Archives for June 5, 2014

Moelis Acquires PATS Aircraft Systems

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Moelis Capital Partners has acquired PATS Aircraft Systems, a provider of aircraft services and components to original equipment manufacturers and airline operators.

“We are very excited about this partnership which we are confident will help us grow and better meet the needs of our customers,” said John Martin, President and CEO of PATS Aircraft Systems. “There is tremendous opportunity ahead and with MCP we have found a partner that is as passionate about the future as we are and excited to support the company in achieving its goals.” Mr. Martin will continue in his roles as President and CEO and the other members of the PATS management team will remain in their current positions.

PATS Aircraft Systems, is a provider of an array of aircraft services, components and integrated systems to original equipment manufacturers, airline operators, ultra-high net worth individuals, governments and corporations worldwide.  PATS and its subsidiary Hollingsead International have provided auxiliary fuel systems and other integrated systems and specialty components to most aircraft OEMs and first tier aerospace industry suppliers. In addition, PATS is a leading service provider for Boeing Business Jets (BBJ) and other VVIP aircraft, performing maintenance, modification and VVIP interior completions. The company is headquartered in Georgetown, DE (www.patsaircraft.com).

“We were impressed by PATS’ strong leadership team, successful track record, heritage of innovation, blue-chip customer base and dynamic culture. The company has built a reputation for providing high-quality service to very demanding customers, employing a hands-on management style with an emphasis on meeting the customer’s expectation no matter what it takes. We’re particularly excited by the company’s growth prospects and we look forward to working with this talented management team,” said Jim Johnston, a Partner at MCP.

Moelis Capital Partners (MCP) is a middle market private equity firm founded in 2007 in connection with the formation of Moelis & Company, an independent investment bank. Moelis Capital Partners manages $870 million of committed capital and specializes in traditional private equity investments in the middle market. The firm is based in New York (www.moeliscapitalpartners.com).

JetCapital and Propeller Investments served as buy-side advisors to MCP on the transaction, and Parr Brown Gee & Loveless served as counsel to MCP. PNC Bank, in continuance of its relationship with PATS, provided the senior debt financing.

2014 PEPD • Private Equity’s Leading News Magazine • 6-5-14

Trinity Hunt Sells C.J. Foods to J.H. Whitney

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Trinity Hunt Partners has sold its portfolio company C.J. Foods, a specialty manufacturer of super-premium dog and cat food, to J.H. Whitney Capital Partners.  Trinity Hunt acquired C.J. Foods in partnership with the company’s management in 2009.

C.J. Foods is a custom manufacturer of super-premium dry pet foods for dogs, cats, and other household pets.  The company offers services that include product consulting and development, materials management, customized production and packaging, quality control, and managed inventory. C.J. Foods was founded in 1985 and is headquartered in Bern, KS (www.extrudedpetfood.com).

During the course of its ownership, Trinity Hunt Partners (THP) funded a $20 million plant expansion and numerous capital improvement projects, which resulted in a doubling of C.J. Foods’ capacity.  Additionally, the firm implemented a management stock option program and a new employee safety program. By the end of 2011, the company was posting record revenues and profits, with the increased capacity already spoken for by existing and new customers – ensuring continued growth in the future.  During THP’s ownership, C.J. Foods doubled its EBITDA and tripled its enterprise value.

“In Trinity Hunt, we found a true partner, one that shared our values, promoted the interests of our employees, and encouraged our uncompromising commitment to quality,” said Tod Morgan, Chief Executive Officer of C.J. Foods. “We would not be where we are today without Trinity Hunt’s strategic guidance and their investment in time and capital over the past four years. Trinity Hunt was critical to our success.”

“C.J. Foods has built its reputation on unwavering food quality and safety and has a long-tenured history with some of the fastest growing premium pet food brands in the country,” said Will Bixby, a THP Partner. “I believe that Tod Morgan and his management team are the best co-pack operators in the premium pet food industry, and I have full confidence in their ability to continue the company’s strong growth well into the future.”

Trinity Hunt typically invests in established companies that have EBITDAs between $3 million and $15 million and that are valued between $10 million to $150 million. The firm considers investment opportunities across a range of industries, including industrial products and services, business services and healthcare services. Trinity Hunt is based in Dallas, TX (www.trinityhunt.com).

Trinity Hunt Partners was advised by Harris Williams & Co.

2014 PEPD • Private Equity’s Leading News Magazine • 6-5-14

Sun Capital Partners Exits Emerald Performance Materials

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Sun Capital Partners has signed an agreement to sell its investment in Emerald Performance Materials, a producer and marketer of specialty chemicals for niche consumer and industrial end-markets, to American Securities. Sun Capital Partners first invested in the company in May 2006.  The transaction is expected to close in the third quarter of 2014.

