Archives for August 13, 2014

Thoma Bravo Invests in SailPoint

by

Thoma Bravo has agreed to make a significant equity investment in SailPoint, a provider of identity and access management (IAM) services.  SailPoint recently reported record operating profits and is the fastest growing IAM company in North America, according to the latest Deloitte Technology Fast 500.  The transaction is expected to close in the third quarter of 2014.

“Thoma Bravo is very excited to partner with the SailPoint team to propel the company into its next stage of growth,” said Seth Boro, a managing partner at Thoma Bravo. “We believe that the combination of SailPoint’s proven innovation and leadership in the IAM market and Thoma Bravo’s expertise in Enterprise Security will further strengthen SailPoint’s status as the market leader.”

SailPoint products and services are used to deliver and manage user access from any device to data and applications residing in the datacenter, on mobile devices, and in the cloud. The company’s product portfolio offers a set of integrated services including identity governance, provisioning, and access management. The company was founded in 2005 and is based in Austin, TX (www.sailpoint.com).

 “The complexities of identity and access management have created significant security concerns within the enterprise. SailPoint’s platform was purposely built to specifically address these concerns, making it uniquely positioned in the IAM marketplace,” said Chip Virnig, a Vice President at Thoma Bravo.

Thoma Bravo provides equity and strategic support to management teams building growing companies. The firm originated the concept of industry consolidation investing, which seeks to create value through the strategic use of acquisitions to accelerate business growth.  Thoma Bravo currently manages approximately $7.5 billion of equity capital. The firm was founded in 1981 and has offices in Chicago and San Francisco (www.thomabravo.com).

Foros, a boutique strategic and M&A advisory firm based in New York (www.forosgroup.com), acted as financial advisor to SailPoint on this transaction.

“Today’s news represents a significant inflection point for SailPoint as we work toward our company mission of becoming ‘Identity Inc.’ for the enterprise,” said Mark McClain, founder and CEO of SailPoint. “As the market leader, and given our rapid growth, it’s critical to the success of SailPoint – as well as our customers and partners – to continue scaling our company. Partnering with Thoma Bravo, which has significant experience with high growth companies in the enterprise software arena, will help us to continue our aggressive growth while maintaining our unparalleled customer satisfaction levels.”

2014 PEPD • Private Equity’s Leading News Magazine • 8-13-14

Charter Oak and Peninsula Acquire Seaboard Folding Box

by

Charter Oak Equity and Peninsula Capital Partners have acquired a controlling interest in Seaboard Folding Box Company.

Seaboard Folding Box is a maker of primary and secondary paperboard boxes for the specialty food, pharmacy and hardware markets. The company is based northwest of Boston in Fitchburg, MA (www.seaboardfoldingbox.com).

“We are very excited to add Seaboard to the Charter Oak Equity portfolio of companies,” said Paul Roughan, Managing Partner of Charter Oak. “Seaboard has a solid track record of steady growth with strong margins and has developed an outstanding reputation among its customers. The company is an excellent platform for new acquisitions. We are immediately initiating a search for add-ons that can broaden Seaboard’s geographic presence and bring in new customers.”

Charter Oak Equity invests in niche manufacturing, packaging, medical products & services, specialty chemicals, consumer products and financial services companies ranging in size from start up to $200 million of enterprise value. Since founding in 1992, the firm has invested over $500 million in 30 portfolio companies and completed more than 50 acquisitions. Charter Oak is based in Westport, CT (www.charteroak-equity.com).

Allen Rabinow, the third generation owner and CEO of Seaboard Folding Box, will continue to manage the company and maintain a significant ownership position.  “We are thrilled to partner with Charter Oak and Peninsula,” said Mr. Rabinow. “Their additional capital along with their financial and operating experience will help us continue to expand the business through investment and strategic acquisitions.

“The combination of Mr. Rabinow’s executive talent, the company’s impressive financial performance and Charter Oak’s operational capabilities made this an attractive opportunity for Peninsula. We believe the company will benefit greatly from the additional capital and operational resources Peninsula Capital and Charter Oak collectively offer, and we look forward to supporting the future growth of Seaboard in both capacities over the coming years” said James Illikman, Partner at Peninsula Capital.

