Archives for November 14, 2014

Taglich and Ironwood Exit American Blanching

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Taglich Private Equity and Ironwood Capital have sold American Blanching Company, a producer of peanut butter, to Post Holdings for $128 million.  Taglich and Ironwood acquired American Blanching in February 2010.

American Blanching is a producer of peanut butter for national brands, private label retail and industrial markets. The company is a vertically integrated manufacturer offering blanching (removing skin from nut meat through a hot water process), cleaning, sorting, roasting and granulating for industrial and retail customers. Representative customers include Unilever, Smart Balance, Kroger, ALDI, Flowers Snacks, Flavors “R” and Peanut Butter & Co.  American Blanching is based in Fitzgerald, GA (www.americanblanching.com).

“We appreciate the confidence Taglich and Ironwood Capital showed in our company.  Their investment was timely and enabled us to capitalize on several opportunities,” said Jack Warden, president and CEO of American Blanching Company.

Post Holdings (NYSE: POST) manufactures, markets and distributes ready-to-eat cereals, snacks, and other nutrition products.  The company was founded in 1895 and is based in St. Louis (www.postfoods.com).

Post will combine American Blanching with Golden Boy Foods, its existing peanut and other nut butter business.  “We are pleased with the progress at Golden Boy and we like the prospects for private label nut butters,” said William Stiritz, Post’s Chairman and CEO. “American Blanching will nicely complement Golden Boy and expand our presence in this growing category.”  On a full year basis, American Blanching is expected to contribute approximately $135 million of net sales to Post and add approximately $14 million to $16 million of Adjusted EBITDA.

“Our investment in American Blanching allowed the company to expand its facilities, develop new products and serve new markets,” said Dickson Suit, managing director, Ironwood Capital. “At the time of investment we recognized strong macro trends and a lot of growth potential. Management, with the support and resources of Taglich, did a fantastic job executing to plan.”

Taglich Private Equity makes equity investments of $3 million to $15 million in companies with revenues of $15 million to $150 million and EBITDAs of $5 million to $15 million.  Sectors of interest include manufacturing, consumer products and business services. The group is the alternative investment arm of Taglich Brothers, a provider of services to microcap companies seeking to raise capital through private placements including secured notes, mezzanine financing, and preferred and common equity.  Taglich Private Equity is based in New York (www.taglichpe.com).

Ironwood Capital makes mezzanine and equity investments of $5 million to $20 million in companies with revenues of $20 million to $200 million and EBITDAs of $3 million to $15 million.  The firm is generally industry agnostic but has experience in recurring revenue business service models, environmental services and precision manufacturing.  The firm has $500 million of capital under management and is headquartered in Avon, CT (www.ironwoodcap.com).

2014 PEPD • Private Equity’s Leading News Magazine • 11-14-14

TSG Exits Garden Protein

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Pinnacle Foods has entered into an agreement to acquire Garden Protein International, a maker of food using plant-based protein and sold under the brand name Gardein™, from Founder and President Yves Potvin and TSG Consumer Partners, for C$175 million.

Garden Protein International is a manufacturer of center-of-plate foods using plant-based proteins.  Products, sold under the Gardein (garden + protein) brand name, include chicken strips and tenders, ground beef, fish fillets, and other types. The company’s products are sold at 22,000 traditional and non-traditional retail locations as well as over 5,000 restaurants and 100 colleges, universities as well as other venues across North America.  Gardein is expected to generate net sales of C$65 million in 2014. The company was founded in 1989 by Yves Potvin and is headquartered in Vancouver, BC (www.gardein.com).

TSG Consumer Partners makes control and non-control investments of $15 million to $100 million in companies with EBITDAs of $3 million to $50 million where there is an opportunity to enhance value by extending brand, expanding distribution and improving operations. Since its founding in 1987, TSG has been an active investor in the food, beverage, restaurant, beauty, personal care, household and apparel & accessories sectors. The firm has $2.9 billion in equity capital under management and is headquartered in San Francisco (www.tsgconsumer.com).

