March 16, 2015
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Archives for March 16, 2015

North Castle and Glencoe Exit Flatout

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flatout nf1North Castle Partners and Glencoe Capital have sold Flatout – a manufacturer and marketer of flatbreads and flatbread products – to T. Marzetti Company, a subsidiary of Lancaster Colony Corporation (NASDAQ: LANC) for a price of $92 million.  North Castle and Glencoe acquired Flatout in 2010.

Lou Marinaccio nf1According to North Castle the transaction represents another successful exit in the nutrition sector. “The growth of Flatout and its sale to T. Marzetti Company is another example of North Castle’s strategy to partner with accomplished entrepreneurial management teams to build high-growth brands that are of significant value to strategic buyers,” said Lou Marinaccio, a North Castle Managing Director. “By leveraging our prior experience with nutrition and food & beverage companies, such as Naked Juice, EAS, and Atkins Nutritionals, we believe that North Castle in partnership with Flatout’s leadership team developed a company, brand, and product portfolio that are well positioned for growth for many years to come.”

Flatout is a manufacturer and marketer of flatbreads and flatbread products sold under its own brand to a diverse and multi-channel customer base.  Flatout’s annual net sales for the twelve months ended December 31, 2014 were approximately $46 million.  The company was founded in 2000 by Stacey and Mike Marsh and is headquartered west of Detroit in Saline, MI (www.flatoutbread.com).

“North Castle’s experience in the food & beverage and nutrition markets, coupled with its brand building and operating capabilities were instrumental in helping us grow Flatout,” said Stacey Marsh, Co-Founder and President. “I am excited for Flatout to be part of the T. Marzetti family as we continue to drive the growth of the brand and continue our history of innovation in the category.”

North Castle makes control investments in consumer-driven product and service companies located in North America with enterprise values ranging from $50 million to $500 million.  Sectors of interest include: beauty & personal care; consumer health; fitness, recreation & sports; home & leisure; and nutrition. North Castle is headquartered in Greenwich, CT (www.northcastlepartners.com).

“As a private equity firm that has focused on consumer businesses that promote health and wellness for more than 15 years, we continue to look for opportunities across the healthy, active and sustainable living market to leverage our knowledge, network and experience in building market leaders like Flatout,” said Mr. Marinaccio.

Glencoe Capital makes acquisitions and growth equity investments in lower-middle market companies that have EBITDAs between $3 million and $15 million. The firm has completed over 45 acquisitions, representing over $ 1.6 billion in transaction value. The firm currently manages three funds: the Glencoe Capital Michigan Opportunities Fund, Glencoe Capital Partners III, and Glencoe Capital Partners II. Founded in 1993, Glencoe Capital has offices in Chicago and in the Detroit suburb of Birmingham (www.glencap.com).

The buyer of Flatout, Lancaster Colony Corporation, is a manufacturer and marketer of specialty food products for the retail and foodservice markets and has annual revenue of approximately$1 billion. The company is headquartered in Columbus, OH (www.lancastercolony.com).

“We are very excited to add Flatout flatbreads to our specialty foods business as a better-for-you branded retail product with extraordinary taste, nutritional advantages and convenient versatility for most every eating occasion,” said Bruce Rosa, President of T. Marzetti Company.  “Since introducing their first flatbread wraps to retailers in 2000, Flatout has continued to pioneer the on-trend and growing flatbread category as consumer preferences have shifted towards more healthy living and nutritional awareness.  With placement in the supermarket deli department, Flatout’s product offerings include unique oval-shaped flatbread wraps, the successful Foldit® line of artisan flatbreads and the recently-introduced Artisan Thin pizza crust.”

Lincoln International served as financial advisor to North Castle and Flatout on this transaction.  Lincoln specializes in merger and acquisition advisory services, debt advisory services, private capital raising and restructuring advice on mid-market transactions. The firm also provides fairness opinions, valuations and pension advisory services on a range of transaction sizes. Lincoln has sixteen offices in the Americas, Asia and Europe and is headquartered in Chicago (www.lincolninternational.com).

© 2015 PEPD • Private Equity’s Leading News Magazine • 3-16-15

HGGC and Charlesbank Exit Citadel Plastics

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citadel nf1HGGC and Charlesbank Capital Partners have signed an agreement to sell their portfolio company Citadel Plastics to strategic buyer A. Schulman for $800 million. The transaction is expected to close before the end of May 2015.