Emerald Performance Materials serves a range of end markets such as flavors & fragrances, food & beverage, personal and household care, composites, structural adhesives, coatings, and flooring, among others. The company’s products enable end users to make goods that perform better through a variety of applications, such as adding color to paint and cosmetics, adding longevity to tires, imparting strength to adhesives and composites, providing scents to perfumes and soaps, and preserving soft drinks.  Emerald has seven manufacturing operations and approximately 600 employees.  The company is based in Cuyahoga Falls, OH (www.emeraldmaterials.com).

Emerald was created from the divestiture of six separate chemicals businesses by a corporate parent. Since the acquisition by Sun Capital, a standalone infrastructure was put in place and manufacturing assets were reconfigured to optimize production capacity and focus on higher margin products. These efforts enabled Emerald to extend its product breadth and geographic reach through both organic growth and a series of strategic add-on acquisitions including CVC Specialty Chemicals and DSM Special Products.

Significant investments in new plant equipment have enabled the company to expand capacity at its Rotterdam and Kalama, WA sites in order to meet increased customer demand. Refocusing on higher margin specialty products and a commitment to investment in research and development has led to an expanded product offering with more than 50 new products added to Emerald’s portfolio in recent years.

As a result of these efforts, Emerald has seen a dramatic improvement in profitability, achieving more than a three-fold increase in EBITDA while owned by a Sun Capital. Notably, the company’s EBITDA growth was uninterrupted by the global economic recession of late 2008 and early 2009, despite the challenging market conditions.

“We’re extremely proud that by applying our deep experience in building corporate carve-outs into market leaders, Emerald has transformed into one of the top performers in the industry,” said Marc Leder, Co-CEO at Sun Capital. “After completing a series of strategic acquisitions, making significant investments in new equipment, and expanding the company’s high-margin product portfolio, we’re confident Emerald is poised for continued success under its new owner.”

Sun Capital Partners is focused on leveraged buyouts, equity, debt, and other investments in companies that can benefit from its in-house operating professionals and experience. Sun Capital has invested in and managed more than 335 companies worldwide with combined sales in excess of $45 billion since the firm’s inception in 1995. Sun Capital has offices in Boca Raton, Los Angeles, and New York as well as affiliates with offices in London, Paris, Frankfurt, Luxembourg, Shanghai and Shenzhen (www.SunCapPart.com).

The sale of Emerald Performance Materials marks Sun Capital’s fifth exit of 2014. Last year the firm completed eight exits and two IPOs, leading to more than $1 billion in realizations for 2013 — a record for the firm.

2014 PEPD • Private Equity’s Leading News Magazine • 6-5-14

Wynnchurch Acquires MSC Brake Business

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Wolverine Advanced Materials, a portfolio company of Wynnchurch Capital, has acquired the original equipment and aftermarket brake business of Material Sciences Corporation, a division of New Star Metals.

“We are proud of our diverse portfolio of products – one that has grown with our acquisition of the global original equipment and aftermarket brake business of MSC,” said Grant Beard, Chairman, CEO, and President of Wolverine. “The deal expands our capabilities in the Brake segment. This, coupled with our strong position in the Sealing industry, will strengthen Wolverine as a company. We look forward to continuously working with our long-term partners, and providing them with an extended portfolio of high-quality, high-performance products.”

Wolverine Advanced Materials is a developer and manufacturer of high-performance materials. The company’s core competency is in performance-critical, specialty elastomer-coated metals that offer damping and seal-ability solutions in the automotive brake, noise-vibration-harshness (NVH), and sealing industries. Wolverine has offices in Virginia, Florida, Michigan, Germany, Japan, China, Brazil, and India and employs approximately 500 people worldwide, with global headquarters in the Detroit suburb of Dearborn (www.wamglobal.com).

Wynnchurch Capital makes investments of $10 million to $90 million in middle-market companies that have revenues of $5 million to $500 million. Sectors of interest include niche manufacturing, transportation & logistics, business services, value-added distribution, energy and power services, general industrials, and metals & mining. Wynnchurch manages a number of private equity funds with capital under management in excess of $1 billion. The firm was founded in 1999 and is located in the Chicago suburb of Rosemont with additional offices in Detroit and Toronto (www.wynnchurch.com).

