Archives for October 9, 2015

TorQuest Buys Spinrite from Sentinel

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TorQuest Partners has acquired Spinrite, a large manufacturer of consumer craft yarn, from Sentinel Capital Partners.  Members of the senior management team are co-investing in the company with TorQuest.

Spinrite is the largest producer and marketer of craft yarn in North America and also sells knitting patterns that provide customers with creative ideas for knitted products.  Spinrite products – the company has 4,000 SKUs across more than 100 product families – are sold through mass merchants, craft stores, and independent specialty stores. Brand names include Bernat, Lily, Peaches & Creme, Caron and Phentex.  The company is led by CEO Ryan Newell.  Spinrite was founded in 1952 by David Hay and has approximately 500 employees across its manufacturing and distribution centers in Listowel, ON (headquarters) and east of Raleigh in Washington, NC (www.spinriteyarns.com).

Sentinel has twice been the majority owner of Spinrite.  In January 2004, Sentinel and management acquired Spinrite from the founding Hay family.  It became a publicly traded company in February 2005 with Sentinel retaining a minority interest. In November 2007, Sentinel reacquired Spinrite in a take-private transaction at an enterprise value of C$80 million.

“We have been fortunate to partner with Spinrite’s talented management team that has significantly increased sales since 2008,” said Eric Bommer, a partner at Sentinel. “Spinrite has a highly defensible business model, an exciting growth strategy, and we wish them continued success as they enter their next stage of growth.”

TorQuest, the new buyer of Spinrite,  makes equity investments of C$15 million to C$100 million in companies with enterprise values of C$40 million to C$250 million that are located in Canada and the US.  The firm invests in a range of industries but has a particular interest in manufacturing, business services, financial services, food, consumer products and specialty chemicals. TorQuest was founded in 2002 and has over C$1 billion of equity capital under management. The firm is headquartered in Toronto (www.torquest.com).

“Spinrite is the fifth platform investment for TorQuest Partners Fund III and builds on our strategy of partnering with strong management teams to invest in and build great Canadian businesses.  We look forward to working with Ryan Newell and his team,” said Eric Berke, Managing Partner at TorQuest.

Sentinel Capital Partners invests in middle market companies in the United States and Canada in partnership with management. The firm invests in management buyouts, recapitalizations, corporate divestitures, and going-private transactions of businesses with EBITDAs up to $65 million. Sentinel targets eight industry sectors: aerospace & defense, business services, consumer, distribution, food & restaurants, franchising, healthcare services, and industrials. The firm is headquartered in New York (www.sentinelpartners.com).

“Our long partnership with Sentinel has been highly productive,” said Spinrite CEO Ryan Newell. “Our work together over the past decade has helped refine our business model and well positions us for long term growth.”

Investment banking Robert W. Baird & Co. (www.rwbaird.com) was the financial advisor to Spinrite on the transaction.

© 2015 PEPD • Private Equity’s Leading News Magazine • 10-9-15

Anvil and Ironwood Acquire Air Temp Mechanical

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Anvil Capital and Ironwood Capital have acquired Air Temp Mechanical Services, a full service mechanical contractor.  Anvil Capital was the lead investor and Ironwood, in addition to an equity investment, also provided subordinated debt to the transaction.

Air Temp Mechanical Services specializes in industrial, institutional and commercial buildings.  The company services and maintains large tonnage chillers, variable refrigerant flow air conditioning systems, energy management control systems, industrial boilers and burners.  The company is headquartered southwest of Hartford in Southington, CT (www.ctairtemp.com).

“Partnering with Ironwood Capital and Anvil Capital will provide Air Temp with resources to continue the company’s organic and acquisition growth plan,” said Jeffrey Leone, the President of Air Temp.

Anvil Capital invests in business services and niche manufacturing companies located in the Northeastern US that have revenues of $5 million to $25 million and EBITDA of $1 million to $3.5 million. Target service companies will have at least a 15% EBITDA margin and niche manufacturing targets will have EBITDA margins of at least a 20%. Typical transactions include generational transitions of family businesses, recapitalizations, industry consolidations, and corporate divestitures. The firm is lead by Ben Giess, Managing Partner and Co-Founder; Bob Fortunato, Partner and Co-Founder; and Marc Fontaine, Operating Partner.  Anvil is headquartered in Boston (www.anvilcap.com).

“We are pleased to be able to work with Anvil Capital to provide funding to Air Temp.  The business has an impressive Connecticut customer base and this infusion of capital will create jobs and enable expansion in both existing and new markets,” said Alex Levental, a Managing Director at Ironwood. “Air Temp’s expertise in variable refrigerant flow technology improves HVAC customer energy efficiency up to 30%.  We’re excited to support this kind of green technology.”

