May 15, 2014
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Archives for May 15, 2014

Water Street Invests in Orgentec Diagnostika

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organtec nf1Water Street Healthcare Partners has invested in Orgentec Diagnostika, a specialty diagnostics company.  Water Street has committed equity to both acquire a majority position in Orgentec and invest in future acquisitions.

Orgentec specializes in diagnostic assays for autoimmune and infectious diseases. It offers a portfolio of more than 300 tests, primarily enzyme-linked immunosorbent assays (ELISA), that help diagnose rheumatology, thrombosis and gastroenterology disorders, as well as infectious diseases. It also offers an automated instrument and associated test kits that enable laboratories to complete multiple assays and deliver faster results than traditional ELISA tests. The company was founded in 1988 and is headquartered in Mainz, Germany (www.orgentec.com).

The investment in Orgentec expands Water Street’s presence in the specialty diagnostics sector, particularly in Europe and emerging markets. Scott Garrett, former chairman and CEO of Beckman Coulter and senior operating partner with Water Street, will serve as chairman of Orgentec.

“I’m excited to partner with Water Street to expand Orgentec into new areas of testing and increase our presence in emerging markets. Water Street has incredibly deep knowledge and extensive relationships in our industry,” said Dr. Wigbert Berg, who co-founded Orgentec in 1988.  “Its team has worked closely with us to create a plan that supports our goal of thoughtfully growing Orgentec into a global leader that will bring greater value to our customers and employees.”

Dr. Berg will maintain an ownership position in Orgentec and serve on the company’s board of directors. He and Water Street have appointed Werner Hofacher, an executive with more than 30 years of experience in the diagnostics industry, to serve as CEO. Mr. Hofacher most recently led European operations for Beckman Coulter, and previously held leadership positions at Baxter and Dade Behring.

“It is an honor to be selected by Water Street and Dr. Berg to build on Orgentec’s history of success. For more than 25 years, the company has led the industry in developing new tests for complex diseases that were previously difficult to diagnose,” said Mr. Hofacher. “With Water Street’s support, we have a unique opportunity to expand Orgentec’s global position and to grow its portfolio of tests in order to help providers detect rare conditions and positively impact millions of lives.”

Water Street Healthcare Partners targets investments ranging from $50 million to $500 million in four health care sectors: distribution, medical products, health care services, and pharmaceutical products and services. The firm has particular expertise in corporate divestitures from healthcare companies. Water Street has more than $1 billion of capital under management and is based in Chicago (www.waterstreet.com).

Orgentec is Water Street’s third investment in a European-based business and its second new transaction announced in the past six weeks. Last month, Water Street signed agreements to acquire and merge CHS Health Services and Take Care Employer Solutions, a subsidiary of Walgreens.

© 2014 PEPD • Private Equity’s Leading News Magazine • 5-15-14

Dubin Clark Acquires Kellstrom Defense

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kellstrom nf1The Merex Group, a portfolio company of Dubin Clark & Company, has acquired Kellstrom Defense Aerospace, a provider of aerospace logistics.  This is the fourth add-on acquisition for The Merex Group since being acquired by Dubin Clark in October 2011.

Kellstrom Defense provides aftermarket logistics and inventory support for a variety of defense derivative aircrafts. The company is headquartered in Miramar, FL (www.kellstrom.com).

The Merex Group is a provider of support services for US manufactured legacy defense platforms including aircraft, helicopters and their respective engines.  Supporting more than 35 armed forces worldwide that operate legacy defense platforms, Merex provides spares & components, repair & overhaul management, and project management of systems upgrades. The company is headquartered in Camarillo, CA (www.merexinc.com).

Michael Hompesch nf1“This transaction reaffirms the opportunity we see to drive consolidation and scale in the global defense aftermarket space. The opportunity to support a strong management team and well-positioned strategy continues to be embraced by our investor base,” said Michael Hompesch, a Partner at Dubin Clark.

GE Antares served as administrative agent on the senior secured credit facility used to support the acquisition of Kellstrom.  GE Capital Markets served as sole lead arranger and joint bookrunner on this facility.

“GE Antares is a valued business partner, bringing more than just capital,” said Mr. Hompesch.  “They also brought GE’s expertise in aerospace, helping us realize the opportunity we see to drive consolidation and scale in the global defense aftermarket space.”

Dubin Clark seeks to acquire manufacturing, value-added distribution, and service companies with $10 million to $100 million in revenues and at least $2 million of EBITDA. The firm was founded in 1984 and is based in Greenwich, CT (www.dubinclark.com). 

