Archives for April 1, 2015

Blackthorne Acquires Fireplace Door Maker

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Design Specialties, a maker of fireplace doors and screens, has been acquired by Blackthorne Partners in partnership with investor and operator Michael Draves.  The company was sold to the investment group by owner Pat Gengler.

Design Specialties’ products range from lower price doors to one-of-a-kind doors handcrafted by artists.  Products are available in a variety of door styles, glass designs and finishes. The company’s products are sold at specialty hearth retailers throughout the US and Canada. Design Specialties maintains a 40,000 sq. ft. facility in Milwaukee which houses its laser cutting, powder coating, and headquarters operations.  Design Specialties was founded in 1983 (www.glassfireplacedoors.com).

“I was very selective in choosing the new ownership,” said Mr. Gengler.  “I wanted an ownership group who was entrepreneurial, had the owner/operator mentality, had capital to invest and was customer-focused. I wanted someone who understood our culture and our tradition of excellence. I found everything I was looking for with Mike Draves and Blackthorne Partners.”

Mr. Draves, who is now the company’s new President, has wide experience in the consumer products industry. He has held senior positions with Ariens, Sears, Pacific Cycle and Kohler.  “Design Specialties is known throughout the country for its high quality fireplace doors and accessories,” said Mr. Draves.  “Along with strong name recognition among consumers, the company has a strong and loyal dealer network which we will continue to support. I’m looking forward to working with the company’s talented staff to enhance our operations so we remain the market leader known for quality and innovation.”

“Pat Gengler has done a tremendous job growing this company and positioning it as a market leader,” said Steve Balistreri, a Blackthorne Partners managing director. “Our goal is to build upon that success so Design Specialties remains the premier fireplace door company in North America for the long term.”

Blackthorne Partners invests in companies based in the upper Midwest that have $4 million to $15 million in revenues and EBITDA of at least $1 million. Sectors of interest include outsourced business services, light manufacturing, and value-added distribution. Blackthorne Partners is headquartered near Milwaukee in Brookfield, WI (www.blackthornepartners.com).

© 2015 PEPD • Private Equity’s Leading News Magazine • 4-1-15

Huron’s Energy Services Platform Getting Bigger

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Albireo Energy, a platform portfolio company of Huron Capital Partners, has acquired Sky Technologies, a provider of energy and power monitoring systems.

Huron Capital formed its Albireo Energy platform in 2013 by partnering with industry executive Phil Bomrad to make investments in the energy services and smart buildings sectors.  Mr. Bomrad has spent over 20 years in the clean technology and energy efficiency industries. He is the former CEO of Clean Urban Energy, an energy storage and smart grid technology provider (www.qcoefficient.com). Before Clean Urban Energy, Mr. Bomrad led the Energy Services group of Siemens where he launched and built a multimillion dollar energy services business that included energy monitoring, building commissioning, demand response, procurement consulting, and energy efficiency projects.

Sky Technologies installs and manages energy systems for data centers utilized by Fortune 500 companies, financial institutions, technology companies and higher education institutions. The company was founded in 1998 and is headquartered in Alexandria, VA (www.skietech.com).

The buy of Sky Technologies is the fourth acquisition that Albireo Energy has made in the past 10 months, following investments in Energy Options based in Edison, NJ (www.energy-options.com); Electronic Control Systems based in San Diego (www.ecscontrols.com); and Green Total Solutions, also based in San Diego (www.greentotalsolutions.com).

In addition to geographic expansion, Albireo Energy plans to add additional services including centralized facility monitoring, consumption monitoring, energy procurement, and central plant efficiency.

According to Mr. Bomrad, Sky Technologies’ technical services bolster Albireo’s service offerings in energy efficiency and management and are complementary with Albireo’s core of building automation services.  “Sky Technologies has established a reputation for highly effective, highly reliable services in mission-critical applications.  By partnering with Sky Technologies, we have accelerated our entry into enterprise services available across our national footprint,” he said.

Albireo Energy provides building automation and energy services to commercial and institutional buildings across the US.  The company’s service portfolio includes energy efficiency, demand response, energy procurement services and smart building solutions including building automation installations and optimization, systems integration, metering and lighting. The company has offices in San Diego, CA and Edison, NJ (www.albireoenergy.com).