“The acquisition of Gardein is a key enabler to continue building our Birds Eye brand into the leading health and wellness brand focused on helping Americans eat more vegetables.  By bringing Gardein under the Birds Eye umbrella, we will accelerate growth through expanded distribution, marketing and innovation,” said Pinnacle Foods Chief Executive Officer Bob Gamgort.

Perella Weinberg Partners is serving as financial advisor to Pinnacle Foods, and Houlihan Lokey is serving as financial advisor to Garden Protein International.

Pinnacle Foods is a producer, marketer and distributor of shelf-stable and frozen branded food products.  The company is headquartered in Parsippany, NJ and has approximately 4,400 employees.  The purchase price of C$175 million will be funded by Pinnacle Foods with available liquidity (www.pinnaclefoods.com).

“We believe that plant-based protein is at the tipping point of becoming mainstream, making Gardein an exciting new growth platform for the Birds Eye business.  We congratulate Yves and the Gardein team for pioneering new territory in food and look forward to welcoming them to Pinnacle,” added Mr. Gamgort.

2014 PEPD • Private Equity’s Leading News Magazine • 11-14-14

Aquiline Acquires Beach & Associates

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Aquiline Capital Partners has acquired Beach & Associates, a specialist reinsurance intermediary. The company’s Founder and Chairman, Jonathan Beach, will retain a significant investment in the firm and remain on its Board of Directors. Beach’s senior Partners have invested in the company alongside Aquiline and will own approximately 15 percent of the company.

“The Aquiline team shares our vision for the company and we look forward to leveraging their insurance expertise and capital investment to strengthen our business,” said Grahame Millwater, Chief Executive Officer of Beach & Associates. “This investment will allow us to continue our model of serving our clients with a team-oriented and forward-looking approach.”

Beach & Associates is an independent specialty reinsurance intermediary specializing in reinsurance placements for complex and technical books of business.  The firm’s clients are mainly large US and international property and casualty commercial lines insurers underwriting specialty lines insurance products.  Beach & Associates was founded in 1988 and has offices in London, Bermuda, Toronto, and New York (www.beachandassociates.com).

“With Grahame Millwater’s leadership, we see opportunity for Beach & Associates to develop and expand in the current market,” said Jeff Greenberg, Chief Executive Officer of Aquiline. “We look forward to working with Grahame and the rest of the senior leadership team.”

Aquiline Capital Partners invests in middle-market businesses across the financial services sector in banking and credit, insurance, investment management and markets, and financial technology.  The firm is based in New York (www.aquiline-llc.com).

2014 PEPD • Private Equity’s Leading News Magazine • 11-14-14

MidOcean to Exit GK Holdings to Rhône Capital

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MidOcean Partners has agreed to sell Global Knowledge, a worldwide corporate training company, to Rhône Capital. MidOcean first invested in Global Knowledge in October 2011.

Global Knowledge is the largest worldwide provider of authorized training for technology vendors including Cisco, Microsoft, and VMware. In addition to vendor-authorized content, Global Knowledge develops and delivers proprietary content in IT and Business Skills areas such as networking, business process, and project management.  Global Knowledge educates over 200,000 corporate professionals across 22,000 class sessions each year. The company is headquartered in Cary, NC (www.globalknowledge.com).

“Global Knowledge has been an excellent investment for our firm,” said Ted Virtue, CEO of MidOcean Partners. “We have enjoyed the opportunity to partner with a strong management team and to leverage the company’s leading market position to take advantage of a growing and increasingly important industry.  MidOcean was also able to apply its methodologies and expertise to position the business for sustained growth and success going forward.”

MidOcean Partners invests in middle market companies active in the consumer and business services sectors.  The firm has offices in New York and London (www.midoceanpartners.com).

During MidOcean’s term of ownership, Global Knowledge achieved significant organic revenue and EBITDA growth. The company accelerated its virtual learning offerings, expanded its technology education partnerships including the addition of IBM and Amazon Web Services and broadened its proprietary content suite within technology and business skills.