Ironwood Capital provides non-control growth capital to middle market companies. Investments take the form of subordinated debt and preferred stock in amounts ranging from $5 million to $20 million to support business owners and financial sponsors in growth financings, full and partial recapitalizations, generational transitions and buyouts.  Ironwood Capital has more than 20 professionals and is headquartered in Avon, CT (www.ironwoodcap.com).

© 2015 PEPD • Private Equity’s Leading News Magazine • 10-9-15

Breakaway Provides Senior and Equity to PM Pediatrics

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Breakaway Capital, through its Breakaway Capital Partners Fund, LP, has provided an $8.4 million senior secured credit facility to PM Pediatrics Management Group. Breakaway also made an equity investment in the company.

PM Pediatrics Management Group (PMP) is a provider of urgent care to children and young adults.  The company operates out of 17 locations in New York, New Jersey and the Washington DC metropolitan area.  PMP is led by its co-founders, Steven Katz and Dr. Jeffrey Schor.  Scopia Capital Management, an investment firm based in New York, is also an investor in the company. PMP is headquartered on Long Island in Lake Success, NY (www.pmpediatrics.com).

“Breakaway is a great capital partner for PM Pediatrics.  We were impressed with their ability to be timely, creative and flexible with respect to our unique financing requirements,” said Mr. Katz.

“By focusing on providing the highest quality pediatric care and patient experience, Jeffrey and Steve have built a unique business and brand and we are proud to help finance the company’s exciting growth opportunities,” said Mike Connolly, a Founding Partner of Breakaway Capital.

Breakaway Capital has $50 million of committed capital under management and provides senior debt, subordinated and mezzanine debt, unitranche structures, structured equity and common equity to companies with up to $5 million of EBITDA.  The firm targets leveraged buyouts, acquisitions, recapitalizations, restructurings and growth capital for both sponsored and non-sponsored transactions. Breakaway Capital Partners was founded by Warren Woo and Mike Connolly and is based in Los Angeles (www.breakawaycap.com).

The PM Pediatrics transaction represents Breakaway Capital’s fifth investment in 2015.  “This transaction is representative of Breakaway’s strategy to provide complete one-stop debt and equity financing solutions for well managed lower middle market companies,” said Mr. Woo.

Scopia Capital Management was founded in 2001 and has approximately $5 billion of assets under management.  The firm is headquartered in New York (www.scopiacapital.com).

“We were very pleased that Breakaway was able to quickly deliver on the terms and structure the company required,” said David Wittels, Partner and Head of Private Equity at Scopia.

© 2015 PEPD • Private Equity’s Leading News Magazine • 10-9-15

Sentinel Capital Partners Sells Hospice Advantage

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Sentinel Capital Partners has sold its portfolio company Hospice Advantage to Compassus, a nationwide network of community-based hospice programs and palliative care services. Sentinel acquired Hospice Advantage in December 2012.  Compassus is a portfolio company of Formation Capital and Audax Group.

Hospice Advantage provides end-of-life care, palliative treatment, personal care, and family support services, primarily to patients in their homes.  The company was founded in 2004 by CEO Rod Hildebrant.  Hospice Advantage is headquartered north of Flint in Bay City, MI and operates more than 60 locations in 14 states throughout the Midwest, Southeast, and South (www.hospiceadvantage.net).

Under Sentinel’s ownership, Hospice Advantage completed 15 add-on acquisitions and opened locations in four new states.  “We are thrilled with our investment in Hospice Advantage and grateful to have been partners with Rod Hildebrant, who is an extraordinarily talented healthcare executive,” said Paul Murphy, a partner at Sentinel. “We have enjoyed working closely with Rod and his highly capable management team, and together, we have developed a leading hospice care organization.”

“We are very excited about what we have achieved with Sentinel as our partner. Sentinel’s support and long-term growth perspective helped us to exceed our goals and now positions us for continued success,” said Mr. Hildebrant. “This is an exciting time for our company, as Hospice Advantage joins with Compassus to create a leading national provider of hospice and palliative care services.”

Sentinel Capital Partners invests in middle market companies in the United States and Canada in partnership with management. The firm invests in management buyouts, recapitalizations, corporate divestitures, and going-private transactions of businesses with EBITDAs up to $65 million. Sentinel targets eight industry sectors: aerospace & defense, business services, consumer, distribution, food & restaurants, franchising, healthcare services, and industrials. The firm is headquartered in New York (www.sentinelpartners.com).