“We are excited to continue to broaden Albireo Energy’s service offerings.  In addition to our planned acquisition growth, we believe there are significant opportunities for organic growth as we integrate Sky Technologies under the Albireo Energy umbrella,” said Jim Mahoney, Partner at Huron Capital.

Huron Capital Partners invests up to $70 million per transaction in middle market companies that have revenues up to $200 million and EBITDAs of $5 million or more. Sectors of interest include education & training, healthcare, specialty chemicals, specialty packaging, consumer products, home decor, business services, industrial manufacturing, food & beverage, and marketing services. The firm was founded in 1999 and currently manages over $1.1 billion in committed equity through four private equity funds. Huron Capital Partners has offices in Detroit and Toronto (www.huroncapital.com).

Albireo Energy is named after the Albireo star, a double star in the constellation of Cygnus. The Albireo star is composed of Albireo A (gold in color) and Albireo B (blue in color).  This double star system is often referred to as the “Partner Star” and is representative of Albireo Energy’s corporate goal of being a partner to its customers.

© 2015 PEPD • Private Equity’s Leading News Magazine • 4-1-15

NewSpring Invests in USPack Logistics

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NewSpring Holdings has invested in USPack Logistics, a provider of same-day and next-day delivery services.

US Pack provides its delivery services in the Northeast, Mid-Atlantic, Midwest and Pacific Northwest regions.  The company services industries that have time sensitive delivery-times particularly the e-commerce, pharmaceutical, and healthcare sectors.  US Pack uses an asset-light model with approximately 550 independent contractor drivers.  The company was founded in 1986 by Peter and Mark Glazman and is headquartered in New York (www.gouspack.com).  The Glazman’s will continue to operate the company in partnership with New Spring.

“We’re thrilled with the opportunity to partner with the Glazmans and the rest of the USPack team,” said James Ashton, NewSpring General Partner. “Under Peter and Mark’s leadership, we look forward to USPack’s continued expansion, leveraging the company’s heritage and market-leading position within the logistics industry. As today’s consumer has come to increasingly expect ‘on-demand’ service models in their professional and personal lives, USPack’s customer service excellence makes the company a standout and will enable them to continually grow and expand.”

NewSpring Holdings focuses on control buyouts and platform builds, targeting companies with between $5 million and $25 million of revenue.  Sectors of interest include business process automation, services, software and niche manufacturing/distribution.  NewSpring Holdings is part of the NewSpring Capital family of funds, a provider of private equity capital focused in the Mid-Atlantic region with over $1 billion of committed capital. The firm has offices in Radnor, PA; Short Hills, NJ; and Washington, DC (www.newspringcapital.com).

“USPack is proud to take this important step with NewSpring, in both ensuring long-term stability for our customers and employees and positioning our organization for future growth,” said Peter Glazman, CEO of USPack. “Together, we’re evolving USPack’s business model to enhance our competitive advantage and accelerate growth. Our entire team is energized and excited about the opportunities this partnership with NewSpring will provide.”

© 2015 PEPD • Private Equity’s Leading News Magazine • 4-1-15

Stone Arch Closes Oversubscribed Fund III

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Stone Arch Capital has held a final close of its third private equity fund, Stone Arch Capital III, LP, with $205 million of capital commitments.

The new fund, which had a target of $175 million, was oversubscribed at its hard cap of $200 million of limited partner commitments and was raised in less than six months.

Stone Arch Capital was founded in 2005 by Charles Lannin and F. Clayton Miller.  Prior to forming Stone Arch, Mr. Lannin served as a general partner at Norwest Equity Partners and Mr. Miller was the Managing Partner of Churchill Equity Partners, the private equity arm of Churchill Capital.

Stone Arch Capital makes equity investments from $10 million to $25 million in Midwest-based lower middle-market companies with revenues from $20 million to $150 million and EBITDA greater than $5 million.  Transaction sizes are generally within the range of $20 million to $100 million.  Sectors of interest include manufacturing and service industries.  Stone Arch Capital is headquartered in Minneapolis (www.stonearchcapital.com).

© 2015 PEPD • Private Equity’s Leading News Magazine • 4-1-15

Clearview Seeks Add-ons for Cosmetic Lab Platform

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Clearview Capital is actively pursuing add-on acquisitions for its portfolio company Northwest Cosmetic Laboratories which it acquired April 2014.

