Archives for October 3, 2014

Penfund Co-Invests in Mister Car Wash

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Penfund was a co-investor with Leonard Green & Partners on its acquisition in August of Car Wash Partners (DBA Mister Car Wash), the largest full-service car wash chain in the United States.  Penfund provided $15.1 million debt and equity to support the acquisition.

Mister Car Wash operates 134 car washes and 32 lube centers in 14 states across the country, making it the largest car wash and lube center chain in the United States.  Mister Car Wash is the most acquisitive company in the car wash industry having completed over 25 acquisitions representing over 70 stores since 2009.  The company has 4,800 employees and services more than 15 million vehicles annually.  Mister Car Wash was founded in 1996 and is headquartered in Tucson, AZ (www.mistercarwash.com).

Penfund specializes in providing junior capital to North American middle market companies.  The firm provides second lien, high yield and mezzanine debt, control and minority equity, as well as bridge facilities, standby lines, underwritten facilities and financial guarantees. Penfund is currently investing out of Penfund Capital Fund IV which has $460 million of committed capital. The firm was founded in 1979 and is based in Toronto (www.penfund.com).

“We are very happy to have been able to support Leonard Green in their acquisition of Mister Car Wash. We believe the acquisition will enable Mister Car Wash to continue its strong growth and maintain its industry leadership,” said Jeremy Thompson, a partner at Penfund.

Leonard Green & Partners invests in middle-market companies with market-leading franchises and defensible competitive positions, attractive growth prospects and proven management teams. The firm’s investments are in the form of traditional buyouts, going-private transactions, recapitalizations, growth capital investments, corporate carve-outs and selective public equity and debt positions. Sectors of interest include retail, distribution, healthcare, aerospace/defense and consumer/business services. Leonard Green & Partners was established in 1989 and manages approximately $15 billion of equity capital. The firm is located in Los Angeles, CA (www.leonardgreen.com).

“Mister Car Wash has built one of the most sophisticated operating platforms in the car wash industry and now, with the strength of Leonard Green’s backing, we’re perfectly positioned to grow at an even faster clip,” said John Lai, CEO of Mister Car Wash.

Prior to being acquired by Leonard Green and Penfund, Mister Car Wash had been a portfolio company of Onex Corporation, through its ONCAP II investment fund, which acquired the company in April 2007.  During its term of ownership, ONCAP grew the company from 39 locations to 134 today.

2014 PEPD • Private Equity’s Leading News Magazine • 10-3-14

American Capital Exits Avalon Laboratories

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American Capital has sold its portfolio company Avalon Laboratories to Nordson Corporation for $180 million.  Over the life of its investment, American Capital realized a compounded annual rate of return of 19% on its equity investment, including dividends and fees.   The investment in Avalon Laboratories was made through American Capital Equity III, LP (ACE III) in January 2008.

“We are extremely pleased with the results of our investment in Avalon, which is the first exit for ACE III,” said Eugene Krichevsky, Partner, American Capital Equity Management.  “Avalon generated strong financial performance during our hold period, with double digit annual revenue and EBITDA growth despite the global recession.”

Avalon is a designer and manufacturer of highly-specialized, single-use catheters and specialty medical tubing products for cardiology, pulmonology and related applications.  The company serves OEM customers in the cardiology, pulmonology, endovascular, bariatrics, tracheostomy, endoscopy, non-vascular stent and ophthalmic markets segments.  Avalon was founded in 1990 and is headquartered south of Los Angeles in Rancho Dominguez, CA (www.avalonlabs.com).

“Our investment in Avalon is an excellent example of our focus on providing founders of lower middle market companies with both liquidity and a strong partner post-closing to ensure continued success,” said Ryan Sacco, Vice President, American Capital Equity Management.  “We worked closely with Avalon’s management team to provide strategic support and guidance as the company expanded its product offering into adjacent markets, acquired new customers and enhanced its manufacturing capabilities.”

American Capital is a publicly traded (NASDAQ: ACAS) private equity firm and asset manager that originates, underwrites and manages investments of $10 million to $750 million in lower and middle market private equity, leveraged finance, real estate, energy & infrastructure and structured products.  From its eight offices in the US and Europe, American Capital and its affiliate, European Capital, will consider investment opportunities from $10 million to $750 million.  The firm is headquartered in Bethesda, MD (www.AmericanCapital.com).

“I’ve thoroughly enjoyed partnering with the American Capital team and appreciate their support for our various strategic and operational initiatives,” said Avalon CEO, Mike Janish.  “I look forward to leveraging Nordson’s global footprint, complementary product lines and operational know-how in the next phase of Avalon’s growth.”

