September 5, 2014
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Archives for September 5, 2014

Mill Road and Blackstone Complete Buy of R. G. Barry

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rgbarry nf1Mill Road Capital and Blackstone Tactical Opportunities have completed the take private of R.G. Barry Corporation. R.G. Barry is now approximately 50%-owned by Mill Road Capital and 48%-owned by Blackstone, with the remaining 2% held by other institutional investors.

R.G. Barry Corporation (NASDAQ: DFZ) designs, develops and markets footwear, handbags, and foot care products for women.  The company offers slippers and sleepwear products, totes, insoles and comfort products, travel accessories, and leg and footwear products. Products are sold through national chains, mass merchants, warehouse clubs, department stores, independent and specialty retailers, boutiques, catalogs, home shopping networks, and online retailers.  R.G. Barry Corporation was founded in 1947 and is headquartered near Columbus in Pickerington, OH (www.rgbarry.com).

“We have been a public shareholder of R.G. Barry for many years, and are excited to welcome the new privately-held R.G. Barry to the Mill Road family.  We look forward to working with the great team at R.G. Barry and with Blackstone to start an exciting new chapter in R.G. Barry’s history,” said Scott Scharfman, a Managing Director of Mill Road Capital.

Mill Road Capital is a private investment firm focused on investing in and partnering with publicly traded micro-cap companies in the US and Canada.  The firm currently has over $600 million of assets under management.  Mill Road Capital was founded in 2004 and is based in Greenwich, CT (www.millroadcapital.com).

naveen bahtia nf1“We believe that under a new, private ownership structure, R.G. Barry can be more flexible and will be better able to implement and execute its long-term strategic plan, including its ongoing acquisition efforts, in order to build value for the future,” said Naveen Bhatia of Blackstone Tactical Opportunities.  “We are pleased to collaborate with the terrific team at Mill Road Capital in this transaction and with the first-rate management team and associates of R.G. Barry in the next phase of growth of the company.”

Blackstone’s Tactical Opportunities business invests in opportunistic, multi-asset class investment opportunities with a focus on special situations. The group is led by Senior Managing Directors David Blitzer and Christopher James and has offices in New York and London. Click HERE for the Blackstone’s Tactical Opportunities webpage.

Golub Capital arranged the debt financing for the transaction.  Katten Muchin Rosenman provided legal counsel to Golub Capital. Mill Road Capital was advised by Foley Hoag, its legal counsel.  Blackstone was advised by its legal counsel, Paul Hastings.  R.G. Barry was advised by Peter J. Solomon Company, its financial advisor; and Vorys, Sater, Seymour and Pease, its legal counsel.

2014 PEPD • Private Equity’s Leading News Magazine • 9-5-14

North Castle Completes Sale of Ignite

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ignite nfNorth Castle Partners has completed the sale of Ignite USA, a developer and marketer of thermal mugs, to Newell Rubbermaid for a purchase price of $308 million.  North Castle invested in Ignite in March 2013.  The sale of Ignite USA represents North Castle’s first sale of a portfolio company from its recently closed fifth fund.

Ignite USA is a developer and marketer of reusable, environmentally friendly thermal mugs and hydration bottles primarily sold under the Contigo and Avex brands. The company is expected to have annual sales in 2014 of approximately $125 million.  Ignite sells its products in over 50 countries through the club, mass, sporting goods, specialty, and direct-to-consumer channels.  The company is headquartered in Chicago (www.gocontigo.com) (www.avexsport.com).

“The sale of Chicago-based Ignite continues to validate our strategy to partner with entrepreneurial management teams to build high growth brands for sale to strategic buyers,” said Alison Minter, a North Castle Managing Director. “In partnership with Sami El-Saden, Ignite’s CEO, we accelerated the company’s growth by leveraging our experience with innovation-driven product businesses, such as Cascade Sports and Octane Fitness, as well as companies with mass market distribution and channel expansion experience, including Atkins Nutritional, Enzymatic Therapy, Flatout Flatbread, Leiner Health Products, and Avalon Natural Brands.”

North Castle makes control investments in consumer-driven product and service companies located in North America with enterprise values ranging from $50 million to $500 million. Sectors of interest include: beauty & personal care; consumer health; fitness, recreation & sports; home & leisure; and nutrition. North Castle is headquartered in Greenwich, CT (www.northcastlepartners.com).

chip baird nf2“We are proud of our successful partnership with Sami and the Ignite management team,” said Chip Baird, Founder and Managing Director.  “As a focused fund, North Castle identifies high-growth, niche segments within larger industries, and partners with extraordinary management teams to build great companies. We believe that Ignite, as part of the Newell Rubbermaid family of brands, is well positioned to be a global leader in two of the fastest growing segments of the housewares industry.”

