Archives for October 19, 2015

Riverside Acquires Drain Doctor

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The Dwyer Group, a franchising platform company of The Riverside Company, has acquired Drain Doctor, a franchisor of plumbing services in the UK.  Drain Doctor is the fourth add-on Dwyer and Riverside have completed this year.

Drain Doctor specializes in professional grade plumbing and drainage services to both the residential and commercial end-markets. The company operates through 42 franchisees and is headquartered north of London in Peterborough, UK.  Drain Doctor has held the UK master license to Dwyer’s Mr. Rooter brand since 1993 (www.draindoctor.co.uk).

The Dwyer Group, acquired by Riverside in August 2014, is now the owner of 13 service-based franchise organizations: Aire Serv, Glass Doctor, The Ground Guys, Mr. Appliance, Mr. Electric, Mr. Rooter, Portland Glass, Rainbow International, Five Star Painting, Molly Maid, Mr. Handyman, ProTect Painters, and Drain Doctor.  These brands collectively have more than 2,000 franchises in seven countries.  The Dwyer Group was founded in 1981 and is headquartered in Waco, TX (www.dwyergroup.com).

Riverside and Dwyer plan to drive growth at Drain Doctor by improving franchisee training, increasing marketing, and widening Drain Doctor’s footprint within the UK.   Drain Doctor will also benefit from Dwyer’s development and lead generation efforts.

“Dwyer has a long history with Drain Doctor and is eager to work even more closely with them,” said Riverside Principal Meranee Phing. “Drain Doctor and its team provide exceptional service across the UK, and this acquisition provides an excellent growth opportunity for both companies.”  Working with Ms. Phing on the transaction for Riverside were Partner Sarah Roth, Senior Associate Jason Fulton, Associate Chase Eckert and Operating Partner Tom Anderson.

Riverside Partner Anne Hayes worked on financing the transaction for this transaction.  Madison Capital, GE Capital, NXT Capital and Ares Capital have agreed to provide the debt needed to acquire Drain Doctor.

Riverside’s franchising investments are led by Industry Sector Head and Origination Principal Jeremy Holland. He is supported by franchising industry veteran and Senior Advisor Steve Siegel.

The Riverside Company invests in and acquires 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 70 companies. Riverside is headquartered in New York with additional offices in Atlanta, Chicago, Cleveland, Dallas, Los Angeles, San Francisco, and London (www.riversidecompany.com).

© 2015 PEPD • Private Equity’s Leading News Magazine • 10-19-15

Wynnchurch Notches 4x on Sale of Wolverine

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Wynnchurch Capital has sold Wolverine Advanced Materials to publicly-traded ITT Corporation for approximately $300 million.  Wynnchurch – which acquired the company in December 2010 from EaglePicher – generated a return of 4 times its invested capital.

Wolverine Advanced Materials is a manufacturer of rubber-coated materials for use in industrial, electronics, and automotive applications including braking systems and harsh environment seals and gaskets. The company is based in Dearborn, MI (www.wamglobal.com).

“Wolverine represented an opportunity to reinvigorate a company with great DNA, differentiated products and leading market share,” said Terry Theodore, a Partner at Wynnchurch. “By recruiting fresh leadership and working with the management team to drive operational improvement, bolster the sales and go-to-market strategy, invest in engineering and product development and execute a strategic add-on acquisition, Wynnchurch and the management team were able to significantly grow Wolverine’s earnings and accelerate its topline growth.”

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

“Wolverine is a great business and we are proud of the growth and accomplishments that the management team, in close collaboration with Wynnchurch, were able to achieve during our ownership period,” said Brian Crumbaugh, a Managing Director at Wynnchurch.

Wynnchurch was advised by UBS Investment Bank (www.ubs.com) and Foley & Lardner (www.foley.com) served as the firm’s legal advisor.

© 2015 PEPD • Private Equity’s Leading News Magazine • 10-19-15

Morgenthaler Acquires Trachte

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Morgenthaler Private Equity has acquired Trachte, a manufacturer of preassembled and modularized control buildings.