Peninsula Capital Partners provides from $5 million to $40 million in subordinated debt and equity capital to companies with $10 million to $100 million in revenue.  Peninsula invests across a range of industries but has specific interest in aerospace, manufacturing, information technology, industrial and professional services, consumer products, retail, food and distribution.  Since 1995, Peninsula has raised and managed approximately $1.2 billion of capital through five committed funds and is currently investing its fifth fund with total capital commitments of approximately $390 million. The firm was founded in 1995 and is based in Detroit (www.peninsulafunds.com).

Charter Oak, Peninsula Capital Partners and Mr. Rabinow provided the equity for the transaction. Peninsula also provided the mezzanine debt. Fifth Third Bank provided the senior debt.

2014 PEPD • Private Equity’s Leading News Magazine • 8-13-14

Graham Partners Exits Strata

by

Graham Partners has completed the sale of portfolio companies Strata Products Worldwide and Strata Proximity Systems, makers of mining safety equipment and mining safety technology.

Strata Products Worldwide, acquired by Graham in November 2010, is a provider of safety products and services to major mining companies operating in the US, Europe, Australia, South Africa, New Zealand, Papua New Guinea, China, Russia, South America, and Mexico.  Strata’s products includes underground safety refuge chambers, wireless tracking and communication devices for extreme environments, underground secondary roof support systems, and mine construction services.  Strata Proximity Systems is a manufacturer of proximity detection and collision avoidance systems for mining applications and was acquired in 2011 by Graham to bolster Strata’s electronic safety product platform.  Both Strata Products Worldwide and Strata Proximity Systems (SPS) are based in the Atlanta suburb of Sandy Springs (www.strataworldwide.com).

During Graham’s four year ownership term the EBITDA of Strata tripled.  The increase was the result of the commercialization of new products, developing and marketing advancements to existing products, and international expansion.

“Our investment thesis focused on the growth opportunities that were available for Strata to expand its product offerings and subsequently penetrate new global markets. We worked closely with Strata and SPS to successfully develop their market capabilities,” said Chris Lawler, Managing Principal at Graham Partners.  “Many of the achievements during this partnership can be attributed to Strata’s strong management team, and we wish them continued success under new ownership.”

Graham Partners seeks to acquire companies with EBITDA between $5 million and $50 million, and will invest in smaller companies as add-on acquisitions to existing portfolio companies. The firm is sponsored by the Graham Group, an industrial and investment concern with interests in plastics, packaging, machinery, building products and outsourced manufacturing. Graham Partners was founded in 1988 and is headquartered in Philadelphia (www.grahampartners.net).

“Our partnership with Graham has been very rewarding, both professionally and personally. As a significant equity stakeholder in Strata and SPS alongside of Graham, I am pleased to share in this successful investment outcome,” said Rory Paton-Ash, retiring CEO of Strata.  “I have enjoyed overseeing Strata become the leading global company delivering technology-enabled safety products to the underground mining industry. The company is uniquely positioned for strong long-term growth and continued market leadership.”

2014 PEPD • Private Equity’s Leading News Magazine • 8-13-14

Abacus Closes Senior Financing for LuLu’s

by

Abacus Finance Group served as Administrative Agent and Sole Lead Arranger for senior secured credit facilities to support the leveraged recapitalization of LuLu’s Fashion Lounge by H.I.G. Growth Partners.  In addition to providing the financing, Abacus made an equity co-investment in LuLu’s.

LuLu’s is an online retailer of young women’s apparel, shoes and accessories. The company is headquartered in north of Sacramento in Chico, CA (www.lulus.com).

