Archives for September 1, 2015

Aterian Acquires Backyard Discovery from Baird

by

Aterian Investment Partners has acquired Backyard Discovery, one of the largest designers, manufacturers, distributors and installers of playsets in North America, from Baird Capital which acquired the company in February 2007.

“We are excited to acquire Backyard Discovery, not only for its clear leadership position in the playset market but also for its diverse product offerings including sheds, playhouses and patio products,” said Michael Fieldstone,  a Principal at Aterian,  “We look forward to partnering with the management team in its next stage of growth.”

Backyard Discovery designs and manufactures consumer products including swing sets, playhouses, patio products and sheds under brands such as Backyard Adventures™, Leisure Time Products™, ShedsUSA™ and Home Brands™.  The company maintains a network of over 3,000 installers who assemble its playsets, sheds, fitness equipment, recreational equipment, outdoor grills, and patio furniture. Backyard Discovery sells its products and services through in-store and online retailers, such as Wal-Mart, Sam’s, Home Depot, BJ’s, Dick’s Sporting, Toys “R” Us and Amazon.  Backyard Discovery, founded in 1968, has approximately 309 employees and is headquartered in Pittsburg, KS (www.backyarddiscovery.com).

Aterian Investment Partners invests in small-to-middle market businesses with $25 million to $500 million in revenues that are underperforming, turnarounds or otherwise unique situations. Industries of interest include consumer products; food and beverage; retail; restaurants; health care services; manufacturing; distribution; metals and mining; industrials; and chemicals & commodities. The firm will consider both control and non-control investments. Aterian is based in New York (www.aterianpartners.com).

“We view Aterian as the right team to partner with the existing members of Backyard to help lead the company as we expand our existing product lines and services,” said Ron Scripsick, CEO of Backyard Discovery.  “We are excited to partner with Aterian and view this as an opportunity to expand on the existing platform of the company.”

TM Capital (www.tmcapital.com) – an investment banking firm with offices in New York, Boston and Atlanta – served as financial advisor to Backyard Discovery.

© 2015 PEPD • Private Equity’s Leading News Magazine • 9-1-15

Resilience Acquires Porter’s Group

by

Resilience Capital Partners has acquired Porter’s Group, a provider of metal fabrication services to the security, military, mining, heavy equipment and trucking industries.

Porter’s Group (DBA Porter’s Fabrications) manufactures fabricated metal parts.  Products include grill faces, control panels, heavy equipment doors and brackets, ATM vaults and cash dispensers, and a wide variety of other fabricated metal parts.  The company has approximately 470 employees and is headquartered in Bessemer City, NC with four production facilities in North Carolina, South Carolina and Virginia (www.portersfab.com).

“We are look forward to working with the management team of Porter’s to continue evolving the business into a world class leader in metal fabrication solutions,” said Bassem Mansour, Co-CEO of Resilience.

Porter’s Group was sold to Resilience by Charles Saleh, Porter’s CEO and majority shareholder.  “It has been a pleasure working with the whole Resilience team over the past several months. They clearly differentiated themselves with their understanding of the business. I feel they have the necessary resources to take Porter’s to a new level of excellence,” said Mr. Saleh.

Resilience specializes in investing in middle market companies with $25 million to $250 million in revenues across a range of industries. Since its founding in 2001, Resilience has acquired 48 companies under 26 platforms with over $2 billion in revenues. The firm is based in Cleveland (www.resiliencecapital.com).

“With its wide range of capabilities, Porter’s differentiates itself from its competitors and is uniquely positioned for future growth alongside our blue-chip customer base,” said Ki Mixon, a Partner at Resilience.

© 2015 PEPD • Private Equity’s Leading News Magazine • 9-1-15

Taglich and Ironwood Acquire Hobbs

by

Taglich Private Equity and Ironwood Capital have acquired Hobbs Bonded Fibers from its founder Carey Hobbs.

Hobbs Bonded Fibers is a manufacturer of specialty nonwoven products that are used in industrial and consumer applications, with a specific focus on the automotive and quilt batting markets. Quilt batting is used in sewing and quilting projects as a layer of insulation between fabrics.  In automotive applications, quilt batting is used as sound-muffling insulation in dashboards, trunks and headliners.  Hobbs’ automotive customers include Volkswagen, Mercedes-Benz, Tesla and Ford.  Hobbs is headquartered in Waco, TX and operates seven manufacturing lines producing over 32 million pounds of synthetic and natural fiber annually (www.hobbsbondedfibers.com).

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).

“Hobbs is an attractive investment for us,” said Dickson Suit, managing director at Ironwood Capital. “Its diversified product line and partnerships with industry-leading companies in the development of custom products creates a runway for growth.”

