Archives for April 22, 2014

Prospect Partners Acquires E.D.N. Aviation

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Velocity Aerospace Group, a portfolio company of Prospect Partners, has acquired E.D.N. Aviation, a provider of aviation repair services.  This acquisition expands Velocity’s repair and overhaul service capabilities into control panel services.  EDN will continue to be led by its current management team.

E.D.N. Aviation manufactures, repairs and refurbishes aircraft cockpit panels. The company also specializes in multi-unit fabrication and engineering/design services for panel components such as light plates, circuit breaker panels, control wheels, and knobs.  EDN is a Federal Aviation Administration (FAA) and European Aviation Safety Agency (EASA) certified repair station.  The company is based in Van Nuys, CA (www.ednaviation.com).

Velocity Aerospace Group provides aviation MRO services to commercial air transports, corporate business aircraft, regional airlines, and helicopters. The company operates FAA-certified repair stations in California and Florida that offer a range of test, repair, and overhaul services, including capabilities in avionics and in electronic instrumentation. Prospect Partners first invested in Velocity in April 2013.  The company is based Burbank, CA (www.velocityaerospace.com).

“As Velocity further expands its capabilities and customer base through organic growth and select key acquisitions, the company is increasingly well-positioned as a single-source provider of MRO services for a wide range of customers’ needs throughout the airplane,” said Maneesh Chawla, a Principal of Prospect Partners. “Velocity can service everything from sophisticated traffic collision avoidance systems, gyroscopes and LED, NVG (night vision goggles), and electroluminescent panels to standard accessories like ovens and coffee makers.”

Velocity continues to seek additional acquisitions of other niche aviation MRO service businesses based in the United States.

Prospect Partners focuses exclusively on management-led leveraged recapitalizations and acquisitions of niche market leaders with revenues of less than $75 million.  Since 1998, Prospect Partners has invested nationwide in more than 110 companies in a range of niche manufacturing, distribution, and specialty service markets. The firm has $470 million of capital under management and is based in Chicago with an additional office in Menlo Park (www.prospect-partners.com).

“EDN is a leading repair and manufacturing company run by an exceptional leadership team,” said Velocity CEO Dale Gabel. “In addition, EDN provides Velocity with another strong cornerstone in our overall growth strategy as we continue to grow our family of aviation MRO services companies able to service the current and future needs of worldwide airline fleets. The combined vision of our leadership and engineering teams gives Velocity competitive advantages and differentiated services we can provide to our customers.”

© 2014 PEPD • Private Equity’s Leading News Magazine • 4-22-14

Balance Point Acquires Johnny on the Spot

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Balance Point Capital Partners has acquired Johnny on the Spot, a provider of portable toilets and related products.

Johnny on the Spot (JOTS) is a provider of portable toilets and related products to the special event and construction industries, as well as residential and commercial septic system maintenance, inspections, repairs and installations in New Jersey, New York and Pennsylvania.  The company was founded in 1969 and is headquartered in Old Bridge, NJ (www.johnnyonthespot.com).

“We are very excited to have JOTS join the Balance Point portfolio.  This transaction is quintessential Balance Point:  helping successful businesses like JOTS enter the next chapter in their evolution by providing differentiated capital and leveraging our network.  We look forward to supporting the many men and women who comprise the JOTS team and have contributed to its growth trajectory,” said Justin Kaplan, a Partner with Balance Point.

Balance Point Capital Partners invests from $5 million to $20 million of mezzanine and equity in lower middle market companies that have revenues of $10 million to $150 million and EBITDAs between $2 million and $25 million. Sectors of interest include business services, niche manufacturing, consumer & industrial, branded products, aerospace & defense, healthcare, and technology. Balance Point Capital Partners was founded in 1988 and is based in Westport, CT (www.balancepointcapital.com).

JOTS’ president and owner, Jesse Thompson, will continue in his current position and remains a significant shareholder in the company.  “I am very excited about the partnership with Balance Point.  I am looking forward to working with my new capital partners to help facilitate and support our growth efforts as we enter a new phase for the company,” said Mr. Thompson.

© 2014 PEPD • Private Equity’s Leading News Magazine • 4-22-14

Great Point Invests in Corrona

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Great Point Partners has made an investment in Corrona, a provider of health care data with a specific emphasis on rheumatoid arthritis.

“Great Point demonstrated their potential value to Corrona during our first meeting and stood out from other potential private equity partners,” said James Cavan, President and COO of Corrona. “The team was impressively knowledgeable about the business of clinical drug monitoring and research. Corrona will benefit from their new insights and experiences along with additional working capital to address our growth goals. As a result of this investment, our expected growth to new therapeutic areas and geographic representations will accelerate which will benefit our clinicians, subscribers, researchers and most importantly patients.”

Corrona (The Consortium of Rheumatology Researchers of North America) is an observational registry that provides clinical real world data obtained prospectively from both physicians and patients at the time of a routine clinic visit.  The company has a large and robust dataset for rheumatoid arthritis, psoriatic arthritis, spondyloarthopathy (spine arthritis) and gout, and is branching out to other autoimmune and chronic diseases. The company was founded in 2000 by Dr. Joel Kremer and is based west of Boston in Southborough, MA (www.corrona.org).