Northwest Cosmetic Laboratories (NCL) is a formulator and manufacturer of cosmetic and skin care products for branded cosmetic and personal care companies. NCL specializes in formulating “physician strength” skincare and prestige cosmetic products which are growing categories benefitting from new ingredient technologies and shifting consumer preferences for anti-aging and other cosmetic or health benefits.  NCL’s products are sold through retail, internet and direct marketing channels. The company is headquartered in Idaho Falls, ID (www.trustncl.com).

According to Clearview, add-on candidates for NCL should have at least $3 million of annual revenue and have operating profit margins in excess of 10%. More general criteria include:

Focus on prestige brands: Companies servicing customers with high-end, prestige beauty and skin care brands. NCL is not seeking companies that own their own brands but rather those that formulate and manufacture products for their customers’ brands.

Complementary product capabilities: Companies producing innovative products in the pressed and loose powder category as well as premium skin care or color cosmetics products are of interest. Other specific areas of interest include hot pour, mascara, lipstick and pencil capabilities.

Sophisticated R&D and technical capabilities: Companies with strong research and development and technical capabilities, as well as a reputation for outstanding quality and regulatory compliance are of interest.  FDA and/or OTC registered companies are preferred.

Geographic expansion:  Companies with a presence in the Eastern US and California would be attractive although other geographies in the US and Canada will also be considered by Clearview.

To discuss potential add-on acquisitions for NCL you can contact any of the following Clearview professionals: Larry Simon, Principal; Jim Tucker, Principal; or Nick Berry, VP, Business Development.

Clearview Capital was founded in 1999 by Jim Andersen and Cal Neider and is headquartered in Old Greenwich, CT with additional offices in Chicago and Los Angeles (www.ClearviewCap.com).

© 2015 PEPD • Private Equity’s Leading News Magazine • 4-1-15

GE and Citizens Refinance Giordano’s

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Giordano’s, the world-famous stuffed pizza restaurant chain based in Chicago and a portfolio company of Victory Park Capital, has secured a $51 million credit facility from GE Capital Franchise Finance and Citizen’s Bank. The new facility refinances existing debt and funds a longer term capital need of the company for restaurant expansion.

Giordano’s is a casual Italian dining business known primarily for its iconic “World Famous Chicago Stuffed Pizza.”  Giordano’s, which filed for Chapter 11 bankruptcy protection in February 2011, was acquired by Victory Park for $61.6 million in November 2011.  Giordano’s currently operates both company owned and franchised restaurants in Illinois, Indiana, and Florida.  The company also sells its pizza nationwide through its website.  Giordano’s was founded in 1974 by Efren and Joseph Boglio and is headquartered in Chicago (www.giordanos.com).

“We were impressed with GE Capital’s proven reputation as one of the largest lenders in the restaurant finance sector and are confident they will offer strategic value to the overall growth strategy for Giordano’s,” said Chad Peterson, principal at Victory Park.  “The latest credit facility will provide Giordano’s with significant flexibility to continue to execute on its development plan.”

GE Capital Franchise Finance is a lender to the US franchise finance market via direct sales and portfolio acquisitions.  The business specializes in financing mid-market operators with multiple stores in the restaurant and hospitality industries (www.gefranchisefinance.com).

Citizen’s Bank is one of the nation’s oldest and largest financial institutions, with $133 billion in assets as of December 31, 2014.  Citizen’s offers a range of retail and commercial banking products and services to individuals, small businesses, middle-market companies, large corporations and institutions. Citizen’s is headquartered in Providence, RI (www.citizensbank.com).

 “The new capital represents the next step in the continued development of our business,” said Giordano’s CEO Yorgo Koutsogiorgas. “We look forward to working with a team as experienced in the franchise sector as GE Capital and believe Giordano’s is well positioned for future growth.”

Victory Park Capital invests from $10 million to $50 million per transaction in small cap public companies and middle market private companies that typically generate less than $150 million in revenue and less than $30 million of EBITDA. The firm focuses on complex situations and seeks to build long term sustainable value in its companies. Victory Park was founded in 2007 and is based in Chicago with additional offices in Boston, New York and San Francisco (www.victoryparkcapital.com).

© 2015 PEPD • Private Equity’s Leading News Magazine • 4-1-15