Rhône Capital is a global private equity firm with more than €3 billion under management and a focus on private equity investments in businesses with a pan-European or transatlantic presence.  Sectors of interest include business services, chemicals, consumer products, food, industrial, materials, mining, and shipping.  The firm was founded in 1996 and has offices in London and New York (www.rhonegroup.com).

Robert W. Baird & Co. advised Global Knowledge on this transaction.

2014 PEPD • Private Equity’s Leading News Magazine • 11-14-14

Auto Supplier M&A Activity Increasing

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PwC has completed its seventh annual “Consolidation in the Global Automotive Supply Industry Study” and reveals that for the first time since 2011, automotive supplier merger and acquisition activity is expected to increase.

According to the study, PwC estimates about 211 deals for the year, a 13 percent increase over 2013.  At the same time, the average deal size – after excluding large outliers – will remain the same, with about $50 million in average transaction value. The study reveals that for the fourth consecutive year, North American suppliers, especially those in the Global 100, are the strongest consolidators.  European suppliers represent the second largest group of consolidators, after a multi-year absence during the European vehicle production decline of the last few years.

According to Dietmar Ostermann, PwC’s global automotive advisory leader and one of the authors of the study, auto supplier consolidation is fueled by a number of factors, including (i) the four percent CAGR for global vehicle production forecast through 2020; (ii) technological developments related to fuel efficiency, weight reductions, and connected and self-driving car technology; and (iv) an uptick in private equity activity.

The study identifies that again in 2014; over 50 percent of all transactions are among companies involved in the powertrain and chassis systems of the automobile. Exterior systems companies also experienced an increase in transactions.

PwC identifies 24 global consolidators, the majority of which are North American and European Global 100 suppliers. Each of these suppliers took part in an average of six deals over the last five years. While European based automotive suppliers continue to be the main targets of acquisitions, with 36 percent of all deals in 2014, suppliers headquartered in North America experienced a dramatic increase in their share of the M&A space, increasing from 22 percent of all targets in 2013 to 31 percent in 2014.

For more details about the Consolidation in the Global Automotive Supply Industry Study, download the publication at www.pwc.com/auto.

PwC’s seventh annual “Consolidation in the Global Automotive Supply Industry Study” evaluates the largest automotive suppliers worldwide with respect to financial and operational performance and acquisition history. The expanded 2014 study includes 100 global automotive suppliers in depth as well as 708 additional suppliers from Brazil, China, Europe, India, Japan, North America, South Korea and South-East Asia.

2014 PEPD • Private Equity’s Leading News Magazine • 11-14-14

Duff & Phelps Adds Diligence Pro

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Brian Sipes has joined Duff & Phelps’ Transaction Advisory Services practice.  Mr. Sipes specializes in buy-side and sell-side financial due diligence. He has experience in analyzing the quality of earnings, key business and earnings drivers, financial projections and working capital along with the review of purchase agreements and post-closing purchase price disputes. He will be based in the firm’s Dallas office.

Mr. Sipes joins Duff & Phelps after being a director in Houlihan Lokey’s Transaction Advisory Services group and previously was the director of Corporate Development for Flowserve Corporation, an S&P 500 industrial manufacturer. Prior to Flowserve he was a director in PricewaterhouseCoopers’ Transaction Services Practice providing M&A support to financial and strategic buyers and sellers.

Mr. Sipes has advised on well over 200 transactions ranging in size from $10 million to $5 billion, encompassing an array of industries, including manufacturing, oilfield services, distribution, food and beverage, consumer products, building materials, transportation, healthcare, technology and financial services. He has a BBA in accounting from Bucknell University and an MBA from Northwestern University.  He is also a Certified Public Accountant.

Duff & Phelps advises clients in the areas of valuation, M&A and transactions, restructuring, alternative assets, disputes and taxation and has more than 1,000 employees serving clients from offices in North America, Europe and Asia (www.duffandphelps.com).

2014 PEPD • Private Equity’s Leading News Magazine • 11-14-14