Archives for October 9, 2014

Rock Hill Buys Rail Service & Logistics, Adds on RTS

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Rock Hill Capital Group has completed a majority recapitalization of Rail Service & Logistics, a railroad services provider involved in the removal and disposal of wooden railroad ties.

With the closing of the recapitalization of Rail Service & Logistics (RSL), the company then acquired the assets of Rail Tie Solutions (RTS) from Savage Transportation Management, an affiliate of Savage Companies.  The acquisition of the new assets expands RSL’s capabilities and geographic coverage to include four grinding facilities and operations from the Mid-West through the Western United States.  RSL is managed by Phil Rector, President, and Greg Smith, Vice-President, who have a combined 45 years in the railroad services and tie-to-biomass fuel business segment.

With the closing of the platform and add-on acquisition, RSL now specializes in the removal and disposal of wooden railroad ties as a part of the railroad industry’s annual maintenance programs. The company coordinates with railroad track maintenance teams to collect, catalog, and dispose of decommissioned railroad ties. RSL operates in Louisiana, Alabama, Nevada and Oregon.  The company has four railroad tie grinding facilities and is headquartered in St. Louis (no website found)

“Greg and Phil are experienced entrepreneurs that fit our Rock Hill investment strategy. Both are well known within the industry with extensive customer relationships. We believe we can leverage the RSL management team to continue the growth of the current business and expand our business model to include other services for RSL’s customer base,” said James Wilson, Managing Director of Rock Hill.

Rock Hill Capital Group invests in small-to-lower middle market companies with enterprise values up to $75 million and EBITDA of less than $10 million that are located in the South and Southeast regions of the US. Sectors of interest include industrial and energy services and value-added distribution. Rock Hill has over $140 million of committed capital under management through Rock Hill Capital I, LP and Rock Hill Capital II, LP. The firm was founded in 2008 and is based in Houston (www.rockhillcap.com).

“We were excited to find a partner that believed in our strategy of expanding our business and service lines and that could support our acquisition of the RTS assets. With Rock Hill’s support and our expanded capabilities, we believe we can grow RSL into a premier provider of rail services,” said Mr. Smith.

Debt financing for the transaction was provided by IBERIABANK (www.iberiabank.com).

2014 PEPD • Private Equity’s Leading News Magazine • 10-9-14

Timepiece and Gemini Acquire Bag Balm

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Vermont’s Original, a new company formed by Timepiece Capital and Gemini Investors, has acquired the assets of the Dairy Association Company.

Dairy Association Company manufactures Bag Balm, a salve used for soothing and softening chapped and chafed skin.  Originally created to soften cow udders, Bag Balm’s soothing qualities have gone from the barn for cows to being used by bikers, gardeners, hikers, quilters, and many individuals suffering or looking to prevent chapped or chafed skin. Bag Balm is sold in drug and grocery stores, farm stores, pet stores, hardware stores, and feed and tack shops.  The company was founded in 1899 and is based in Lyndonville, VT (www.bagbalm.com).

New York-based investment bank Young America Capital (www.yacapital.com) served as exclusive financial advisor to DAC in a transaction that resulted in a significant valuation for the company’s stakeholders.  “Bag Balm’s strong and growing brand recognition among consumers brought a sizable level of interest from consumer goods focused private equity firms”, said Stanley Tobin, Senior Director of Investment Banking, who spearheaded the transaction.

“We knew that being acquired by the right buyer was critical to Bag Balm’s future success. Young America lead our efforts and identified the perfect company,” said Barbara Norris Allen, the President of Dairy Association Company and the granddaughter of company founder, John Norris, Sr.

Timepiece Capital sponsors acquisitions or recapitalizations of lower middle market companies, typically with revenues under $25 million. Sectors of interest include manufacturing, distribution and service sectors. The firm was founded in 2004 and is headquartered in Scottsdale, AZ (www.timepiececapital.com).