2014 PEPD • Private Equity’s Leading News Magazine • 6-5-14

Wasserstein & Co. to Acquire ALM Media

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Wasserstein & Co. has entered into an agreement to acquire ALM Media, a portfolio company of Apax Partners and the Royal Bank of Scotland, for a reported $417 million.  Ontario Pension Board, Pantheon, the Honeywell pension, and HighVista Strategies are co-investing in the transaction alongside Wasserstein.  The transaction is expected to close in the third quarter of 2014.

ALM Media is an integrated media company and a provider of specialized business news, research and information, focused primarily on the legal and commercial real estate sectors.  ALM’s portfolio of over 350 print and digital publications – which include The New York Law Journal, The American Lawyer, Corporate Counsel, Law.com, and The National Law Journal –receives more than 6.5 million page views per month. The company has nearly 700 employees across 16 offices worldwide and is headquartered in New York (www.alm.com).

Wasserstein & Co. previously owned ALM and sold the company to Incisive Media in 2007 for $630 million.  “We are delighted to have the opportunity to own ALM again and look forward to working with ALM’s experienced management team to strengthen and unify its media brands and expand into value-added digital subscription products and services,” said Michael Struble, Managing Director of Wasserstein & Co.

Wasserstein & Co. is focused primarily on leveraged buyout investments and related investment activities in the media, consumer products and water equipment and services industries. The firm has offices in New York and Los Angeles. The investment in Recorded Books was made through the firm’s third investment fund, Wasserstein Partners III (www.wasserco.com).

“ALM’s publications and digital products are the best in the industry. They are the market leaders, and invaluable to US legal professionals. We are excited about the opportunity to work with ALM again to grow its remarkable print and digital products and trade shows,” said Anup Bagaria, Co-Managing Partner of Wasserstein & Co.

Financing for the transaction will be provided by Macquarie Capital (USA).  Jefferies acted as financial advisor to the company, Apax Funds, and RBS.

2014 PEPD • Private Equity’s Leading News Magazine • 6-5-14

Fulcrum Invests in Weatherhaven

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Fulcrum Capital Partners has made a growth capital investment in Weatherhaven Global Resources, a provider of shelters for military and commercial applications. The investment was funded by Fulcrum Capital’s Private Equity Fund IV and marks the eleventh investment for that fund.

Weatherhaven Global Resources is a provider of shelters for military and commercial applications with a focus on remote, highly specialized and re-deployable shelter systems. The company’s services range from custom shelter design to engineering, supply chain, production, installation and aftermarket support services. Weatherhaven is headquartered in Burnaby, BC (www.weatherhaven.com).

Fulcrum Capital Partners manages over C$500 million of capital and invests both equity and subordinated debt in companies with revenues of C$10 million to C$250 million. Sectors of interest include services, manufacturing, consumer products, distribution, food and retail. The firm has offices in Vancouver and Toronto (www.fulcrumcapital.ca).

2014 PEPD • Private Equity’s Leading News Magazine • 6-5-14

Shore Capital Partners Closes Oversubscribed Fund I

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Shore Capital Partners has completed fundraising for Shore Capital Partners Fund I. The new fund was substantially oversubscribed and closed with $112.5 million of committed capital.  Investors in Fund I include pension funds, financial institutions, fund of funds and family offices.

“We are very pleased with the reception Shore Capital Partners Fund I received from such a highly respected group of institutional investors,” said Justin Ishbia, Founder and Managing Partner of Shore Capital Partners. “This is an important milestone for Shore and we believe the interest shown by investors validates our strategy to invest in microcap healthcare companies that can benefit from our operational and financial support.”

Shore’s principals have been investing together since 2009, completing 14 acquisitions across five platforms. Prior to founding Shore, Justin Ishbia worked at Valor Equity Partners and previously was an attorney in the private equity group at Kirkland Ellis. Ryan Kelley worked as an investment professional at Water Street Healthcare Partners and previously in the healthcare investment banking group at Bank of America. Michael Cooper was an investment professional at Wind Point Partners and previously at UBS Investment Bank. John Hennegan worked at Henry Crown & Company and previously at Citigroup in their investment bank. Don Pierce joined the team in the fall of 2013 from Baxter International and worked previously at RoundTable Healthcare Partners and UBS Investment Bank.  Shore has also cultivated a roster of experienced healthcare Operating Partners to assist in deal sourcing, due diligence, and portfolio company management.

Shore Capital Partners invests in lower middle market healthcare related companies that have $5 million to $50 million of revenue and $1 million to $5 million of EBITDA. Shore targets equity commitments of $10 million to $15 million per platform.  Healthcare sectors of particular interest include behavioral health; healthcare staffing; infusion therapy; laboratory products & distribution; laboratory services; outpatient rehab therapy; urgent care; veterinary services; pharmaceutical services and contract research.  Shore was founded in 2009 and is based in Chicago (www.shorecp.com).