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).

© 2015 PEPD • Private Equity’s Leading News Magazine • 9-1-15

Riverside Acquires Arrowhead from Pfingsten

by

The Riverside Company has purchased Arrowhead Electrical Products, a supplier of aftermarket, non-discretionary parts and components for a wide variety of motorized vehicles, from Pfingsten Partners which acquired the company in October 2011.

Arrowhead Electrical Products (AEP) has approximately 75,000 SKUs including starters, clutches, driveline components, alternators, generators, suspension parts, gasket kits, and other components.  The company serves more than 6,000 customers across a number of different end markets, including powersports, agricultural & industrial, outdoor power equipment, marine, and automotive & heavy duty. AEP has 200 full-time employees and is headquartered north of Minneapolis in Blaine, MN. The company has six distribution centers in the US, one each in Canada and the UK, and sourcing offices in India and China (www.aep.com).

Under Pfingsten ownership, AEP completed an extensive add-on acquisition program to expand its product offering and geographic reach. The add-ons included  Outdoor Power Xtreme Equipment (Boca Raton, FL); Winderosa Manufacturing and Distributing (Peru, ME); Boston Auto Electric (Downsview, ON); Atlantic Quality Parts (Jacksonville, FL); Power Sport Industries (New Berlinville, PA); Superior Distribution Center (Modesto, CA); and Hi-Level Enterprises (Doncaster, UK).

According to Riverside Partner Steve Dyke, AEP will continue to actively seek add-on acquisition opportunities in the automotive aftermarket.  “AEP has thrived under the leadership of CEO Jim Wisnoski and a strong management team due to its customer-centric focus.  The company has consistently expanded its product line through both new product development and acquisitions.  We are excited to partner with the AEP team to build upon their strong track record of growth and deliver even more high quality products.”

The Riverside Company is a global private equity firm focused on investing in and acquiring growing businesses valued at up to $300 million (€200 million in Europe). Since its founding in 1988, Riverside has invested in more than 400 transactions. The firm’s international portfolio includes more than 80 companies. Riverside is headquartered in New York with additional offices in Atlanta, Chicago, Cleveland, Dallas, Los Angeles, San Francisco, and London (www.riversidecompany.com).

Working with Mr. Dyke on the transaction for Riverside were Principal Rob Langley, Senior Associate Alex Treece, Associate Phillip Furbay, Operating Partner Steve Stubitz, and Managing Director Brian Bunker. Origination Principal Jim Butterfield sourced the transaction.  Anne Hayes, a Riverside partner, led the financing of the transaction which was provided by Ares Capital (www.arescapitalcorp.com) and Varagon Capital Partners (www.varagon.com).

Pfingsten Partners invests in middle market manufacturing, distribution and business services companies.  Since its founding in 1989, Pfingsten has raised four investment funds with total commitments of approximately $1 billion.  The firm is based in Chicago with additional offices in India and China (www.pfingsten.com).

© 2015 PEPD • Private Equity’s Leading News Magazine • 9-1-15

Patriot Capital Backs Milestone Buy

by

Patriot Capital has provided subordinated debt to Aztec/Shaffer, a party and event equipment rental company, to support the July 2015 acquisition of the company by Milestone Venture Group from Todd Johnson who has owned the company since 1995.

Aztec/Shaffer operates through two divisions – Aztec Events & Tents (AET) and Shaffer Sports & Events (SSE). AET – based in Houston – supplies event rental items (everything from tents to flatware) to corporate and private clients in the greater Houston area (www.aztecusa.com).  SSE – based in Birmingham, AL – provides rental equipment such as temporary structures, seating and interior furnishings to PGA Tour and Champions Tour events under an exclusive contract (www.shaffersports.com).

Patriot Capital invests senior and subordinated debt and equity in small and medium-sized privately-held companies that have annual revenues of $10 million to $200 million. Investment sizes range from $3 million to $20 million.  Patriot Capital has offices in Baltimore, Chicago and Dallas (www.patriot-capital.com).  Managing directors Patrick Hamner and Dan Yardley led the transaction for Patriot Capital.

Milestone Venture Group invests from $5 million to $30 million of equity in companies that have enterprise valuations from $20 million to $100 million. The firm was founded in 1997 by its Managing Director Kelly Williams and is headquartered in Houston (www.milestonevg.com).

Latek Capital – an investment bank that specializes on transactions in the equipment rental industry –  advised Aztec/Shaffer. Latek Capital is based north of Chicago in Lake Forest, IL (www.latekcapital.com).

© 2015 PEPD • Private Equity’s Leading News Magazine • 9-1-15