Nordson Corporation (NASDAQ: NDSN) designs and manufactures dispensing equipment for consumer and industrial adhesives, sealants and coatings. The company is based in Westlake, OH (www.nordson.com).

2014 PEPD • Private Equity’s Leading News Magazine • 10-3-14

ABRY Adds Three Brokerages to Insurance Platform

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Confie Seguros, a provider of personal lines insurance and a portfolio company of ABRY Partners, has acquired three insurance brokerages in New York and Washington that will build on the company’s existing geographic footprint. ABRY Partners acquired Confie Seguros in November 2012 from Genstar Capital.

Confie Seguros is a national insurance distribution company primarily focused on the insurance needs of Hispanic consumers.  Confie Seguros has acquired and integrated over 70 businesses since its inception and has annual revenue approaching $350 million and over 560 retail locations.  The company has leading market positions in California, Arizona, Texas, Florida, Washington, Oregon, New York, New Jersey,  Nevada, Illinois, Alabama, Kansas, Wisconsin, South Carolina, Missouri, Louisiana,  and Indiana and expects to continue its expansion in those and other states, including  Georgia, Virginia and North Carolina. The company was founded in 2008 and is based in New York (www.confieseguros.com).

The three new acquisitions completed by ABRY for Confie Seguros are as follows:  AA Insurance Services, founded in 1995 and based in Lockport, NY, is a standard personal lines agency specializing in auto and homeowners insurance; Parietti & McGuire Insurance is a second generation family-owned business founded 50 years ago that is based today in Monroe, NY and specializes in providing auto, home and small commercial insurance; and Insurance Now, headquartered in Bellingham, WA was founded in 1997 and specializes in auto insurance.

“We are pleased that family-owned businesses see value in entrusting their companies with us as we build on the legacies established in their communities.  Our investment pipeline remains robust in all of our key markets, and we look forward to completing additional acquisitions in the fourth quarter,” said Joe Waked, Chairman of Confie Seguros.

ABRY Partners invests in the media, communications, and business and information sectors. ABRY is currently investing ABRY Partners VII (a $1.6 billion private equity fund), ABRY Senior Equity III (a $750 million senior equity/mezzanine fund) and ABRY Advanced Securities Fund II (a $1.2 billion senior debt fund). The firm is headquartered in Boston (www.abry.com).

2014 PEPD • Private Equity’s Leading News Magazine • 10-3-14

Balance Point and Dubin Clark Acquire D. Lovenberg

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Johnny on the Spot, a portfolio company of Balance Point Capital Partners and Dubin Clark, has completed its second add-on acquisition with the buy of D. Lovenberg’s Portable Toilet Rentals. Balance Point and Dubin Clark acquired Johnny on the Spot in April 2014.

Lovenberg’s Portable Toilet Rentals is a provider of portable restrooms, roll-off dumpsters, and related products to the construction and special events industries. The company was founded in 1998 and is headquartered in Andover, NJ (www.dlovenberg.com).

“D.Lovenberg fits well within our strategy of providing high-quality products and services in the portable sanitation industry,” said Jess Thompson, CEO of Johnny on the Spot. “The company has grown steadily over the last several years and extends the geographic reach of our business. We look forward to continuing to build one of the preeminent portable sanitation companies in the country.”

Johnny on the Spot (JOTS) is a provider of portable toilets and related products to the special event and construction industries, as well as residential and commercial septic system maintenance, inspections, repairs and installations in New Jersey, New York and Pennsylvania.  The company was founded in 1969 and is headquartered in Old Bridge, NJ (www.johnnyonthespot.com).

“D. Lovenberg is a great company with a reputation for excellence, and bringing it under the JOTS umbrella will help us further accelerate growth,” said Mike Hompesch, Partner of Dubin Clark. “In addition, we are excited to have Dustin Lovenberg join the JOTS team, given his wealth of industry knowledge and customer relationships.”

Balance Point Capital Partners invests from $5 million to $20 million of mezzanine and equity in lower middle market companies that have revenues of $10 million to $150 million and EBITDAs between $2 million and $25 million. Sectors of interest include business services, niche manufacturing, consumer & industrial, branded products, aerospace & defense, healthcare, and technology.  Balance Point was founded in 1988 and is based in Westport, CT (www.balancepointcapital.com).

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).

Balance Point and Dubin Clark are actively seeking additional add-on opportunities for JOTS.