Other Sentinel investments in healthcare services include Interim Healthcare (home healthcare provider); Metro Dentalcare (dental services); National Spine & Pain (pain management healthcare); Northeast Dental Management (dental services); and ReachOut Healthcare America (mobile dental services).

Compassus, the buyer of Hospice Advantage, is a nationwide network of community-based hospice and palliative care services with 150 locations in 28 states.  The company was founded in 1979 and is headquartered in Nashville (www.compassushealthcare.com).

© 2015 PEPD • Private Equity’s Leading News Magazine • 10-9-15

Wynnchurch Invests in Carson Air

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Wynnchurch Capital has an investment in Carson Air, a provider of fixed-wing air ambulance services, air cargo services, and flight school training.

Carson Air provides its air services to customers across western Canada. The company is led by its president and founder Kevin Carson.  Carson Air was founded in 1990 and is headquartered in Kelowna, BC (www.carsonair.com).  “With the support of Wynnchurch, Carson Air is well positioned to pursue strategic growth opportunities. Our management team looks forward to partnering with Wynnchurch to continue to grow our business and enhance service to our existing customers,” said Mr. Carson.

“Kevin Carson and his management team have done an exceptional job of developing a highly regarded, customer-centric aviation business with industry-leading service capabilities,” said Frank Hayes, a Partner at Wynnchurch.  “We are looking forward to working with this experienced group of dedicated managers and support the further growth of their proven business model.”

Wynnchurch Capital makes investments of $10 million to $90 million in middle-market companies that have revenues of $5 million to $500 million. Sectors of interest include niche manufacturing, business and industrial services, energy and power services, logistics, transportation and value-added distribution.

“Carson Air’s position as a market leader in specialty aviation services within Canada, with a reputation for ‘best-in-class’ operations, makes the company an ideal platform investment, with significant opportunity for growth in adjacent markets and new services,” said Morty White, a Managing Director at Wynnchurch.

Wynnchurch Capital was founded in 1999 and is located in the Chicago suburb of Rosemont with additional offices in Detroit and Toronto (www.wynnchurch.com).

© 2015 PEPD • Private Equity’s Leading News Magazine • 10-9-15

Dundee Sarea Has First Close on Debut Fund

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Canadian private equity firm Dundee Sarea has held a first close of its debut fund at C$112 million.  The fund has targeted a total fundraise of over C$200 million.

Investors in the new fund include Dundee Corporation, the Renaud family (through its family office holding company RJR LP 2014) and Caisse de dépôt et placement du Québec (CDPQ), one of the largest managers of public pension plans in Canada.

“Dundee Sarea is pleased to count on one of Canada’s most reputable and largest pension funds as a founding investor in its inaugural fund,” said David Goodman, President and Chief Executive Officer Dundee Corporation. “CDPQ’s investment reflects their interest in the significant potential of the challenging opportunities arising in mid-market companies. From our perspective, we take pride in the confidence they are showing in our private equity team and the depth of its turn-around experience and expertise.”

Dundee Sarea invests from C$15 million to C$50 million in companies requiring turnaround expertise with a focus on manufacturing, distribution, industrial products, agriculture, oil and gas, and forestry related industries. Typical targets are based in North America and Europe and have annual revenues of C$100 million to C$400 million.

“This strategic long-term investment – alongside two prominent investors – is positioned to take advantage of distinct business opportunities in a challenging macroeconomic environment and, at the same time, generate returns for our clients,” said Andreas Beroutsos, Executive Vice-President for Private Equity at the CDPQ.

Fund I made its first investment in August 2014 with the acquisition of Redecam Group, a Milan, Italy based designer and installer of air filtration equipment and flue gas treatment systems to companies operating in the heavy industry and energy sectors (www.redecam.com).  The founder and chairman of Redecam, Guiseppe Bettoni, co-invested alongside Dundee Sarea.

Dundee Corporation (TSE: DC.A) is active in investment advisory, corporate finance, energy, resources, agriculture, real estate and infrastructure. The company is based in Toronto (www.dundeecorp.com).

Caisse de dépôt et placement du Québec is an institutional investor that manages funds primarily for public and para-public pension and insurance plans. As of June 30, 2015, it held C$241 billion in net assets (www.cdpq.com).

The Renaud family partnership is led by Messrs. Philip Renaud and Richard Renaud, a former partner at Wynnchurch Capital.

© 2015 PEPD • Private Equity’s Leading News Magazine • 10-9-15