Archives for August 21, 2014

High Street Acquires Applied Process

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High Street Capital has acquired Applied Process, a provider of metal heat treating services.  This acquisition represents High Street’s fourth platform investment for its fourth fund.

Applied Process is a provider of high value-added heat treating services.  The company’s heat treating service is differentiated by the use of Austempering, an isothermal heat treatment that when applied to ferrous materials produces a structure that is stronger and tougher than comparable structures produced with conventional heat treatments. Applied Process was founded in 1993 by John Keough and his family. The company is based just outside Detroit in Livonia, MI (www.AppliedProcess.com).

“High Street Capital is looking forward to working with the world-class leadership team and employees of Applied Process to continue the company’s mission to ‘grow the pie’ for Austempering,” said Dick McClain, a Principal at High Street Capital.

High Street Capital acquires, recapitalizes and provides growth capital to outsourced business services, value-added distribution and manufacturing companies that are located in the central US and have revenues from $10 million to $100 million. High Street Capital is based in Chicago (www.HighStreetCapital.com).

“Austempering offers our customers a cost effective way to obtain stronger, lighter and less expensive parts.  With High Street Capital as our new capital partner, we have the added resources to expand our capabilities, continue to improve upon our already industry-leading service, and to expand geographically,” said John Wagner, President of Applied Process.

“We are pleased that we have a strong partner in High Street Capital going forward.  My family and I will maintain a significant capital interest in the business. I will continue as a director and will be, as always, actively engaged in the growth of the business and the profitable conversion of components from one material/process combination to a better, faster, cheaper one,” said John Keough, the company’s founder.

2014 PEPD • Private Equity’s Leading News Magazine • 8-21-14

Graham Acquires Desser Tire & Rubber

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Graham Partners has made a majority investment in Desser Tire & Rubber Company and its affiliated companies; Aero Wheel & Brake Service Corporation and Cee Bailey’s Aircraft Plastics (collectively, “Desser”).

Desser is supplier of aircraft tires and tubes was well as other aviation products to customers in over 100 countries. The company also holds Federal Aviation Administration (FAA) and European Aviation Safety Agency (EASA) approvals for high speed aircraft tire retreading and wheel and brake services, and produces aviation transparencies (aircraft windshields, windscreens, canopies, windows, etc…) for aftermarket applications.  Desser has been family-owned and operated since 1920 and has been exclusively focused on aviation markets since 1985.  The company is headquartered near Los Angeles in Montebello, CA and has an additional warehouse in Memphis (www.desser.com).

Graham Partners has been proactively seeking to make investments in the aviation product aftermarket and, according to Graham Partners, the Desser transaction was sourced on a proprietary basis as a result of this sector focus coupled with Graham’s experience and relationships in the aerospace industry.  Graham Partners intends to leverage its operating resources and aviation products expertise to capitalize on Desser’s strong brand name and reputation. One of Graham’s strategic objectives is to expand Desser’s specialized aviation supplier capabilities by offering more products to its customer base.

“Desser is an established market leader with unparalleled name recognition among customers for aircraft tires and unique capabilities; we look forward to partnering with Desser’s management team to build upon Desser’s record of success as a specialized aviation product supplier,” said Chris Lawler, Managing Principal at Graham Partners.

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).

“After being a family-owned business for nearly 100 years, we believe Graham Partners will provide resources to facilitate Desser’s growth and deliver expertise that will allow us to achieve our vision for Desser’s future potential,” said Steve Chlavin, CEO of Desser.

2014 PEPD • Private Equity’s Leading News Magazine • 8-21-14

Longitude and NovaQuest Acquire California Cryobank

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California Cryobank has been acquired by Longitude Venture Partners and NovaQuest Capital Management. Equity for the transaction was provided by Longitude Venture Partners II, LP and NovaQuest Pharma Opportunities Fund III, LP. The transaction closed on August 19, 2014.

California Cryobank (CCB) is a provider of reproductive tissue donor services and storage and stem cell banking. The company provides a resource for frozen donor sperm and specialized reproductive services, including private egg and embryo storage services.  In addition, since 1997, CCB has provided stem cell services through its FamilyCord subsidiary, including both cord blood and cord tissue banking.  CCB operates throughout the United States, as well as Europe, South America, and Asia. The company is registered with the FDA, accredited by the AATB (American Association of Tissue Banks), licensed by the states of California and New York, and has three CLIA-certified clinical laboratories. The company was founded in 1977 by Dr. Charles Sims and Dr. Cappy Rothman and is headquartered in Los Angeles (www.cryobank.com).