© 2014 PEPD • Private Equity’s Leading News Magazine • 5-15-14

AIP Acquires SERVA from Wexford Capital

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serva nf1American Industrial Partners has completed the acquisition of SG Holdings I, LLC (SERVA), a designer and manufacturer of fracking equipment, from Wexford Capital.

SERVA is a designer and manufacturer of fracking equipment, coiled tubing equipment, and well intervention and workover equipment.  The company’s products are sold primarily in the United States and to an increasing degree in Asia.  SERVA manufactures and distributes coiled tubing, cementer, blender, frack and hydration units at its three manufacturing facilities in Tulsa (OK), Duncan (OK) and Calgary (Canada), and at its distribution facility located in Wichita Falls (TX).  The company currently has 282 full-time employees.  In addition to its North American operations, SERVA has established joint ventures in two Chinese businesses: SJS which produces pumps for fracking related equipment, fluid-end replacement parts, cementing units, data vans, and downhole tools; and SDS which produces downhole cementing tools. The company was founded in 1991 and is headquartered in Tulsa (www.servagroup.com).

“We believe SERVA is currently well positioned to participate in a recovery from what has been a cyclical low point of fracking equipment capital spending,” said Constantinos Coutifaris of AIP.  “The company’s leading edge line of products allows SERVA to compete with differentiated offerings in many important end markets.”

American Industrial Partners invests in North American headquartered industrial companies with sales ranging from $100 million to $500 million. The firm was founded in 1989 and is currently managing more than $1.1 billion in equity capital. American Industrial Partners was founded in 1989 and is based in New York (www.americanindustrial.com).

“We believe that AIP will be a value-added partner for the company going forward,” said Jorge Amador of AIP.  “In collaboration with management, we have developed a compelling operating agenda that will allow SERVA to continue to successfully meet oil and gas customer needs through engineering excellence and new product development.”

The seller of SERVA, Wexford Capital, is an investment advisor with over $4 billion of assets under management.  Sectors of interest include bankruptcy/distressed, energy/natural resources, real estate, technology/telecommunications and transportation.  The firm, which was founded in 1994, manages a series of hedge funds and private equity funds from its Greenwich, CT headquarters (www.wexford.com).

© 2014 PEPD • Private Equity’s Leading News Magazine • 5-15-14

SFW Capital Partners Invests in Essen BioScience

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essen bio nf1SFW Capital Partners has made an investment in Essen BioScience.  SFW is partnering in this investment with Essen’s co-founders, Kirk Schroeder and Brad Neagle, who serve as the current President and Vice-President of Operations and Engineering respectively, and its management team.

Essen BioScience is a provider of analytical instrumentation, software, reagents and services used in cell-based life science research.  Essen’s customers include biopharmaceutical companies including Merck, Genentech, Amgen, GlaxoSmithKline, AstraZeneca, Bristol-Myers Squibb and Pfizer, amongst others, and academic and research institutions including Harvard, MD Anderson, Yale, Cambridge, University of Michigan, Tokyo, Seoul National University, and Kyoto University. The company was founded in 1999 by Messrs. Schroeder and Neagle and is based near Detroit in Ann Arbor, MI with additional offices in the United Kingdom and Japan (www.essenbioscience.com).

“Essen exhibits the key characteristics that we look for in our investments in the analytical instrumentation market: high-value products and services, deep customer relationships, and significant opportunities for growth,” said Roger Freeman, SFW Partner, who will be a member of the Essen Board of Directors. “We look forward to partnering with Kirk, Brad and the Essen management team to build on and extend the success of the company.”

With SFW’s strategic support and resources, Essen plans on making investments to further expand its applications and assays, develop and introduce new products, and continue to enhance its sales, service and support capabilities.

“We are very pleased to be partnering with the SFW team, which is a well-known long-term investor and builder of analytical instrumentation businesses,” said Mr. Schroeder. “We are very proud of our current and historical accomplishments here at Essen, and this significant investment serves as a strong endorsement for our business model, growth strategy and future prospects.”

SFW focuses exclusively on analytical tools and related services companies, including providers of instrumentation, software, information and analytical services. SFW typically invests from $10 million to $75 million of equity in middle market companies that have up to $25 million in EBITDA. The firm has offices in Rye, NY and Hudson, OH (www.sfwcap.com).

© 2014 PEPD • Private Equity’s Leading News Magazine • 5-15-14

Arsenal Acquires Service Refrigeration

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service nf1Source Refrigeration & HVAC (Source), a portfolio company of Arsenal Capital Partners, has acquired Service Refrigeration, LLC. This is the fourth add-on acquisition for Source since being acquired by Arsenal in January 2007.