“We are always interested in new opportunities across the healthy, active and sustainable living markets to leverage our knowledge, network and experience in building market leaders like Ignite,” added Ms. Minter.

Morrison Cohen represented North Castle Partners and the company in the transaction.

2014 PEPD • Private Equity’s Leading News Magazine • 9-5-14

Argonne Capital Acquires The Lube Stop

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lube stop nf1Argonne Capital Group has acquired the assets of The Lube Stop from the company’s founder.  Lube Stop was founded in 1985 and is the oldest privately-owned quick oil change company in Northeast Ohio.

Lube Stop operates 37 quick oil change and ancillary automotive service shops in the Cleveland (28) and Akron-Canton (9) areas of Northeast Ohio. The company services approximately 25,000 customers per month. Lube Stop was founded in 1985 by Jerry Forstner and is headquartered near Cleveland in Berea, OH (www.lubestop.com).

karl jaeger nf1“Argonne has spent considerable time trying to find the right investment in the automotive service space,” said Karl Jaeger, Managing Director at Argonne Capital Group.  “With our acquisition of Lube Stop, we’ve found a stable platform and strong brand which we hope to use as a stepping stone for future acquisitions and growth.”

Argonne Capital Group makes investments of $25 million to $75 million in the multi-unit restaurant, retail and service industries.  Argonne also has a presence in multi-tenant retail real estate through its RCG Ventures platform.  In aggregate, Argonne and its affiliates have over $700 million of equity under management. The firm was founded by Michael Klump in 2003 and is based in Atlanta (www.argonnecapital.com).

With the buy of Lube Stop, Argonne has now completed 14 acquisitions in the multi-unit restaurant, retail and service sectors.  Today Argonne’s portfolio spans over 950 units covering brands such as Lube Stop, IHOP, Applebee’s, Krystal, On The Border and Stevi B’s Pizza. Argonne’s portfolio of companies employs over 25,000 people and generates in excess of $1.5 billion in annual system-wide sales.

“We could not have asked for a better partner in Argonne,” said Tony Cammerata, President of Lube Stop. “Their experience in growing multi-unit concepts and commitment to the Lube Stop culture will ensure that the next chapter in the company’s history is a great one.”

2014 PEPD • Private Equity’s Leading News Magazine • 9-5-14

Hastings Exits Advanced Precision Products

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advanced precision products nf1Hastings Equity Partners has sold its portfolio company, Advanced Precision Products, to Precision Engineered Products, a portfolio company of The Jordan Company and Nautic Partners.

Advanced Precision Products (APP), led by CEO Jeff Buck, is a manufacturer of components and products used by original equipment manufacturers in the oil & gas, medical, aerospace, automotive, military and commercial sectors.  The company is headquartered north of Hartford, CT in Palmer, MA with additional facilities in Hingham and Franklin, MA (www.advancedprecisionproducts.net).

bruce macrae nf1“Jeff and his management team have done an exceptional job at building APP into one of the leading precision component manufacturers,” said Bruce MacRae, Hastings’ Managing Director. “Through the acquisition and integration of four companies, Jeff has created a robust manufacturing platform.”

Hastings invests from $5 million to $20 million in lower middle-market energy services and equipment businesses that have trailing EBITDA from $4 million to $15 million. The firm was founded in 2004 and is based in Waltham, MA (www.hastingsequity.com).

“We’ve really enjoyed working with the Hastings team and appreciate its support and guidance over the years,” said Mr. Buck.  “We expect APP’s growth to remain strong and look forward to being part of Precision Engineered Products where we can leverage their resources to further build on our success.”

Trudeau & Trudeau Associates (www.trudeau-trudeau.com), a Boston-based business intermediary, served as financial advisor to APP and Morse, Barnes-Brown & Pendleton (www.mbbp.com) served as legal counsel to the shareholders of APP.

2014 PEPD • Private Equity’s Leading News Magazine • 9-5-14

Clairvest Exits KUBRA, Realizes 13.5x Return

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kubra nf1Clairvest Group has sold its portfolio company KUBRA Data Transfer to Hearst Corporation and has realized proceeds equal to 13.5 times its invested capital and an internal rate of return of over 40%.

KUBRA is a provider of digital bill delivery and payment services with offices across North America. The company provides services to more than 500 clients in the utility, insurance, government, financial services, healthcare and communication sectors and processes more than $350 billion in annual payments. KUBRA serves three of the five largest US utility companies and two of the top 10 insurance companies. The company is looking to expand into additional industry segments such as property and casualty insurance providers, and state and local governments. KUBRA was founded in 1992 and is based near Toronto in Mississauga, ON (www.kubra.com).

