Archives for May 1, 2015

Arbor Sells Gold Standard Baking to Tricor Pacific

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Arbor Investments has completed the sale of its Fund II portfolio company, Gold Standard Baking, to Tricor Pacific Capital.  The sale of Gold Standard provided Arbor with a 9.4x gross return on its investment.

Gold Standard is a manufacturer of frozen laminated dough products sold through grocery retailers, foodservice distributors, quick serve restaurant chains, commissaries and convenience stores throughout North America.  The company is headquartered in Chicago (www.goldstandardbaking.com).

Gold Standard was founded in 1987 and was acquired by in 2001 by brothers Yianny and George Caparos.  Arbor partnered with the Caparos brothers and acquired Gold Standard Baking in June 2008.  Immediately, Arbor began a growth plan backed by a $40 million investment in equipment and facilities that transformed the company into the largest manufacturer of high-quality specialty croissants and strip Danish products in the United States. Today, Gold Standard Baking makes more than 100,000 croissants an hour or more than 10 million each week.

“Yianny and George Caparos were extraordinary partners.  The Arbor and Gold Standard teams worked closely during our partnership and significantly expanded production capacity and product capability.  The Caparos brothers executed our strategic vision flawlessly.  We were very fortunate to work with entrepreneurs of such high integrity, unmatched baking expertise and superior management skill,” said Arbor’s President and Co-Founder, Joseph Campolo.

Arbor invests in the food & beverage and related industries. The firm has acquired or invested in over 41 food & beverage companies in North America and currently has $700 million of assets under management across three funds. Arbor was founded in 1999 and is based in Chicago (www.arborpic.com).

“Arbor has been an inestimable partner during Gold Standard’s period of tremendous growth providing the company with needed capital, human resources and strategic direction.  Without the symbiotic Arbor relationship, Gold Standard would not be the success it is today,” said Yianny Caparos.

“Incredibly, during our 8-year ownership, Gold Standard Baking quadrupled in size and Fund II, inclusive of cash proceeds received in connection with two dividend recaps during our ownership period, realized a 9.4x gross return on its investment,” said Mr. Campolo.

According to James Gold, an outside director of the company and a food industry veteran, Arbor is one of the top investors in the food industry.  “I’ve been involved in the food industry for 35 years.  The Gold Standard Baking investment exemplifies why Arbor is the foremost private equity food investor in the United States.

Tricor Pacific Capital – the buyer of Gold Standard Baking – invests in middle-market companies with enterprise values from $25 million to $250 million in the manufacturing, service, distribution and consumer product sectors that are located in the west and mid-west regions of Canada and the United States. The firm currently manages approximately $1 billion of capital and is investing its fourth fund with $555 million in committed capital. Tricor Pacific was founded in 1996 and is headquartered in Vancouver with an additional office in Chicago (www.tricorpacific.com).

William Blair acted as exclusive financial advisor to Arbor in connection with the transaction and DLA Piper served as Arbor’s legal counsel.

2015 PEPD • Private Equity’s Leading News Magazine • 5-1-15

Berkshire Partners to Acquire Implus

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Berkshire Partners has signed an agreement to acquire a majority equity interest in Implus Corporation, currently a portfolio company of Trilantic North America.  The Implus management team – led by CEO Seth Richards and President Todd Vore – is co-investing alongside Berkshire in this transaction.

Implus is a supplier of insoles, shoe care products, performance socks, home fitness and other wellness products to the footwear, fitness and recreational accessories categories.  Implus’ products are sold under the following brand names: Sof Sole, Yaktrax, apara, Airplus, Sneaker Balls, Sof Comfort, Little Hotties, Perfect, TriggerPoint and ICETrekkers. Through its network of retail partners, the company’s products are distributed to over 75,000 retail outlets across North America and in over 70 countries worldwide. Implus is headquartered in Durham, NC (www.implus.com).

“We are excited to begin our partnership with Berkshire Partners,” said Mr. Richards. “We appreciate Trilantic’s support during a transformative part of our company’s growth and believe this new development will ensure our ability to continue providing retailers with an innovative selection of high quality products and the superior customer service for which we strive every day.”

Berkshire Partners invests from $50 million to $500 million of equity capital in mid-sized companies operating in the following sectors: consumer products and retail, business services, industrials, communications, and transportation.  The firm is currently investing from Berkshire Fund VIII, a $4.5 billion fund raised in 2011. Berkshire Partners was founded in 1986 and is based in Boston (www.berkshirepartners.com).

“Implus is the leader in the segments in which it operates and is clearly a valued vendor to its retailers,” said Dave Bordeau, Managing Director of Berkshire Partners. “We believe the breadth of opportunity for organic and acquisition-driven growth is compelling. We look forward to working with Seth and Todd and the rest of the Implus team to support the next phase of the company’s development.”

