Archives for February 24, 2015

Breakwater Continues Build of Senior Team

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Breakwater Investment Management, continuing to add to its senior team, has hired Harry Chung as the firm’s new Chief Financial Officer. In December 2014, Eric Beckman, a former Senior Partner at Ares Management, joined Breakwater as Chairman and Co-Managing Partner.  Mr. Beckman manages the firm alongside Saif Mansour, Breakwater’s Founder and other Co-Managing Partner.

“I am extremely pleased to welcome Harry to the firm,” said Mr. Mansour. “His experience managing financial services organizations will be invaluable as we further develop the infrastructure and systems necessary to manage our growing business.”

Prior to joining Breakwater, Mr. Chung was Chief Financial Officer at Los Angeles-based investment bank Imperial Capital where he was a member of the Executive Committee and was responsible for business planning, tax, budgeting and financial reporting.  Earlier, Mr. Chung was at Jefferies & Company, most recently as Managing Director and Chief Operating Officer (Finance), and as a Senior Vice President in Corporate Development. He is a graduate of the University of Illinois.

“I am excited to join Breakwater and to have the opportunity to work with such an experienced team of investment professionals and operating executives. The firm’s equity and debt financing verticals provide a broad set of capital solutions for the lower middle market, and I very much look forward to supporting Breakwater’s next phase of growth,” said Mr. Chung.

Breakwater specializes in direct investments in small to lower middle market growth businesses with annual sales ranging from $5 million to $100 million. The firm serves as general partner of Breakwater Structured Growth Opportunities Fund, a $100 million open-ended private investment partnership formed in August 2008. The fund’s investment objective is to generate both current income and capital appreciation through secured debt investments accompanied with equity participation rights, primarily in growth-oriented companies across a variety of industries.  Breakwater is based in Los Angeles (www.breakwaterfunds.com).

© 2015 PEPD • Private Equity’s Leading News Magazine • 2-24-15

Golub Provides Debt for Buy of PowerPlan

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Golub Capital was the Joint Lead Arranger, Joint Bookrunner and Senior Administrative Agent, on a $195 million senior credit facility to back the recent acquisition of PowerPlan by Thoma Bravo.

PowerPlan is a provider of asset-centric accounting, tax, budgeting and analytics software for asset-intensive businesses that operate within the utility, oil and gas, transportation, and telecom industries.  The company was founded in 1994 and is based in Atlanta (www.powerplan.com).

PowerPlan marks the sixth Thoma Bravo portfolio company that Golub Capital has invested in.  The firm’s most recent transactions include the 2014 acquisitions of Sparta Systems and Global Healthcare Exchange. “Golub Capital provided a deep understanding of the industry and our execution strategy, which provided us with confidence they would deliver an effective financing solution,” said Peter Stefanski at Thoma Bravo. “Golub Capital once again exceeded our high expectations for a financing partner.”

“PowerPlan is a leading enterprise-class provider with an extraordinary management team,” said Spyro Alexopoulos, Managing Director at Golub Capital. “We are thrilled to be working yet again with our long-time partner and world-class sponsor Thoma Bravo.”

Golub offers buy-and-hold products ranging from $10 million to $75 million and includes one-loan financings, senior, 2nd lien and subordinated debt, preferred stock and co-investment equity.  The firm underwrites and syndicates loans up to $500 million and will hold up to $250 million per transaction. Industries of interest include consumer products, business and consumer services, defense, manufacturing, value-added distribution, media, healthcare services and restaurants. Golub has offices in New York, Chicago, and San Francisco (www.golubcapital.com).

© 2015 PEPD • Private Equity’s Leading News Magazine • 2-24-15

Nik Shah Makes MD at H.I.G. Growth

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H.I.G. Growth Partners, the growth capital investment affiliate of H.I.G. Capital, has promoted Nik Shah to Managing Director. Mr. Shah joined H.I.G. in 2007 and has been responsible for a number of investments in the technology, digital media, marketing and business services sectors.

Mr. Shah has over fifteen years of experience investing in lower middle market growth companies. Prior to joining H.I.G., he was a Senior Associate at Landmark Growth Capital Partners, an Associate at AH Ventures and an Analyst at Adams Harkness. Mr. Shah received his undergraduate degree from Harvard and his MBA from Dartmouth.

“Nik has made significant contributions to the firm and has been responsible for sourcing and structuring a number of successful investments. His experience investing in high-growth small-cap businesses, especially in technology-based companies, allows Nik to bring significant value to our group and portfolio investments,” said John Black, Head of H.I.G. Growth Partners.

