad-C was founded in 1989 and in its 25-year history has invested over $2 billion of equity across more than 50 companies. The firm is headquartered in Charlottesville, VA (www.quadcmanagement.com).

burns nf“We are very pleased with the success of the Cloverhill investment and feel the partnership we created with management is indicative of our investment approach at Quad-C – one where interests are aligned among our limited partners, ourselves and management and where strategies are set in a collaborative fashion. We wish the team luck and look forward to their continued success,” added Steve Burns, senior partner, Quad-C Management.

The buyer of Cloverhill Bakery, Aryzta, is a global bakery company dually listed on the Swiss and Irish stock exchanges. The company’s range of products includes artisan breads, sweet baked goods, and an array of other items such as pizza, tarts, and pies. Aryzta is headquartered in Zurich, Switzerland with operations across North America, South America, Europe, Southeast Asia, Australia, and New Zealand (www.aryzta.com).

© 2014 PEPD • Private Equity’s Leading News Magazine • 3-26-14

H.I.G. Exits American Hardwood Industries

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american hardwood nfH.I.G. Capital has completed the sale of its portfolio company American Hardwood Industries to Baillie Lumber.

American Hardwood Industries (AHI) is a manufacturer and supplier of hardwood lumber in the United States and abroad. AHI is the largest producer in its regions with over 100 million board feet of annual capacity across eleven sawmills and kiln drying facilities in Virginia and throughout the Appalachian territory. AHI is a vertically-integrated supplier that sells its products under the Augusta, Blue Triangle and Graham Lumber brands, as well as under its Cross Creek wholesale trading division. The company also sells hardwood flooring under the Montebello Flooring brand. AHI was founded in 1955 and is headquartered in Waynesboro, VA (www.ahwood.com).

Baillie Lumber is one of North America’s largest hardwood lumber manufactures, distributors and exporters. The company is based near Buffalo in Hamburg, NY (www.baillie.com).

H.I.G. originally invested in AHI, then Augusta Lumber, in 2006. Since that time, the company has completed multiple add-on acquisitions that more than doubled the size of the business and also invested heavily in manufacturing best practices.

“H.I.G. has been an outstanding and committed partner to American Hardwood Industries. Through a series of add-on acquisitions and operational investments, H.I.G.’s support has helped AHI to more than double its revenues, upgrade its equipment, invest in business processes, develop its brands and expand its international reach to establish the company as a leading exporter of US hardwoods,” said John O’Dea, CEO of AHI.

H.I.G. Capital specializes in providing capital to small and medium-sized companies and invests in management-led buyouts and recapitalizations of manufacturing or service businesses. H.I.G. Capital has more than $15 billion of capital under management. The firm was founded in 1993 and is based in Miami with additional offices in Atlanta, Boston, Chicago, Dallas, New York, San Francisco, London, Hamburg, Madrid, Milan, Paris, and Rio de Janeiro (www.higcapital.com).

© 2014 PEPD • Private Equity’s Leading News Magazine • 3-26-14

J.F. Lehman Acquires Specialized Response Solutions

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SRS NF2National Response Corporation, a portfolio company of J.F. Lehman & Company, has completed the acquisition of Specialized Response Solutions.

Specialized Response Solutions (SRS) is a provider of emergency response, firefighting, specialized equipment fabrication, training, and other specialized response services primarily for the rail and industrial chemicals industries. SRS will operate under NRC’s Environmental Services – West division. The company is headquartered in Fort Worth, TX (www.specializedresponse.com).

National Response Corporation (NRC), acquired by J.F. Lehman in March 2012, is a provider of diversified environmental, industrial and emergency response services. The company has approximately 910 employees and is headquartered in Great River, NY (Long Island) with regional offices throughout the US and internationally (www.nrcc.com).

“SRS is a great fit with NRC’s strategy’s to expand our environmental services offerings in the high hazard and rail industries. We look forward to working with SRS to expand our presence and capabilities in the Texas market to better serve our new and existing customer base as well as helping SRS grow its national response platform and capabilities,” said Steve Candito, CEO of NRC.

J.F. Lehman & Company is a middle-market private equity firm focused primarily on the maritime, defense, and aerospace sectors. The firm was founded by Dr. John Lehman, who served six years as Secretary of the United States Navy. To date, J.F. Lehman has made investments in companies with an aggregate transaction value of approximately $1.6 billion. The firm was founded in 1992 and is headquartered in New York with additional offices in Washington, DC and London (www.jflpartners.com).

© 2014 PEPD • Private Equity’s Leading News Magazine • 3-26-14

FTV Capital Closes Oversubscribed Fourth Fund

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ftv nfFTV Capital has held a final closing of its fourth fund, FTV IV, LP, with $700 million of limited partner commitments. The new fund had an initial target of $500 million and was significantly oversubscribed.

gilbert nf“Given the highly competitive fundraising environment, we were thrilled by the significant demand for FTV IV,” said Karen Derr Gilbert, FTV Capital partner and head of business development who spearheaded FTV’s fundraising efforts. “We are appreciative of the confidence our existing investors continue to entrust us with, and we look forward to building long-term, productive relationships with our new investors.”

Investors in FTV IV include banks, insurance companies, public and corporate pension plans, college and university endowments, foundations, investment advisors, family offices, high net worth individuals and strategic investors.

garman nf“We are extremely grateful for the support of our existing investors who value our distinct approach to growth equity investing and the strong results we have generated,” said Richard Garman, FTV Capital managing partner. “Our long-tenured team, deep sector knowledge, theme-based sourcing approach and unique Global Partner Network were also appealing to high quality, new investors who have chosen to partner with FTV. We are very excited to welcome our new investors to the fund.”

FTV IV will continue the strategy of earlier funds by investing in companies that have $10 million to $100 million in revenue and are growing 20 percent plus annually, are typically profitable, and are validated by blue chip enterprise customers and distribution partners. Sectors of particular interest include business services and technology, financial services and payments/transaction processing.

bernstein nf“Our team has already invested $170 million in five exciting new FTV IV portfolio companies which achieved aggregate revenue growth of 49% in 2013,” said Brad Bernstein, FTV Capital partner and head of the firm’s New York office. “The new capital will enable us to continue to partner with proven, motivated management teams in highly attractive businesses, where our contributions can help accelerate revenue growth, profitability and compelling returns for our investors.”

Founded in 1998, FTV Capital has invested in 81 portfolio companies and has raised over $1.8 billion across four funds since its inception. FTV Capital leverages its industry sector expertise and Global Partner Network, a group of leading enterprises and executives, to help its portfolio companies drive growth. The firm has offices in San Francisco and New York (www.ftvcapital.com).

© 2014 PEPD • Private Equity’s Leading News Magazine • 3-26-14

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