Longitude Capital invests from $10 million to $30 million in companies active in the life sciences, medical device and biotechnology sectors. Longitude Capital has over $700 million in assets under management and most recently raised $385 million for its second fund, Longitude Venture Partners II, LP, in 2012.  The firm was founded in 2006 and has offices in Menlo Park, CA and Greenwich, CT (www.longitudecapital.com).

“CCB is a market-leading, high-growth and profitable company whose products represent the highest level of quality and customer service in major areas of medical need,” said Dr. Gregory Grunberg, Managing Director at Longitude, “We believe CCB’s senior management team has the vision and the operational strength to expand the company’s business and meet the growing needs of customers in the fertility and cellular therapy markets.”

NovaQuest Capital Management invests in companies active in the healthcare industry with a specific interest in biopharmaceuticals. The firm is based in Raleigh, NC (www.novaquest.com).

“NovaQuest is extremely pleased to begin its ownership relationship with CCB. In the four decades since its founding, CCB has become the leading global reproductive tissue services company, with unparalleled customer service and operating practices. We are excited to join CCB’s outstanding management to build on this solid foundation and expand both the scale and scope of CCB’s business,” said William Robb, Partner at NovaQuest.

Harris Williams & Co. (www.harriswilliams.com) acted as the exclusive advisor to California Cryobank. The transaction was led by Todd Morris, Andy Dixon, and Andrew Hewlett of Harris Williams & Co.’s Healthcare and Life Sciences Group.

“CCB is well positioned to capitalize on demographic and cultural trends driving demand for its services and to continue its strong track record of growth in partnership with Longitude and NovaQuest,” said Andy Dixon, a Director at Harris Williams.  “We expect to see additional growth and consolidation in the broader fertility markets.”

2014 PEPD • Private Equity’s Leading News Magazine • 8-21-14

Blue Point Exits Callison

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Blue Point Capital Partners has reached an agreement to sell its portfolio company, Callison, LLC, an architecture and interior design firm, to ARCADIS NV.  The transaction is expected to close in the third quarter of 2014.

Callison is an architecture and interior design firm with a specialization in retail design and mixed-use development. Customers include retail brands, developers, and corporate clients including Nordstrom, Cole Haan, JCPenney, Zara, Williams-Sonoma, and IKEA.  Callison was founded in 1975 and has offices in the United States, China, Europe, the Middle East, and Mexico. The company has more than 1,000 employees and is headquartered in Seattle (www.Callison.com).

Harris Williams & Co. (www.harriswilliams.com) is acting as the exclusive financial advisor to Callison. The transaction is being led by John Neuner of Harris Williams & Co.’s Richmond office and Todd Morris, Matt Conaty, and Zach England of Harris Williams & Co.’s San Francisco office.

“By leveraging Callison’s capabilities with those of our other top of class expertise companies within ARCADIS, we are creating a true leadership position in high end design and architecture,” said Neil McArthur, CEO of ARCADIS. “We will have the undisputed #1 position in retail globally, a strong leadership position in mixed-use/commercial and the clear #1 international design and architecture position in China.”

ARCADIS is a provider of design, consultancy, engineering, project and management services. The company has more than 22,000 employees and generates €2.5 billion in annual revenues.  ARCADIS is headquartered in Amsterdam (www.arcadis-us.com).

2014 PEPD • Private Equity’s Leading News Magazine • 8-21-14

Matrix Advises Stevens on Sale to JH Whitney

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Matrix Capital Markets Group was the exclusive financial advisor to Stevens Manufacturing on its recent sale to J.H. Whitney Capital Partners.

The transaction for Matrix was led by Mike Morrison, David Shoulders, William O’Flaherty and Pratik Thakral.

“This is an excellent outcome for the company, its management team, its employees and its customers.  From prior experience with J.H. Whitney, we are confident Stevens Manufacturing is in the right hands and is poised for continued growth,” said Mike Morrison, President of Matrix.

Stevens Manufacturing is a supplier of precision parts, flight-critical components and complete sub-assemblies to the aerospace industry.  The company’s parts and sub-assemblies are used in numerous commercial and defense helicopter platforms.  Stevens Manufacturing is based in Milford, CT (www.stevensmfgco.com).