H.I.G. Growth makes both majority and minority equity investments ranging from $5 million to $30 million in businesses that have revenues between $10 million and $100 million.  The firm considers investments across all industries, but areas of specific interest include healthcare, technology, internet and media, consumer products and technology-enabled financial and business services (www.higgrowth.com).  As a new Managing Director Mr. Shah will continue to focus on investments across a range of sectors as H.I.G. Growth continues to invest its $500 million equity fund.

© 2015 PEPD • Private Equity’s Leading News Magazine • 2-24-15

Prospect Partners Forms New Vet Platform

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Prospect Partners, looking to buy-and-build a veterinary hospital platform, has provided equity capital to Innovetive Petcare to finance the acquisition of Animal Emergency Specialty Center, a specialty veterinary hospital.

Animal Emergency Specialty Center (AESC) becomes the first subsidiary of Innovetive Petcare, a veterinary hospital operator led by animal health industry executives Mark Ziller and Paul Covill.

AESC is a specialty/emergency room veterinary hospital based in Knoxville, TN.  AESC is a referral-based practice focusing on surgical procedures, oncology, and emergency services for small companion animals.  The company was founded in 1991 by veterinary surgeon Mitch Rosenzweig, who joins Innovetive Petcare’s management team and will continue practicing medicine at AESC.

“AESC is a successful and growing specialty veterinary surgical center with an excellent team, and is a great model for other clinics,” said Maneesh Chawla, a Principal of Prospect Partners. “Mark Ziller and Paul Covill are talented, proven managers with a deep understanding of the animal health industry and veterinary hospital operations. They are absolutely committed, as is Prospect Partners, to investing in and building each animal practice and to creating a highly successful hospital network.”

Mr. Ziller and Mr. Covill have worked together for more than 15 years. Mr. Ziller’s multiple successful startups include two veterinary companies. TW Medical Veterinary Supply, a full-line distributor of veterinary pharmaceuticals, surgical supplies and equipment, which was purchased by Lextron/Animal Health International.  Mr. Ziller also launched The Pet Blood Bank, a provider of canine blood infusion products.   Prior to Innovetive Petcare, Mr. Covill held various roles at TW Medical Veterinary Supply, eventually running a $20 million vet and over-the-counter pet products division at Lextron/Animal Health International.

Innovetive Petcare will provide AESC a range of operational support services.  “Innovetive Petcare’s mission is to run a great business so veterinarians and their staff can focus on practicing great medicine. We will provide a suite of best-of-breed business services to support and grow the clinic, while allowing the owners to reduce business risk through financial diversification, liquidity, and, when they are ready, an exit strategy,” said Mr. Ziller. “Through Prospect Partners, we have access to the resources and capital we need to acquire and invest in clinics, provide operational support, and develop a hospital network that implements best practices in management and animal care.”

Prospect Partners focuses exclusively on management-led leveraged recapitalizations and acquisitions of niche market leaders with revenues of less than $75 million.  Since 1998, Prospect Partners has invested nationwide in more than 110 companies in a range of niche manufacturing, distribution, and specialty service markets. The firm has $470 million of capital under management and is based in Chicago with an additional office in Menlo Park (www.prospect-partners.com).

Innovetive Petcare becomes the 10th platform company in Prospect Partners’ $200 million third fund, Prospect Partners III, LP.  Since 1998, Prospect Partners has built 46 platform companies through the acquisitions of more than 115 businesses.

© 2015 PEPD • Private Equity’s Leading News Magazine • 2-24-15

High Road Sells All Current Electrical Sales

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High Road Capital Partners has sold its portfolio company All Current Electrical Sales to EBSCO Industries.  This marks the fourth exit for the firm’s debut fund, High Road Capital Partners Fund I, LP.  High Road acquired All Current in September 2008.

All Current is a wholesale reseller of electrical parts and components used in heavy duty industrial, infrastructure, and energy applications, including conduit fittings, circuit breakers, motor control systems, and wiring devices. The company is headquartered in near Philadelphia in Pennsauken, NJ (www.allcurrent.com).

“During High’s Road ownership, All Current’s revenue grew by 58 percent and the company established a significant national presence,” said Bob Fitzsimmons, High Road’s Managing Partner. “All Current exemplifies our strategy of buying niche leaders and working with management to build bigger, more efficient, and qualitatively better businesses.  In partnership with All Current, we executed our value creation strategy by completing three add-on acquisitions, implementing IT systems upgrades, and enhancing sales and marketing capabilities.”

All Current was acquired by EBSCO Capital, an investment division of EBSCO Industries.  EBSCO Capital, with $300 million in committed equity capital, acquires middle market companies that have EBITDAs from $5 million to $20 million.  Sectors of interest include business services, manufacturing, distribution, consumer products, information services, outdoor products, promotional products, and risk management. EBSCO Capital is based in Birmingham, AL (www.ebscocapital.com).  EBSCO Industries is a privately held company with 40+ businesses and over $2 billion in annual revenues. The company was founded in 1944 by Elton B. Stephens and is based in Birmingham, AL (www.ebscoind.com).