2014 PEPD • Private Equity’s Leading News Magazine • 6-5-14

Avante Backs Rotunda Buy of Amware Logistics Services

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Avante Mezzanine Partners has provided subordinated debt and an equity co-investment to support the buyout of Amware Logistics Services by Rotunda Capital Partners.

Amware Logistics Services is a provider of third-party warehousing and fulfillment services to the following sectors: automotive aftermarket, hazardous & non hazardous chemicals, food grade products, industrial & construction materials, lumber, pulp & paper, and retail & consumer goods. Services include fulfillment, warehousing, transportation, and transloading.  Amware operates over 2 million square feet of warehouse space through nine facilities located across the United States and Canada. The company is headquartered in Eagle, CO (www.amwarelogistics.com).

“Amware is Avante’s fourth investment in the last year supporting independent sponsors and we are extremely excited to invest with a team as strong and as successful in the logistics industry as Rotunda Capital,” said Jeri Harman, Founder and Partner of Avante.

Avante Mezzanine Partners provides unitranche/one-stop debt, mezzanine, and minority equity investments of $5 million to $20 million to sponsored and non-sponsored companies with EBITDAs from $3 million to $15 million. Sectors of interest include aerospace & defense; business services; consumer products; distribution; education; healthcare & life sciences; industrial manufacturing; security products & services; software & IT services; and specialty chemicals & coatings. Avante Mezzanine Partners has offices in Los Angeles and Boston (www.avantemezzanine.com).

“Avante was an excellent partner for Amware and Rotunda,” said John Fruehwirth, Managing Partner of Rotunda Capital. “Avante’s responsiveness and flexible debt and equity capital were key to achieving a timely close.”  Corey Whisner, a Partner of Rotunda Capital added, “We appreciated Avante’s value-added, collaborative approach during due diligence and are thrilled to have their support as we invest in Amware to facilitate its next stage of growth.”

“Rotunda, via its industry expertise and operating executive network, is perfectly suited to assist management in continuing its track record of growth.  We are thrilled to be an investor in the company and support Rotunda and management’s growth plans,” said Paul Hayama, Principal of Avante.

Rotunda Capital invests in businesses with enterprise values of $5 million to $100 million. Sectors of interest include specialty finance, logistics and distribution, government and business services. Since founding in 2009, Rotunda Capital has completed seven platform investments and realized two exits. The firm has offices in Washington, DC and Chicago (www.rotundacapital.com).

2014 PEPD • Private Equity’s Leading News Magazine • 6-5-14

Baird Capital Hires Michael Bernstein as New Partner

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Michael Bernstein has rejoined Baird Capital, the direct private investment arm of Robert W. Baird & Co., and will be a Partner in its US Private Equity group.  Mr. Bernstein will focus on investment opportunities in the healthcare sector and will be based in Chicago.

Mr. Bernstein has nearly 30 years of operational and investment experience in the healthcare industry, including several executive management roles. He first joined Baird Capital in 2008 as an Executive-in-Residence, and was soon appointed President and CEO of Baird Capital portfolio company Medical Education Technologie (METI). During his time at METI, Mr. Bernstein helped improve business performance and negotiated the sale of the company to CAE, a provider of simulated education services. He then became President of CAE Healthcare, where he led the integration of METI, restructured the business and drove efficiency initiatives to improve profitability.

“We are very pleased to welcome Mike back to our team,” said Gordon Pan, Managing Partner of Baird Capital. “His proven ability to drive value in the companies he works with makes him an excellent addition to our healthcare platform.”

Mr. Bernstein’s prior executive experience includes serving as CEO of Leprechaun, an outsource data management business focused on Risk Adjustment data mining for Medicare HMOs. He also previously served as President and CEO of Innovative Health Strategies, President and COO of the former Cobalt Corporation and Executive Vice President of the University of Wisconsin Medical Foundation.

“Baird Capital’s healthcare platform benefits from a strong global network of experts,” said Mr. Bernstein. “I am excited to be back with Baird Capital in this new role and look forward to working with the healthcare team to identify the best investment opportunities for our portfolio.”

Baird Capital invests in lower middle-market companies in the manufactured products, healthcare and business services sectors. The firm invests from $15 million to $35 million in companies with enterprise values of $25 million to $125 million and EBITDAs greater than $5 million. Baird Capital was founded in 1989 and is based in Chicago (www.bairdcapital.com).

2014 PEPD • Private Equity’s Leading News Magazine • 6-5-14