Archives for October 23, 2014

MVC and Yukon Partners Acquire AccuMED

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MVC Private Equity has acquired AccuMED, a contract manufacturer of healthcare products, in partnership with Yukon Partners which acquired a minority equity interest in AccuMed and provided subordinated debt financing in support of the transaction.  The senior management team of AccuMED will own a meaningful interest in the company and will continue to operate the business on a day-to-day basis.

AccuMED provides engineering services and contract manufacturing to healthcare product companies and OEMs of medical devices and supplies, including respiratory disorder, vascular compression, and patient transfer products. The company has a specialty in textile-based class I and II medical products that touch the body.  AccuMED’s manufacturing capabilities include flame lamination, CNC die cutting, thermoforming, ultrasonic welding, programmable sewing, inspection, packaging, testing, warehousing and logistics.   The company has nearly 1,000 employees and is headquartered in Buffalo with additional manufacturing operations in the Dominican Republic and Taiwan (www.accumedtech.com).

“AccuMED holds a leading position in a niche industry with strong underlying fundamentals and opportunities for growth,” said Peter Seidenberg, Managing Director at MVC. “As healthcare costs continue to outpace inflation, the need for device manufacturers to deliver high quality, competitively-priced products has never been greater. We look forward to providing operational and strategic support to help AccuMED further cement its industry-leading position and take advantage of market opportunities.”

MVC invests from $3 million to $25 million in middle market companies that have revenues of $10 million to $150 million and EBITDAs of $3 million to $25 million. Sectors of interest include consumer products; industrial manufacturing and services; food and food services; financial services; value-added distribution; and specialty chemicals. The firm is traded on the NYSE under the symbol MVC and is headquartered near White Plains in Purchase, NY (www.mvccapital.com).

“We are excited to partner with management and MVC to support the acquisition of AccuMED. The company has established itself as a critical manufacturer of quality products for the healthcare industry. Yukon is fortunate to provide capital to AccuMED and to serve as a partner who values their strategic growth initiatives. We also look forward to benefiting from MVC’s investment stewardship,” said Bill Dietz, Managing Partner of Yukon.

Yukon Partners makes subordinated debt and equity investments of $10 to $40 million in middle market, private equity sponsored business transactions.  The types of transactions that Yukon invests in includes buyouts, growth and platform strategies, recapitalizations, mergers & acquisitions, public to private buyouts, and refinancings. The firm is based in Minneapolis (www.yukonpartners.com).

“Today’s announcement marks a milestone in our history,” said Mark Sater, CEO of AccuMED. “By working with two established financial firms, AccuMED has secured the capital and expertise necessary to execute our growth strategy. MVC and Yukon have a track record of successfully partnering with management teams to build value. We look forward to strengthening our relationship with both firms while working together to achieve our collective goals.”

BMO Harris Bank, as the administrative agent, provided the senior debt with Fifth Third Bancorp also participating in the transaction as the documentation agent.

2014 PEPD • Private Equity’s Leading News Magazine • 10-23-14

Sverica Acquires Resonetics from Corporate Fuel

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Sverica International has acquired Resonetics, a provider of laser micromachining manufacturing services, and a portfolio company of Corporate Fuel Partners.

“We are looking forward to working with CEO Tom Burns and the rest of the team at Resonetics,” said Dave Finley, Managing Director at Sverica.  “The outsourcing trends and shift to miniaturization and polymers play to the company’s strengths. Resonetics will be a great addition to the Sverica portfolio, as it fits well with our focus on niche manufacturers that have track records of success and demonstrated growth prospects.”

Resonetics provides laser micromachining manufacturing services for medical device and diagnostic companies, as well as other markets requiring precision laser processing of polymers and glass. The company has significant capacity for laser micromachining polymers in ultra-violet wavelengths and its expertise extends to features as small as one micron (Editor’s Note: A micron is about .00004 inches. For size comparison, a human red blood cell is about 5 microns across. A human hair is about 75 microns wide).  The company also designs, builds and services laser workstations to meet specific customer needs.  Resonetics is headquartered northwest of Boston in Nashua, NH (www.resonetics.com).

“We’re excited to partner with Sverica as we embark upon the next phase of our growth strategy,” said Tom Burns, Resonetics CEO. “Their expertise and experience working with specialty manufacturers, as well as their access to capital will be important as we take advantage of opportunities in expanding markets.”

Sverica invests in service oriented businesses and light industrial manufacturers. The firm targets companies with enterprise values under $100 million and EBITDAs greater than $3 million. Sverica was founded in 1993 and has over $425 million of assets under management across three funds. The firm has offices in Boston and San Francisco (www.sverica.com).

“We are proud of having been associated with the very professional team at Resonetics, the growth of the company while we were involved and the return we were able to generate for our stakeholders,” said John Simons, Partner at Corporate Fuel Partners.

Corporate Fuel Partners, which first invested in Resonetics in November 2007, invests in middle market companies with strong niche market positions that are located in the Northeastern United States. The firm is affiliated with Corporate Fuel Advisors, an investment banking and business advisory firm that provides mergers & acquisitions and capital raising services to middle market companies. Corporate Fuel Partner is based in New York (www.corporatefuelpartners.com).