Trachte’s buildings are used to house electrical components that control and protect electrical infrastructure, such as transmission and distribution substations.  In addition, Trachte buildings are used in industrial applications to house equipment such as relay and protection controls, switchgear, battery systems, servers, and data center hardware that control and protect electrical infrastructure and equipment. Trachte customers include utilities, OEMs, and other companies active in the power generation, energy, chemical processing, data center, and general industrial end markets. The company is headquartered south of Madison in Oregon, WI (www.trachteusa.com).

Morgenthaler Private Equity partnered in the transaction with the existing shareholders of Trachte including retiring President Randy Trachte and retiring VP of Sales Ron Trachte, as well as other members of the company’s senior management team.  Randy and Ron Trachte are third generation owners of the company which was founded in 1919 by George and Arthur Trachte.

Upon closing of the transaction, Matt Cahill will join the company as its new CEO.  Mr. Cahill is an experienced operating executive.  Paul Holmes, the current Vice President Manufacturing Operations and a 25-year Trachte employee, will become Vice President and Chief Operating Officer.

“Trachte has developed a tremendous reputation for product quality, engineering and project management support, on-time delivery, and customer service,” said Joe Machado, a Partner at Morgenthaler.  “We are excited to partner with Matt, Paul, and the rest of the Trachte organization as we help the company continue its growth.”

Alliance Partners (www.alliancepartners.com) provided senior debt financing to support the transaction. Hartford Investment Management Company (www.himco.com) and Siguler Guff (www.sigulerguff.com) provided subordinated debt financing.

“Our grandfather began manufacturing prefabricated metal buildings in 1919,” said Randy and Ron Trachte in a released statement. “Over our past 40 years of ownership with Trachte, we have had the privilege of working with our employees to build great relationships with customers and suppliers by delivering on our commitments.  We were very selective in choosing an investment partner for Trachte and believe Morgenthaler will be a great steward for the company and its legacy.”

Morgenthaler invests in companies in the lower middle market that have transaction values up to $150 million and EBITDAs between $5 million and $20 million.  Sectors of interest include high-value manufacturing and proprietary business services. The firm has $3 billion of capital under management and has offices in Cleveland and Boston (www.morgenthaler.com).

Milwaukee-based investment bank Cleary Gull (www.clearygull.com) was the financial advisor to Trachte.

© 2015 PEPD • Private Equity’s Leading News Magazine • 10-19-15

Fort Point Exits Engineering, Planning and Management

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Fort Point Capital has completed the sale of Engineering, Planning and Management, Inc. (EPM) to Onet North America, a subsidiary of Onet, an engineering and services company based in Marseille, France. Fort Point acquired EPM in July 2013.

EPM is a provider of engineering, consulting, probabilistic risk assessment, and fire protection services to the nuclear power industry and other commercial customers. The company was founded in 1980 and is headquartered west of Boston in Framingham, MA (www.epm-inc.com).

During its two plus years of ownership, Fort Point actively supported the company’s growth through the addition of senior staff including a chief financial officer and chief operating officer; developed and executed a plan to expand into adjacent end markets and new geographies; grew profitability and improved working capital management; and made investments in new software and services.

“EPM epitomizes our strategy of acquiring niche leaders and working with those management teams to significantly improve and transform their businesses from a qualitative and quantitative standpoint,” said Christina Pai, a Partner at Fort Point.

Fort Point Capital invests from $5 million to $25 million in service-oriented, lower middle-market companies across a range of sectors, including business services, healthcare, consumer, and software & information. Fort Point Capital is currently investing from FPC Small Cap Fund I. Since founding in 2010, Fort Point has completed nine transactions – five platform investments, two exits and two add-on acquisitions. The sale of EPM marks the second portfolio realization for Fort Point and first realization from FPC Small Cap Fund I.  The firm is based in Boston (www.fortpointcapital.com).

“With Fort Point’s support and encouragement, we leveraged our track record and market leadership position to introduce new software and service offerings, acquire new customers and expand into new markets and geographies,” said Robert Kalantari, CEO of EPM.

Houlihan Lokey (www.hl.com) served as financial advisor to EPM and Kirkland & Ellis (www.kirkland.com) provided legal counsel.

© 2015 PEPD • Private Equity’s Leading News Magazine • 10-19-15