“We would like to thank Seth, Todd and the rest of the team at Implus for their dedication in building the company throughout the duration of our partnership,” said Jamie Manges, Partner at Trilantic North America. “We look forward to their next chapter of success as they embark on their new relationship with Berkshire Partners.”

Trilantic Capital Partners makes control and significant minority investments in North America and European companies that have enterprise values of $100 million to $1 billion. Sectors of interest include business services, consumer, energy, financial services and media & telecommunications sectors. Trilantic currently manages four institutional private equity funds with aggregate capital commitments of $5.6 billion. The firm is based in New York (www.trilantic.com). Trilantic was formed in 2009 by the former principals of Lehman Brothers Merchant Banking.

Robert W. Baird & Co. acted as the financial advisor to Implus and Kirkland & Ellis served as legal counsel to the company and Trilantic North America. Ropes & Gray served as legal counsel to Berkshire Partners.

2015 PEPD • Private Equity’s Leading News Magazine • 5-1-15

Fulcrum Exits Nuheat Industries

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Fulcrum Capital Partners has sold its portfolio company Nuheat Industries, a manufacturer of electric radiant floor heating systems and outdoor freeze protection products, to Pentair.

Fulcrum’s third fund (Fund III) acquired its interest in Nuheat in March 2008. During the course of its ownership, Nuheat expanded its market position by investing in new product development, increased adoption rates by investing in sales personnel, and initiated marketing and public relations activities typically not seen in the industry.  Fulcrum also completed an add-acquisition for Nuheat that expanded its freeze protection product portfolio.  Nuheat is headquartered in Vancouver, BC (www.nuheat.com).

Pentair (NYSE:PTR) is a diversified industrial company serving the food, water and energy industries. The company has approximately $7 billion in annual revenue. Pentair is headquartered in Worsley, UK with its main US office located in the Minneapolis suburb of Arden Hills, MN (www.pentair.com).

Fulcrum Capital Partners manages over C$675 million of capital and invests both equity and subordinated debt in companies with revenues of C$10 million to C$250 million. Sectors of interest include services, manufacturing, consumer products, distribution, food and retail. Fulcrum Capital Partners was formed in 2011 as the successor to HSBC Capital (Canada) Inc. when current management acquired the private equity and mezzanine business of HSBC Bank Canada.  The majority of Fulcrum’s eight partners have worked together for over a decade. During this period at Fulcrum and its predecessor firm, the partners have invested in 38 companies and realized 25 exits, generating a gross return on cash invested of 3.3x and a gross IRR of 28.7%.  Fulcrum has offices in Vancouver and Toronto (www.fulcrumcapital.ca).

Fund III has made 11 investments and the sale of Nuheat represents the ninth fully realized investment in that fund.  To date, Fund III has generated a return of three times invested capital.

Lazard Middle Market (www.lazardmm.com) was the exclusive financial advisor to Nuheat for this transaction.

2015 PEPD • Private Equity’s Leading News Magazine • 5-1-15

Oxford Ups Term Loan to Edgemont Pharmaceuticals

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Oxford Finance has closed on $5 million of new debt as an expansion to its existing $10 million senior secured term loan agreement with Edgemont Pharmaceuticals.  The new capital will be used to fund the working and growth capital needs of the company .

Edgemont Pharmaceuticals is a privately held specialty pharmaceutical company focused in the field of psychiatry.  Edgemont has two FDA approved antidepressant products commercialized in the US and a Phase III product candidate being developed for treatment of generalized anxiety disorder. The company is headquartered in Austin (www.edgemontpharma.com).

“Oxford is pleased to provide additional financing to Edgemont Pharmaceuticals,” said Christopher Herr, senior managing director for Oxford Finance. “The company has been successful with both of its commercial assets, Forfivo XL and Fluoxetine 60mg tablets, and has been making significant progress with its clinical program.”  Both Forfivo XL and Fluoxetine are prescribed for the treatment of major depressive disorders.

Oxford Finance, a subsidiary of Sumitomo Corporation, is a specialty finance firm providing senior secured loans to public and private life science and healthcare services companies worldwide. In recent years, Oxford has originated over $2 billion in loans, with lines of credit ranging from $500,000 to $75 million. Oxford is headquartered in Alexandria, VA with additional offices in California, Massachusetts and North Carolina (www.oxfordfinance.com).

“We are extremely grateful to Oxford for its ongoing support of our growth initiatives and appreciate the additional working capital they are providing us through this loan expansion,” said Douglas Saltel, chief executive officer of Edgemont Pharmaceuticals. “Oxford is clearly proving to be a great business partner.”

2015 PEPD • Private Equity’s Leading News Magazine • 5-1-15