“Corrona has grown rapidly with an impressive customer base because the company is uniquely positioned with the most detailed and informative patient disease registries”, said David Kroin, Managing Director of Great Point Partners. “Corrona is uniquely positioned at the intersection of biopharmaceutical development and health care information technology with an emphasis on research and science, each of which is a core focus area for Great Point’s private equity efforts. This transaction will provide the company with the growth capital and resources necessary to realize Dr. Joel Kremer’s vision of a fully integrated real world evidence company.”

The equity investment from Great Point will fund growth in the company’s infrastructure in IT, epidemiology and biostatistical support, pharmacoeconomics, and project management capabilities and will also fund the company’s expansion to other autoimmune and chronic diseases.  Great Point made the investment through its second fund which closed above target in December 2013 with $215 million of capital commitments.

Great Point Partners has approximately $750 million of equity capital under management. Since founding in 2003, the firm has provided growth equity, recapitalization and management buyout financing to more than 100 health care companies. Currently the firm manages capital in both public equity and private equity funds. Both the private and public funds invest across all sectors of the health care industry including biotechnology and life sciences, consumer health, generic drugs, health care services, information technology, insurance, medical devices, specialty pharmaceuticals and workers compensation. Great Point Partners is located in Greenwich, CT (www.gppfunds.com).

“Through the partnership with Great Point Partners, Corrona will realize its full potential to lead the nation in reporting clinical results which make a difference to patients, physicians, and society. We are pleased and enormously flattered that Great Point has chosen to invest in Corrona,” said Dr. Joel Kremer, Founder and CMO of Corrona.  “Working together with Great Point, Corrona will be able to explore and achieve its full potential to become a world leader in health care research and post-market approval drug surveillance for chronic diseases.”

© 2014 PEPD • Private Equity’s Leading News Magazine • 4-22-14

HKW Closes Fourth Fund Above Target

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Hammond, Kennedy, Whitney & Company (HKW) has completed the final closing of limited partner commitments for its latest private equity fund, HKW Capital Partners IV (Fund IV), with $316 million of capital commitments, exceeding its $300 million target.

“We appreciate the support from both our existing investor base and from several new institutional investors,” said HKW Chairman Glenn Scolnik.  The majority of Fund IV commitments, 81%, are from institutional investors, including six insurance companies, four fund of funds, two state pension funds, and one university endowment.

Fund IV will invest primarily in lower middle-market companies headquartered in North America, consistent with the investment strategy HKW has used since it made its first control equity investment in 1983. Sectors of interest include energy services, infrastructure, and medical products.

“We will continue with our focused investment strategy of partnering with motivated management teams to grow companies for the benefit of all of our stakeholders.  The fact that we were able to exceed our fundraising target is a great indication of the support for our strategy,” said HKW CEO Jeff Wood.

HKW has already completed four investments for the new fund as follows: Brant Instore – a  provider of marketing services to retailers (www.brantinstore.com); Mobile Tech – a provider of loss prevention and merchandising services to the mobile technology industry (www.mobiletechinc.com); Specialized Desanders –  a provider of de-sanding services for the oil and gas industry (www.specializedtech.ca); and EnerSafe – a provider of safety equipment and services to the oil and gas industry (www.enersafellc.com).

HKW’s previous private equity funds were HKW Capital Partners II, a $100 million fund which acquired 14 companies, and HKW Capital Partners III, a $255 million fund which also acquired 14 companies.

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 49 add-on acquisitions. The firm was founded in 1903 and is headquartered in Indianapolis with an additional office in New York (www.hkwinc.com).

© 2014 PEPD • Private Equity’s Leading News Magazine • 4-22-14

Mansa Gets Greenlight from SBA

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Mansa Capital Management has received a Green Light letter from the US Small Business Administration (SBA) to continue its application process to obtain a license to form and operate a Small Business Investment Company (SBIC).

Green Light letters are issued by the SBA to enable firms to move toward application for licensure of a fund it manages as a Small Business Investment Corporation. The receipt of a Green Light letter does not obligate the SBA to issue a Small Business Investment Corporation license.

“While there are certainly no assurances, being Green-Lighted has some immediate advantages,” said Mansa Capital Managing Partner and Chief Investment Officer, Ruben King-Shaw Jr.  “For instance, Mansa Capital will be added to the SBA’s Green Light list which verifies that Mansa Capital has completed the first phase of the SBA’s rigorous due-diligence process.”

Mansa Capital invests in companies active in the health care services and health care technology sectors that have enterprise values up to $150 million.  Mansa focuses on companies as they prepare for expansion, acquisition, privatization or IPO. The firm is headquartered in Boston with offices in New York, Miami, and Dallas (www.MansaCapital.com).

“As we continue to pursue licensure, the SBA’s Green Light verifies for interested parties that we have met the Federal Government’s rigorous standards set for the fund’s management team, investment strategy, track record, administrative capabilities and prospects for long-term success. We’re pleased to have cleared the first hurdle and look forward to completing the rest of the application process in the next few months,” said James Renna, a Mansa Partner who also leads the firm’s operations and advisory group.

“We hope to leverage this heightened profile to become more visible among a broader range of prospective portfolio companies with which we might share our healthcare industry and policy expertise,” said Mansa Partner & COO, Jason Torres.

© 2014 PEPD • Private Equity’s Leading News Magazine • 4-22-14