Abacus targets debt financing opportunities of up to $50 million with a typical hold size ranging from $10 million to $25 million. The companies that Abacus finances generally have EBITDAs between $3 million and $15 million. Abacus was formed in June 2011 and is an affiliate of New York Private Bank & Trust, the holding company for Emigrant Bank, founded in 1850, the largest privately held bank in America with approximately $10 billion in assets. Abacus is based in New York (www.abacusfinance.com).  Abacus team members involved in the transaction included Sean McKeever and Eric Petersen.

“H.I.G.’s investment strategy matches up well with our focus on smaller middle market companies,” said Tim Clifford, President and CEO of Abacus Finance. “They brought us a terrific company, and we were so impressed by the business model and the management team that we chose to make an equity co-investment. As Evan mentioned, the important aspects of the financing from his perspective were our industry knowledge and the structuring flexibility we offered – those along with being able to provide certainty of close are key ingredients of what we call our Total Partnership Approach.”

H.I.G. Growth Partners is the growth capital investment affiliate of H.I.G. Capital. H.I.G. Growth Partners makes majority and minority equity investments of $5 million to $30 million in growth-oriented businesses with revenues of $10 million to $100 million. The firm invests across all industries but focuses on certain high-growth sectors where the team has in-house expertise such as healthcare, technology, internet & media, consumer products and technology-enabled financial and business services (www.higgrowth.com).

RLJ Credit (www.rljcredit.com) provided mezzanine financing in support of the acquisition of LuLu’s by H.I.G. Growth Partners.

2014 PEPD • Private Equity’s Leading News Magazine • 8-13-14

Platte River Teams Up, Launches First River Energy

by

Platte River Equity has partnered with midstream energy industry executives, Johan Thematt, Jim Imbler and Chris Philpott, to form First River Energy, LLC. Platte River will invest capital out of its third fund, Platte River Equity III, LP, to support First River.

“On behalf of the management team at First River, we are thrilled to partner with Platte River, a private equity firm distinguished by its expertise in the energy services industry,” said Mr. Thematt.  “Platte River has been actively evaluating opportunities in the midstream space.  With our partnership, First River is well positioned to benefit from the firm’s deep domain knowledge and expertise.”

First River’s objective is to acquire and develop midstream assets for the gathering of crude oil, condensates, natural gas liquids and other related products, and provide marketing services for the small independent crude oil producers.

“A unique opportunity exists to build a significant midstream company focused on an important, yet underserved, segment of the crude oil production market.  Platte River’s partnership with First River is a reflection of our outlook for investing in the midstream energy sector.  We are actively seeking acquisitions and believe there will continue to be a number of compelling investment opportunities in the market,” said Platte River Managing Director, Peter Calamari.

First River’s founders and management team bring significant experience as key managers of private and publicly traded midstream entities.  Collectively, the team has helped close over $1 billion in midstream acquisitions in the last year through past leadership roles at midstream energy companies.

Platte River Equity makes equity investments of $10 million to $50 million in lower middle market companies with enterprise values generally between $20 million and $250 million. The firm focuses on investing in the aerospace and transportation; energy and industrial services; and chemicals, metals and industrial minerals sectors. Platte River Equity manages funds with committed capital of approximately $700 million and is based in Denver (www.platteriverequity.com).

2014 PEPD • Private Equity’s Leading News Magazine • 8-13-14

Excellere Continues Staff Build

by

Excellere Partners has added Mike Vieth to its team as a new Associate. Mr. Vieth is the fifth addition to the Excellere Partners professional staff in the last ten months.

Before joining Excellere, Mr. Vieth worked as an Associate at Maranon Capital where he was responsible for evaluating and executing investments across a variety of industries.  His past experience also includes two years as an analyst with Harris Williams & Co.  Mr. Vieth earned an MBA from the University of Chicago and a Bachelors of Science in Business from the University of Minnesota.

Excellere Partners invests in middle-market companies with revenues ranging from $20 million to $150 million. Sectors of interest include healthcare; specialty foods; industrial technology and services; business services; and education and training. The firm has $737 million of capital under management and is based in Denver, CO (www.excellerepartners.com).

2014 PEPD • Private Equity’s Leading News Magazine • 8-13-14