2014 PEPD • Private Equity’s Leading News Magazine • 10-23-14

RLJ Equity Partners Acquires Zak

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LAI International, a portfolio company of RLJ Equity Partners, has acquired Zak Incorporated, a contract manufacturer of components used in the power generation, specialty metals, and oil & gas industries.

“RLJ Equity Partners is delighted to support LAI’s acquisition of Zak,” said RLJ Equity Partners’ T. Otey Smith. “With its strong customer base in key end markets, Zak helps to further expand the LAI brand as well as our service offerings throughout the industry.”

Zak is a contract manufacturer of components used in the power generation, specialty metals, and oil & gas industries.  The company utilizes its large, state-of-the-art, precision machining and welding capabilities to serve customers in the United States and abroad. Zak was founded in 1937 by Alexander Zak and was originally a job shop to serve the local textile industry in Troy, NY. Today, the company is headquartered near Albany in Green Island, NY (www.zakinc.com).

“Zak is a trusted brand in our industry,” said Patrick “PJ” Gruetzmacher, CEO and President of LAI International. “Their ability to provide economically manufactured parts with superior speed and quality which meet or exceed their customers’ expectations is accomplished by applying the principles of employee development, advanced technology investment, and by using the principles of continuous improvement.”

LAI International, acquired by RLJ Equity Partners in 2012, is a manufacturer of precision engineered components and assemblies for a variety of industries, including aerospace & defense, healthcare and power generation. LAI specializes in technologies such as waterjet, laser, and electrical discharge machining.  LAI’s products are often mission-critical and found on platforms and programs used by aerospace and utility companies and the US Department of Defense.  With the acquisition of Zak, LAI now has manufacturing facilities in Tempe, AZ; Fridley, MN; Westminster, MD; Scarborough, ME; and Green Island, NY. LAI is headquartered in Phoenix (www.laico.com).

RLJ Equity Partners invests from $15 million to $30 million in companies valued between $50 million and $250 million. Target companies will have operating profits greater than $7 million and operating margins greater than 10%.  Sectors of interest include aerospace & defense; auto & transportation; business services; consumer retail; general industrial; and media & telecom.  RLJ Equity Partners was founded in 2006 by Robert L. Johnson in partnership with The Carlyle Group. The firm is headquartered in Bethesda, MD (www.rljequitypartners.com).

2014 PEPD • Private Equity’s Leading News Magazine • 10-23-14

Deutsche Asset & Wealth closes Third Secondaries Fund at Hard Cap

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Deutsche Asset & Wealth Management has held a first and final close of its Secondary Opportunities Fund III, LP (SOF III) at the fund’s $1.6 billion hard cap.

Deutsche Asset & Wealth Management is the brand name of the Asset & Wealth Management division of the Deutsche Bank Group. The division has €955 billion of assets under management and offers individuals and institutions traditional and alternative investments across all major asset classes.

The closing of SOF III included new and existing investors, such as public and corporate pension plans, sovereign wealth funds, insurance companies, foundations & endowments, and family offices from across the Americas, Europe, Middle-East and Asia. “We are very pleased to have received support from an impressive roster of institutional and private clients,” said Carlo Pirzio-Biroli, Global Head of DB Private Equity and Co-Head of DB PE Secondary Funds.

According to Mr. Pirzio-Biroli, SOF III will continue the investment strategy of earlier funds by acquiring private equity fund interests and assets in secondary markets across the globe. “In line with our proven value investing approach, we expect to deploy capital consistently across the investment cycle in transactions ranging from $1 million to $500 million globally.  We have a strong pipeline of potential deals for SOF III in place,” he said.

“We believe the secondary market fundamentals will remain attractive and we will continue to expand our secondary investment platform to provide clients with access to unique investment opportunities across the private equity, hedge fund, and real estate asset classes,” said Stephane Farouze, Head of Alternatives and Fund Solutions, which includes DB Private Equity.

Deutsche Asset & Wealth Management is headquartered in Frankfurt, Germany (www.deutscheawm.com).

2014 PEPD • Private Equity’s Leading News Magazine • 10-23-14

Western Reserve Adds New Analyst

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Western Reserve Partners, a middle market investment bank based in Cleveland, has hired Christopher Heidger as a new Analyst.

Prior to joining the Western Reserve, Mr. Heidger worked as a Senior Analyst with Vertical Knowledge, an assembler of open-source data used to analyze finance, risk, security, intelligence, commercial, and legal issues.  He also served in the US Army Special Operations Command for 10 years working as a Senior External Communications Consultant.

Mr. Heidger earned a Bachelor of Arts in Political Science from the American Public University System. He also earned a Master of Professional Studies in Strategic Relations at George Washington University.  He is currently working towards completing his Masters of Business Administration with a concentration in Finance from the Kenan-Flagler School of Business at the University of North Carolina.

Western Reserve Partners provides mergers & acquisitions, capital raising and other financial advisory services to middle market companies across a variety of industry verticals, including specific segments in industrial, business services, consumer, healthcare, technology and real estate. Western Reserve Partners is headquartered in Cleveland (www.wesrespartners.com).

2014 PEPD • Private Equity’s Leading News Magazine • 10-23-14