Service Refrigeration is a provider of refrigeration and HVAC services to grocery, commercial, and industrial clients throughout the state of Texas.  Services include maintenance programs, emergency repairs, new installations and remodels of mission-critical refrigeration and HVAC systems.  The company has over 150 full time employees in five service regions across Texas.  Service Refrigeration was founded in 1986 by current president W.L. “Butch” Edmonds Jr. and is based in Houston (www.servref.com).

Source Refrigeration & HVAC is a provider of commercial refrigeration and HVAC services to supermarket chains, many of the largest convenience store chains and leading telecom and industrial companies. With over 1200 employees and service locations nationally, Source designs, installs, services, maintains and optimizes mission-critical refrigeration & HVAC systems. The company is headquartered in Anaheim, CA (www.sourcerefrigeration.com).

The acquisition of Service Refrigeration builds on Source’s platform as a leading provider of commercial refrigeration and HVAC services in North America, serving the nation’s top supermarket chains, many of the largest convenience store chains, and leading telecom and industrial companies.

sal gagliardo nf1“Service Refrigeration is well-established in the Texas market for mission critical refrigeration and HVAC services and provides Source with complementary capabilities and expanded market coverage in the state. The acquisition of Service Refrigeration demonstrates our continued commitment to further expand and strengthen Source’s national presence and service offering,” said Sal Gagliardo, an Operating Partner at Arsenal Capital Partners.

Arsenal Capital Partners invests in middle-market specialty industrial and healthcare companies that have $50 million to $250 million in enterprise value. Industries of specific interest include specialty & fine chemicals; segments of healthcare; transportation and logistics; power generation; aerospace & defense; and process industry components and services. Arsenal has $1.7 billion of committed capital under management. The firm was founded in 2000 and has offices in New York and Shanghai (www.arsenalcapital.com).

“Service Refrigeration has built a solid reputation for performing with an impressive group of accounts,” said Brad Howard, President and Chief Executive Officer of Source. “We are excited to welcome their employees and their customers into the Source portfolio.  Our combined capabilities will provide a great platform for serving Texas.”

© 2014 PEPD • Private Equity’s Leading News Magazine • 5-15-14

Victory Park Capital Expands Leadership Team

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victory NFVictory Park Capital (VPC) has promoted two investment professionals in its Chicago office with the promotions to Principal of Derek Ferguson and Chad Peterson.

“The expansion of our leadership team reflects our initiative to build a strong foundation and more structured platform,” said Richard Levy, co-founder and managing partner of VPC. “These individuals’ contributions to the team are invaluable and their new roles will impact the development of our firm significantly as we continue to position for growth.”

ferguson nf2As a Principal, Mr. Ferguson will develop and maintain value creation initiatives and strategic alternatives for VPC’s investments. He will also manage the sourcing, analysis and execution of direct private debt and equity investments in the industrials, energy and natural resources and healthcare sectors for VPC. He will continue to serve as a member of the Board of Directors of VPC’s portfolio companies Enteris Biopharma and Surefire Industries.

Mr. Ferguson joined VPC in 2012. Previously, he was a Vice President with Maxim Partners, a private equity firm that concentrates on entrepreneurial companies in the lower middle market. He also held positions at private equity firms Wynnchurch Capital and Thoma Cressey Equity Partners, and in the M&A Investment Banking division of J.P. Morgan Securities.  Mr. Ferguson received a BS from the University of Illinois and an MBA from Northwestern University.

petersen nf1As a Principal, Mr. Peterson will develop and maintain value creation initiatives and strategic alternatives for VPC’s investments. He will also oversee the sourcing, analysis, execution and management of direct private debt and equity investments in the consumer, restaurant, gaming, lodging and leisure sectors for VPC. He will continue to serve as a member the Board of Directors of VPC’s portfolio company VPC Pizza Operating Corp. (DBA Giordano’s).

Mr. Peterson joined VPC in 2011. Previously, he worked at Qorval, a turnaround advisory and interim-management firm focusing on financial and operational improvements for middle-market companies. He also worked in the Special Situations Group at American Capital and held various financial advisory positions at Bridge Associates and Deloitte Consulting.  Mr. Peterson received a BS from Miami University of Ohio and an MBA from Northwestern University.

Victory Park Capital invests from $10 million to $50 million per transaction in small cap public companies and middle market private companies that typically generate less than $150 million in revenue and less than $30 million of EBITDA. The firm focuses on complex situations and seeks to build long term sustainable value in its companies. Victory Park was founded in 2007 and is based in Chicago with additional offices in Boston, New York and San Francisco (www.victoryparkcapital.com).

© 2014 PEPD • Private Equity’s Leading News Magazine • 5-15-14

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