KUBRA was the first investment made by Clairvest Equity Partners III LP, a $300 million fund that began investing in 2006.  During the term of ownership, KUBRA grew to become one of the leading electronic bill presentment and payment companies in North America.

rick watkin nf1“We appreciated having Clairvest as a partner,” said Rick Watkin, President & CEO of KUBRA. “They actively supported KUBRA’s investments in growth and have been a great resource to the company.”

The Clairvest Group invests in mid-market companies, principally in North America, across a range of industries. Clairvest looks to invest from $15 million to $50 million in equity capital in companies with EBITDAs from $5 million to $40 million. Desired ownership percentages range from 20% to 80%. The firm is based in Toronto (www.clairvest.com).

During the eight year term of Clairvest’s ownership, KUBRA grew EBITDA by over 6 times. KUBRA’s growth was primarily organic, achieved through continued investment in technology and enhanced service offerings.  KUBRA’s growth was further assisted by two add-on acquisitions completed by Clairvest.  Over the past eight years, KUBRA has won several industry recognitions being named as one of Deloitte’s 50 Best Managed companies, Deloitte’s Technology Fast 50 and Fast 500 in North America, and E&Y’s Technology Entrepreneur of the Year.

michael waqgman nf1“We are very proud of KUBRA’s growth during our investment period. Rick and his team have done an outstanding job building out a technological platform that made KUBRA a leader in the Customer Interaction Management Industry. Their continued focus on innovation, investment in talent and relentless emphasis on service improvement allowed them to win some of the industry’s most coveted and sizable clients. These accomplishments made KUBRA an attractive strategic acquisition for Hearst with great future prospects,” said Michael Wagman, Managing Director at Clairvest. “KUBRA’s future is very promising and we wish this exceptional group continued success in the years to come in their partnership with Hearst,” added Mr. Wagman.

hearst nf1Hearst Corporation is one of the nation’s largest diversified media and information companies. Its major interests include ownership of 15 daily and 34 weekly newspapers, including the Houston Chronicle, San Francisco Chronicle, San Antonio Express-News and Albany Times Union; hundreds of magazines around the world, including Good Housekeeping, Cosmopolitan, ELLE and O, The Oprah Magazine; 29 television stations; ownership in leading cable networks, including Lifetime, A&E, HISTORY and ESPN; holdings in automotive, electronic and medical/pharmaceutical business information companies; a 50 percent stake in global ratings agency Fitch Group; Internet and marketing services businesses; television production; newspaper features distribution; and real estate. Hearst is headquartered in New York (www.hearst.com).

Financial Technology Partners and FTP Securities acted as exclusive strategic and financial advisors to KUBRA and its Board of Directors in this transaction.

2014 PEPD • Private Equity’s Leading News Magazine • 9-5-14

Resilience Capital Recaps Thermal Product Solutions

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thermal products nf1Resilience Capital Partners has completed a dividend recapitalization for its portfolio company, Thermal Product Solutions, which it acquired in March 2014.

The recapitalization was funded by FNB Capital Partners (www.fnbcp.com) and proceeds were used to refinance outstanding debt, fund a cash distribution to shareholders, and provide for additional working capital.

“On behalf of the entire Resilience organization today we recognize the skills and significant effort demonstrated within the Thermal Product Solutions organization as well as the Resilience Operations Team and the Resilience Human Resources Team for delivering on the 30-day, 100-day and 180-day plans,” said Steven Rosen, Co-CEO of Resilience Capital Partners.  “This debt recapitalization achievement in partnership with FNB Capital, First National Bank, SPX Corporation and the Resilience Transaction Team allows the company to expand its line of equipment offerings, innovative energy savings initiatives and aftermarket support service locations and team. There is no question investing in talented hard working people always makes sense as evidenced yet again in Riverside, Michigan and White Deer, Pennsylvania.”

Thermal Product Solutions (TPS) designs and manufactures industrial and laboratory ovens and furnaces, and environmental temperature cycling and stability test chambers. Brands include Tenney, Blue M, Gruenberg, Lindberg, and MPH. The company is headquartered north of Harrisburg in White Deer, PA with additional facilities in Riverside, MI; and Malaysia (www.thermalproductsolutions.com).

“We are pleased with our initial phase of ownership and eager to start actively seeking follow on acquisition opportunities for TPS. We are especially interested in businesses that specialize in chambers, ovens, environmental testing, and aftermarket service,” said Ron Cozean, Operating Partner at Resilience Capital Partners and Executive Chairman of TPS.

Resilience Capital Partners specializes in investing in middle market companies with $25 million to $250 million in revenues across a range of industries. The firm’s investment strategy is to acquire companies in a variety of special situations including underperformers, corporate divestitures, turnarounds, and orphan public companies. Since its inception in 2001, Resilience has acquired 40 companies under 23 platforms with over $2 billion in revenues. The firm is based in Cleveland (www.resiliencecapital.com).

2014 PEPD • Private Equity’s Leading News Magazine • 9-5-14

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