2014 PEPD • Private Equity’s Leading News Magazine • 10-3-14

Blackstone’s Strategic Partners Closes Fund 6 at $4.4 Billion

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Strategic Partners Fund Solutions, Blackstone’s in-house secondaries and co-investment platform, has held a final closing of its sixth fund, Strategic Partners Fund VI, LP (SP VI), at its hard cap of $4.4 billion.  Fundraising for SP VI began in April 2014.

“Strategic Partners is thrilled with the significant investor demand for our sixth secondary fund. We are excited to welcome both new and existing limited partners from around the globe, who have chosen to partner with Strategic Partners to capitalize on the growing opportunity in the secondary market,” said Verdun Perry, Co-Head of Strategic Partners.

Strategic Partners sourced commitments from almost 300 investors, including public, corporate and foreign pension funds, financial institutions, sovereign wealth funds, endowments, foundations and family offices. High net worth individuals also participated in the new fund through various private banking investment vehicles. Geographically, the limited partners of SP VI come from the US, Canada, Europe, the Middle East, Asia-Pacific and South America.

“We could not be more pleased with the reception we received from investors globally in raising SP VI. We are grateful for the support that our limited partners have shown us, which has allowed us to conclude fundraising substantially ahead of schedule and focus on investing SP VI,” said Stephen Can, Co-Head of Strategic Partners.  “We look forward to leveraging our expertise in the secondary space and to building on our track record as the ‘secondary buyer of choice’, by transacting on a fair, timely and confidential basis.”

Strategic Partners Fund Solutions is comprised of 33 investment professionals and has raised over $16 billion for private equity and real estate investing since its founding in 2000.  Strategic Partners has executed over 800 transactions that represent interests in over 1,800 unique underlying funds managed by over 700 different financial sponsors. The group is based in New York (click HERE to visit the group’s website).

Strategic Partners was advised and supported in the raising of SP VI by the private funds team at Davis Polk & Wardwell (www.davispolk.com).

 2014 PEPD • Private Equity’s Leading News Magazine • 10-3-14

The Presidio Group Advises KPA on Sale to CIVC

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The Presidio Group acted as the exclusive financial advisor to KPA Services, a services and software provider to automotive and truck dealerships, on its recent sale to CIVC Partners.

KPA Services provides environmental, health, & safety compliance and human resource management services to over 5,100 automotive, truck and equipment dealerships, and service companies. Customers include eight of the ten largest dealer groups. KPA is headquartered north of Denver in Lafayette, CO (www.kpaonline.com).

The Presidio Group is an independent financial services firm focused on wealth advisory, investment banking and private equity. Areas of specialization within investment banking include auto and truck dealerships, cloud technology, and technology-enabled business services.  The firm was founded in 1997 and today has approximately $4.3 billion under advisement, 60 employees, and offices in San Francisco and Dallas (www.thepresidiogroup.com).

“When selecting our financial advisor it was paramount that the firm was well versed in the automotive technology market but exhibited impeccable integrity and exceptional communication to help drive our refinancing effort with our seasoned board of directors,” said KPA CEO Vane Clayton.  “The Presidio Group and specifically Bill Lamm and Katie Benson created instant credibility for KPA with prospective investors due to their past auto industry transactions and a proven track record of representing high performance companies.”

The Presidio Group worked closely with KPA’s management team on all facets of the transaction including preparation, marketing, negotiation and due diligence.

“We are pleased to have been able to put our deep sector knowledge and advisory expertise to work to assist KPA CEO Vane Clayton and his talented team and help this dynamic and rapidly growing company realize the significant value that they created,” said Bill Lamm, Managing Director and head of technology-enabled business services investment banking at Presidio.

“From the development of the initial offering materials to the final negotiation and closing of the deal, Bill Lamm was not just an advisor, but our partner. It was apparent that his goal was more than just obtaining the most attractive financial outcome for KPA’s shareholders, but to also ensure a win‐win deal for the new investors. His guidance in highlighting KPA’s key metrics to drive premium value, the completeness of the financial package to build confidence with prospective investors, and his willingness to be involved at the detail level from start to finish ensured a successful transaction for KPA shareholders and management,” added Mr. Clayton.

This year, The Presidio Group has completed three other transactions in the software as a service vertical.  Presidio acted as an exclusive financial advisor to AutoAlert on its recapitalization which was led by HGGC, a Palo Alto based mid-market private equity firm; CAR-Research XRM (www.car-research.com) on its sale to Autoloop (www.autoloop.net); and to DigiGo (www.digigo.com) on its sale to Search Optics (www.searchoptics.com).

2014 PEPD • Private Equity’s Leading News Magazine • 10-3-14