Gemini Investors makes equity investments of $3 million to $8 million in companies with revenues of $10 million to $100 million and EBITDAs of at least $1 million. The firm is currently investing Gemini Investors V, LP, which has $200 million of committed capital. Gemini Investors was founded in 1993 and is based in Wellesley, MA (www.gemini-investors.com).

“We’re extremely pleased that our unique strategic approach resulted in a transaction that aligned the right players at the right time,” said Peter Formanek, Managing Partner at Young America Capital. “This deal offers an opportunity for the buyers to continue a great Vermont legacy while expanding the possibilities and availability of Bag Balm in a vast marketplace.”

2014 PEPD • Private Equity’s Leading News Magazine • 10-9-14

Fort Point Capital Acquires Sullivans

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Fort Point Capital has acquired a majority equity interest in Sullivan, a designer and distributor of home décor products to specialty retailers.  Sullivans is Fort Point’s fifth platform investment for FPC Small Cap Fund I, a $93 million fund raised in 2012.

Fort Point Capital acquired Sullivans in partnership with Mark Miller and Fred Behziz, long-standing executives in the consumer products and specialty retail space.  Mr. Miller and Mr. Behziz will replace Mr. Bill Sullivan, the company’s president, who is retiring after 25 years of service.  The other members of Sullivans’ senior management team will continue on in their respective roles and are also investing in the transaction.

“We look forward to working with the management team at this exciting time,” said Christina Pai, principal at Fort Point Capital.  “Sullivans is an outstanding company that is in front of significant opportunity to broaden its customer base and product lines.”

Sullivan is a designer and distributor of seasonal and all-occasion home décor products to specialty retailers.  Sullivans was founded in 1968 and has been owned and run by the Sullivan family since inception.  The company is based in Sioux Falls, SD (www.sullivangift.com).

“I have worked with Fort Point Capital for two years to find the optimal platform in the consumer distribution space and appreciate their partnership and the opportunity they found for me to execute on our shared vision,” said Mr. Miller.

Fort Point Capital invests from $5 million to $25 million in service-oriented, lower middle market companies across a range of sectors, including business services, healthcare, consumer, and software and information. Fort Point Capital is currently investing from FPC Small Cap Fund I. The firm is based in Boston (www.fortpointcapital.com).

“My team and I were searching for a partner who would bring a leadership solution, as well as provide the strategic and financial resources for the company’s continued growth. We believe Fort Point is precisely the right partner to guide the company going forward and build upon my family’s 46 year legacy,” said Bill Sullivan, president of Sullivans.

2014 PEPD • Private Equity’s Leading News Magazine • 10-9-14

Clearlake Acquires Sage Automotive Interiors

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Clearlake Capital Group has acquired Sage Automotive Interiors, the second largest automotive textile supplier in the world. The senior management team of Sage invested alongside Clearlake in the transaction.

Sage Automotive Interiors is one of the world’s leading providers of automotive bodycloth—seating, door panel surfaces, and headliners—to original equipment manufacturers. The company has offices and manufacturing facilities in the US, Japan, China, Brazil, Korea, India and Europe. Sage is headquartered in Greenville, SC (www.sageautomotiveinteriors.com).

“This acquisition underscores Sage’s success and vision, and provides a stable platform to help drive our future growth, both domestically and globally,” said Dirk Pieper, Sage CEO. “Clearlake is an experienced investor in the automotive space, bringing valuable industry expertise and strong financial resources. We appreciate this vote of confidence in all that Sage has accomplished and in our future, and we look forward to working with the Clearlake team as we execute on our strategy.”

Recently, Sage has experienced rapid growth, almost doubling its employee count in the past five years, investing $25 million in its South Carolina operations over the past four years, and adding plants in China and Poland to enhance its worldwide footprint.

“With high quality products and its commitment to innovative design, Sage has built an impressive client list and experienced strong growth,” said José Feliciano, a founding partner at Clearlake. “We look forward to working with Sage’s talented management team and dedicated employees as we build on Sage’s plan and vision, with a continued focus on supplying the best products while also focusing on sustainability.”