Citadel is a North American specialty engineered plastics company that produces thermoset composites and thermoplastic compounds for specialty product applications in the transportation, industrial & construction, consumer, electrical, energy and healthcare & safety industries.  In 2014, Citadel had approximately $525 million of pro-forma revenue and pro-forma EBITDA of approximately $75 million. The company has 1,200 employees and operates 21 manufacturing facilities throughout the world, including 10 thermoplastic facilities in the United States and Canada, and 11 thermoset composite plants comprising seven in North America, one in Germany, one in Brazil, and a joint venture consisting of two plants in China.  Citadel is based in West Chicago, IL (www.citadelplastics.com).

Citadel was acquired by HGCC and Charlesbank in March 2012 from Wind Point Partners which in turn had acquired the company in March 2007 and completed six add-on acquisitions during its term of ownership.

During HGGC’s and Charlesbank’s ownership, and in partnership with Citadel management, the company has expanded its capabilities, geographic reach and customer base through both organic growth and strategic acquisitions. Citadel added Lucent Polymers in 2013 and The Composites Group in late 2014. These acquisitions added more than 1,300 customers and over 2,000 products that has grown revenues 70 percent since the initial investment.

Gary Crittenden nf1“We are extremely proud of the transformation that has taken place at Citadel over the past three years,” said Gary Crittenden, Chairman of HGGC, who also serves as Chairman of Citadel. “Together with Mike Huff and his management team, we have built very attractive industry leading platforms in engineered composites and thermoplastics through important strategic acquisitions, resulting in an outstanding outcome for our investors.”

In addition to the acquisitions, during HGGC’s and Charlesbank’s ownership Citadel made significant strategic improvements. These include launching an industry-focused go-to market strategy, investing in sales resources, implementation of a common operating discipline across the portfolio, and enhanced management of margins and expenses, which collectively strengthened the business.

HGGC makes leveraged buyout, recapitalizations and growth equity investments in middle market companies. The firm invests from $25 million to $100 million in equity per transaction in companies that have revenues of $100 million or more, enterprise values of $100 million to $500 million, and EBITDA of $15 million or more.  HGGC is based in Palo Alto (www.hggc.com).

The sale of Citadel, in which HGGC has a controlling interest, marks HGGC’s seventh exit of 11 middle market platform investments made out of its $1.1 billion debut fund and is the firm’s first transaction of 2015 after completing 10 transactions last year. Earlier this month HGGC announced the closing of its $1.33 billion second fund.

Charlesbank Capital Partners, HGGC’s partner on this investment, pursues management-led buyouts and growth capital financings, typically investing from $50 million to $150 million per transaction in companies with enterprise values of $100 million to $750 million. The firm has $3 billion of capital under management and has offices in Boston and New York (www.charlesbank.com).

Brandon White nf1“With the tremendous advancements that Citadel has made during our investment, the company is strongly positioned for continued growth,” said Brandon White, Managing Director of Charlesbank, who also serves on the Board of Citadel. “We are proud to have partnered with the team during this extraordinary period and wish them every success in their next chapter.”

A. Schulman, the buyer of Citadel, is an international supplier of high-performance plastic compounds, powders and resins. The company had net sales of approximately $2.5 billion for the fiscal year ended August 31, 2014. A. Schulman was founded in 1928 and is headquartered near Akron in Fairlawn, OH (www.aschulman.com).

© 2015 PEPD • Private Equity’s Leading News Magazine • 3-16-15

Riverside Partners Sells ITC Global

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itc global nf1Riverside Partners has signed an agreement to sell its portfolio company ITC Global – a provider of satellite communication services – to Panasonic Avionics.

Riverside Partners has owned ITC Global since 2011. During its ownership term the company experienced a period of expansion, quadrupling sales through a combination of organic growth, new customer additions and add-on acquisitions.

Today, ITC Global is a provider of satellite communication services for the energy, mining, and maritime markets.  The company was founded in 2001 and has regional headquarters in Houston, TX; Sion, Switzerland; and Perth, Australia.  ITC Global serves customers at more than 1,200 remote sites across 70 countries and all the world’s oceans (www.itcglobal.net).

“Panasonic’s acquisition of ITC Global highlights the natural alignment of customers across the aviation, energy, mining and maritime markets, all of whom require mobile broadband, high reliability, global coverage and responsive customer service,” said Paul Margis, President and Chief Executive Officer of Panasonic Avionics.  “ITC Global is a proven leader and we share a common passion for excellent customer service.  Together, we look forward to taking satellite communications services to a new level of value and performance.”