High Road Capital Partners invests in manufacturing, service, or value-added distribution businesses with revenues of $10 million to $100 million and EBITDAs of $3 million to $10 million.  High Road has now completed 34 transactions – 12 platform investments, 18 add-on acquisitions and four exits – since its founding in 2007.  The firm most recently exited Handi Quilter in December 2014.  High Road is based in New York (www.highroadcap.com).

High Road partners Jeff Goodrich, Bill Hobbs and Ben Schnakenberg led the All Current investment team. Piper Jaffray was the financial advisor to All Current and Jones Day provided legal counsel.

© 2015 PEPD • Private Equity’s Leading News Magazine • 2-24-15

Genstar Adds-On Again to Pretium Packaging

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Pretium Packaging, a supplier of blow molded packaging and a portfolio company of Genstar Capital, has acquired Intertech Corporation, a manufacturer of stock, custom, and proprietary plastic bottles.  Genstar acquired Pretium Packaging from Castle Harlan in June 2014.

Intertech provides blow molded high-density polyethylene (HDPE) products and containers to the specialty chemical, personal healthcare, institutional, household products, automotive, and agricultural products markets. Intertech also offers design services, in-line decorating, warehousing, and shipping.  The company was founded in 1974 by Jack Worsham and is headquartered in Greensboro, NC (www.intertechcorp.com).

“The acquisition of Intertech gives Pretium our first location in North Carolina and a great team that will enable us to leverage that location to better serve customers in the region,” said George Abd, President and CEO of Pretium.

Pretium Packaging is one of the nation’s largest manufacturers of customized, high performance rigid plastic bottles and containers. The company has capabilities in all major resin types and manufacturing processes and is primarily focused on customers with small-to-medium volume requirements. Pretium sells its products to a customer base of over 700 companies, ranging from Fortune 500 companies to smaller privately-owned businesses in the food & specialty beverage, private label, pharmaceutical, personal care and household & industrial sectors.  Pretium is headquartered near St. Louis in Chesterfield, MO (www.pretiumpkg.com).

“The acquisition of Intertech is Pretium’s second strategic acquisition in the past 3 months and is the next step in our strategy to build Pretium both organically and through selective acquisitions,” said David Golde, a Principal at Genstar Capital.  In December 2014, Pretium acquired Tri-Delta, a manufacturer of containers, bottles, and closures used in the food, healthcare, and household chemicals end markets.  “Intertech represents a highly strategic acquisition for Pretium,” said Mr. Golde.  “As part of our growth strategy with Pretium, we continue to have a strong interest in additional acquisitions that help Pretium better serve its existing customers and gain new customers.”

Genstar Capital invests from $50 million to $400 million in middle-market companies that have enterprise values from $50 million to $1 billion and EBITDAs greater than $15 million.  Genstar manages approximately $3 billion of committed capital and targets investments in the industrial technology, financial services, software, and healthcare industries.  The firm was founded in 1988 and is based in San Francisco (www.gencap.com).

Mesirow Financial served as financial advisor to Intertech Corporation.

© 2015 PEPD • Private Equity’s Leading News Magazine • 2-24-15

Solis Capital Acquires EnviroGard

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LEHR, a portfolio company of Solis Capital Partners, has acquired EnviroGard – a provider of propane fuel system technology for small engines – from Onyx Environmental Solutions.

EnviroGard manufactures and supplies propane fuel systems and engines for use in a variety of industrial applications.  The company sells its products through a network of dealers that perform aftermarket repowers and conversions of gasoline engines to propane.  The company is headquartered in Charlotte, NC (www.envirogard.com).

LEHR, acquired by Solis in September 2014, is a manufacturer of propane powered outboard marine engines.  The company is headquartered in Los Angeles (www.golehr.com).  “EnviroGard is the perfect strategic fit for LEHR, as it complements our current propane engine technology and expands our footprint from marine into industrial and lawn & garden applications,” said Captain Bernardo Herzer, founder and CEO of LEHR.

Solis Capital Partners invests from $2 million to $25 million in companies with revenues between $15 million and $100 million that operate in the business services, niche manufacturing, and software sectors. Target companies are typically headquartered in the Western United States. Solis is actively investing through Solis Capital Partners II which closed in May 2013.  The firm has offices in Newport Beach and San Diego (www.soliscapital.com).

© 2015 PEPD • Private Equity’s Leading News Magazine • 2-24-15