Clearlake invests in special situations such as corporate divestitures, recapitalizations, buyouts, restructurings, turnarounds and minority equity investments. Sectors of interest include business services; communication; consumer products and retail; defense and public safety; energy and power; healthcare; industrials; media; software and technology.  Clearlake currently manages approximately $1.4 billion of equity capital. The firm was founded in 2006 and is headquartered in New York (www.clearlakecapital.com).

Nomura Securities (www.nomura.com) and XMS Capital Partners (www.xmscapital.com) advised Sage on the transaction.

2014 PEPD • Private Equity’s Leading News Magazine • 10-9-14

Monomoy Completes Buy of Cobra Electronics

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Monomoy Capital Partners has successfully completed its tender offer for the common stock of Cobra Electronics Corporation at a price of $4.30 per share. Immediately upon the closing of the tender offer, Monomoy completed a merger transaction to take Cobra private and add Cobra to the Monomoy portfolio of companies.

Cobra Electronics (NASDAQ: COBR) is a designer and marketer of communication and navigation products. The company’s principal Cobra division markets CB and marine radios, two-way radios, radar detectors, power inverters, jump-starters, and GPS navigation systems for drivers under the Cobra brand.  The firm’s Performance Products division sells personal navigation systems and speed camera location detectors under the Snooper name. Cobra Electronics also manages the AURA database of photo-enforcement locations (including speed camera and red-light detector positions) in North America and Europe. Cobra’s products are sold in the US, Canada, and Europe through consumer electronics stores, discount retailers, and truck stops.  The company was founded in 1961 and is based in Chicago (www.cobra.com).

Monomoy will focus on improving margins and cash flow while supporting and growing its core business.  “We are thrilled to add Cobra to our consumer electronics portfolio,” said Justin Hillenbrand, Monomoy’s Co-Chief Executive Officer. “Cobra has a market-leading brand and a well-deserved reputation for delivering quality products. We look forward to working with the Cobra team to build a thriving business.”

Monomoy Capital Partners makes control investments in middle market businesses with $50 million to $500 million in annual sales. Sectors of interest include manufacturing, distribution, consumer product and foodservice industries. Over the past five years, Monomoy has closed 43 middle market acquisitions. Its portfolio companies generate over $1.2 billion in combined sales and employ more than 6,000 people across four continents.  The firm has $700 million in assets under management and is headquartered in New York (www.mcpfunds.com).

Monomoy’s acquisition of Cobra marks the firm’s third middle market investment over the past three months, following its acquisition of American Textile Industries (June 2014) and Continental-Midland Group (July 2014).

2014 PEPD • Private Equity’s Leading News Magazine • 10-9-14

New Mountain Closes Oversubscribed Fund 4

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New Mountain Capital has held a final close of its fourth private equity fund, New Mountain Partners IV, LP, with $4.1 billion of capital commitments.  The $4.1 billion of capital commitments consists of $4.0 billion from third party limited partners and $130 million from the general partner and affiliated investors.  The fund, which had a target of $3.0 billion, was oversubscribed at its hard cap of $4.0 billion of limited partner commitments.

“We thank our Fund IV investors for their friendship and partnership,” said Steven Klinsky, founder and CEO of New Mountain. “We will do our best to reward their confidence with strong performance.”

Since 2000, New Mountain has invested in 29 companies, including three for Fund IV thus far: ACA Compliance, a provider of regulatory compliance consulting services to the financial services industry (www.acacompliancegroup.com);  Alexander Mann Solutions, a provider of technology-enabled recruiting, staffing and other human resource services (www.alexandermannsolutions.com); and Medical Specialties Distributors, a specialty distributor of parts and equipment to home infusion therapy providers (www.msdonline.com).

New Mountain Capital currently manages private and public equity funds with over $15 billion of assets under management. The firm is an industry generalist but has specific expertise in education, health care, software, business services, logistics, specialty chemicals, federal services, media, consumer products, financial services and insurance, environmental services, infrastructure and energy. New Mountain was founded in 1999 and is headquartered in New York (www.newmountaincapital.com).

2014 PEPD • Private Equity’s Leading News Magazine • 10-9-14