“Matrix did an outstanding job of identifying a partner that both shared my vision and accomplished my goals in this transaction without a prolonged and time-consuming auction process,” said Stephen Fogler, President of Stevens Manufacturing.  “I look forward to the opportunity to partner with J.H. Whitney and to continue to serve all of our customers’ needs.”  As part of the transaction, Mr. Fogler will retain partial ownership of Stevens Manufacturing and remain with the company in his current role as President and CEO.

Matrix Capital Markets Group is a middle-market investment bank that provides merger & acquisition and financial advisory services to privately-held and private-equity owned companies. Sectors of expertise include building products, business services, consumer products, healthcare, industrial products, lumber and petroleum marketing & distribution.  Matrix was founded in 1988 and has offices in Richmond, VA (headquarters), Baltimore and Chicago (www.matrixcmg.com).

J.H. Whitney invests in small and middle market companies that are active in the consumer, healthcare, specialty manufacturing, and business services sectors. The firm is investing out of its seventh private equity fund. J.H. Whitney was founded in 1946 and is based in New Canaan, CT (www.whitney.com).

“Steve Fogler has a unique passion for the business that has been the driving force behind the company’s rapid growth and success,” said Bob Williams, Senior Managing Director of J.H. Whitney.  “Our partnership with Steve and his team provides a platform for which accelerated growth can be achieved, while ensuring that we stay loyal to the quality and customer service that have become synonymous with Stevens Manufacturing.”

2014 PEPD • Private Equity’s Leading News Magazine • 8-21-14

Golub Backs Buy of California Cryobank

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Golub Capital was the Sole Lead Arranger and Administrative Agent on a financing to support the acquisition of California Cryobank by Longitude Venture Partners and NovaQuest Capital Management.

“Golub Capital brought unique value to the transaction by tailoring its financing solution to meet California Cryobank’s growth plan,” said Dr. Gregory Grunberg, Managing Director at Longitude. “We appreciated their solution-oriented approach.”

California Cryobank (CCB) is a provider of reproductive tissue donor services and storage and stem cell banking. The company provides a resource for frozen donor sperm and specialized reproductive services, including private egg and embryo storage services.  In addition, since 1997, CCB has provided stem cell services through its FamilyCord subsidiary, including both cord blood and cord tissue banking.  CCB operates throughout the United States, as well as Europe, South America, and Asia.  CCB is registered with the FDA, accredited by the AATB (American Association of Tissue Banks), licensed by the states of California and New York, and has three CLIA-certified clinical laboratories. The company was founded in 1977 by Dr. Charles Sims and Dr. Cappy Rothman and is headquartered in Los Angeles (www.cryobank.com).

“With its leading market position, differentiated value proposition, and best-in-class leadership team, CCB is well-positioned to capitalize on the attractive growth opportunities within reproductive tissue donor services and storage and stem cell banking,” said Jonathan Pearl, Principal at Golub Capital. “We are excited to support the company’s growth and partner again with Longitude and NovaQuest and the management team at CCB.”

Golub offers buy-and-hold products ranging from $10 million to $75 million and includes one-loan financings, senior, 2nd lien and subordinated debt, preferred stock and co-investment equity. The firm underwrites and syndicates first lien loans up to $300 million. Golub Capital will hold up to $200 million per transaction. Industries of interest include consumer products, business and consumer services, defense, manufacturing, value-added distribution, media, healthcare services and restaurants. Golub has offices in New York and Chicago (www.golubcapital.com).

Longitude Capital invests from $10 million to $30 million in companies active in the life sciences, medical device and biotechnology sectors. Longitude Capital has over $700 million in assets under management and most recently raised $385 million for its second fund, Longitude Venture Partners II, LP, in 2012.  The firm was founded in 2006 and has offices in Menlo Park, CA and Greenwich, CT (www.longitudecapital.com).

“Consistent with our prior experience, Golub has proven again to be a reliable partner”, added William Robb, Partner at NovaQuest.

NovaQuest Capital Management invests in companies active in the healthcare industry with a specific interest in biopharmaceuticals. The firm is based in Raleigh, NC (www.novaquest.com).

2014 PEPD • Private Equity’s Leading News Magazine • 8-21-14