Riverside Partners invests in established and growing middle market healthcare and technology-oriented companies that have revenues from $20 million to $200 million and EBITDA’s from $5 million to $25 million. Riverside Partners is currently investing its fifth fund, Riverside Partners Fund V, LP, with $561 million of capital commitments. The firm was founded in 1989 and is based in Boston (www.riversidepartners.com).

Panasonic Avionics Corporation is a supplier of in-flight entertainment and communication systems. The company’s systems integrate with the cabin enabling airlines to deliver travel experiences with a rich variety of entertainment choices.  Panasonic Avionics Corporation was established in 1979 and is headquartered in Lake Forest, CA.  The company has over 4,100 employees and operations in 80 locations worldwide (www.panasonic.aero).

Panasonic Corporation is a developer and engineer of electronic technologies and solutions for customers in residential, non-residential, mobility and personal applications. Since its founding in 1918, the company has expanded globally and now operates around 500 consolidated companies worldwide, recording consolidated net sales of 7.74 trillion yen for the year ended March 31, 2014.

Centerview Partners (www.centerview.com) acted as Panasonic’s exclusive financial advisor. 

© 2015 PEPD • Private Equity’s Leading News Magazine • 3-16-15

Garrison Receives Approval for SBIC License

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garrison capital nf1Garrison Capital SBIC, a wholly-owned subsidiary of business development company Garrison Capital (NASDAQ:GARS), has received final approval for a license from the United States Small Business Administration to operate as a Small Business Investment Company.

“We are very pleased to have received approval for an SBIC license for Garrison Capital and we would like to thank everyone at the SBA who diligently worked on our application and ultimately supported our approval,” said Brian Chase, Chief Financial Officer of the company. “The SBIC will allow us to significantly expand our balance sheet and provide the company with an opportunity to increase its return on equity to shareholders.”

Garrison Capital is a business development company that invests in loans to US based middle-market companies.  The company is advised by Garrison Capital Advisers, an affiliate of Garrison Investment Group, an alternative investment and asset management firm that invests in the debt of middle-market companies, primarily in the areas of corporate finance, real estate finance and structured finance.  Garrison Investment Group was founded in 2007 and is headquartered in New York (www.garrisoncapitalbdc.com) (www.garrisoninv.com).

© 2015 PEPD • Private Equity’s Leading News Magazine • 3-16-15

Marathon Advises Main Street Power on Sale to AES

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marathon nf1Marathon Capital was the exclusive financial advisor to Main Street Power on its sale to The AES Corporation, a Fortune 200 energy company.

Main Street Power is an owner, operator and financier of distributed solar projects and has developed more than 200 commercial projects and several residential platforms across the United States.  Projects have been completed for schools, municipalities, utilities, residential marketers and private-sector commercial entities.  The company has over 60 megawatts of distributed generation solar photovoltaic projects in operation across North America with an additional 100 megawatts in development in the US, Caribbean and Latin America.  Main Street Power was formed in 2009 and is based in Boulder, CO (www.mainstreetpower.com) (www.aesdistributedenergy.com).

terry grant nf1“Marathon Capital was pleased to work with the Main Street Power and AES teams, providing for an orderly transition from private investors to a balance sheet sponsored business, capable of continuing its growth in both the solar residential and commercial and industrial market space,” said Terry Grant, Managing Director of Marathon Capital. “Overall, the solar space is hot.  These transactions are not easy, but there is an appetite among traditional energy players to ensure they are not left out of forward facing market models.  We are optimistic that this will not be the last transformative platform transaction this year.”

Marathon Capital is a financial advisory and investment banking firm that provides financial advice in the areas of M&A, capital raising of debt and equity, project finance, tax equity, financial restructuring, recapitalization, bankruptcy and workout situations in the energy sector. The firm is headquartered in the Chicago suburb of Bannockburn, IL and has additional offices in New York and San Francisco (www.marathon-cap.com).

The AES Corporation provides energy to 18 countries through a portfolio of distribution businesses as well as thermal and renewable generation facilities. The company has approximately 18,500 employees and 2014 revenues were $17 billion.  AES is based in Arlington, VA (www.aes.com).

“As part of AES, we see tremendous opportunity to build on and grow the environmental, economic and social benefits that distributed solar generation brings to the communities, homeowners, schools, municipalities, businesses and utilities,” said Amory Host, President and CEO, of Main Street Power.

© 2015 PEPD • Private Equity’s Leading News Magazine • 3-16-15

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