Archives for October 2015

Tailwind Buys AEA’s Colony Hardware

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Colony Hardware, a portfolio company of AEA Investors since July 2007, has been acquired by Tailwind Capital.

Colony Hardware is a route-based distributor of tools, equipment, fasteners, supplies, safety products, as well as a provider of rental and repair services, to commercial construction and industrial accounts located in the Northeast, Midwest, and Mid-Atlantic regions. The company has over 25,000 SKUs from more than 750 different manufacturers.  Colony focuses on small-ticket, just-in-time orders delivered directly to the jobsite. Customers include general contractors, civil contractors, and other subcontractors across multiple building trades. The company is headquartered near New Haven in Orange, CT (www.colonyhardware.com).

Tailwind makes investments of $25 million to $100 million in lower middle market companies with enterprise values of up to $300 million that are active in the healthcare, business and communications services sectors. Since its founding in 2003, Tailwind has invested over $1.2 billion in 31 portfolio companies and has completed over 70 add-on acquisitions.  The firm has 31 investment professionals and senior operating executives and is based in New York (www.tailwind.com).

AEA, the seller of Colony, makes equity and debt investments in middle market companies that operate in the following sectors: retail and consumer products, services, specialty chemicals, and value-added industrial products. The firm manages approximately $9 billion of invested and committed capital. AEA was founded in 1968 and is headquartered in New York (www.aeainvestors.com).

BB&T Capital Markets – through its Commercial & Industrial Group – was the exclusive financial advisor to Colony on this transaction.  The firm services eleven industry verticals including aerospace, defense & government services; automotive aftermarket; commercial & industrial; financial services; food & agribusiness; logistics & transportation services; healthcare; education; energy; real estate; and retail & consumer. BB&T – the parent of BB&T Capital Markets – is one of the largest financial services holding companies in the US with $210 billion in assets. BB&T is headquartered in Winston-Salem, NC (www.bbtcapitalmarkets.com).

© 2015 PEPD • Private Equity’s Leading News Magazine • 10-29-15

NEP Invests in Christy Sports

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Norwest Equity Partners has made an investment in Christy Sports, a retailer of ski and snowboard equipment and during the its off-season operates an outdoor furniture retail business.

Christy Sports is a specialty retailer of ski and snowboard equipment, apparel, and accessories and also provides custom fitting, mounting, tuning and repair services. The company has 40 retail stores located in resorts and ski areas across Colorado and Utah and operates multiple e-commerce sites.  In addition to the retail merchandise available in its stores, Christy provides ski and snowboard rental services. During the off-season, Christy operates an outdoor furniture retail business that allows it to use its operational infrastructure, employees and distribution facilities. Christy Sports was founded in 1958 and currently employs about 650 people. The company is headquartered in the Denver suburb of Lakewood (www.christysports.com).

“We are excited to work with CEO Patrick O’Winter and his management team to grow the business through geographic expansion and add-on acquisitions and feel confident that the combination of our capital and industry expertise will help Christy Sports to continue gaining market share,” said Todd Solow, a NEP partner.

Norwest Equity Partners (NEP) makes equity investments of $30 million to $150 million in companies operating in the agriculture, applied technology, business services, consumer products and services, distribution, diversified industrials, and healthcare sectors. In April 2015, NEP closed Norwest Equity Partners X, LP, a new $1.6 billion fund and Norwest Mezzanine Partners IV, LP, a new $800 million fund formed by NEP’s affiliated mezzanine investment firm, Norwest Mezzanine Partners (NMP). Norwest Equity Partners is headquartered in Minneapolis (www.nep.com).

ICR Partners (www.icrinc.com) was the financial advisor to Christy Sports and Goldberg Kohn (www.goldbergkohn.com) provided legal services.  Winston & Strawn (www.winston.com) provided legal services to NEP.

© 2015 PEPD • Private Equity’s Leading News Magazine • 10-29-15

Vance Street Capital Exits Secure Technology

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Vance Street Capital has entered into an agreement to sell Secure Technology Company to Benchmark Electronics for approximately $230 million in cash. Vance Street acquired a majority interest in Secure in October 2009.

Secure Technology is a provider of electronics, sub-systems, and components used in the industrial, aerospace and defense markets. The company’s products include rugged computer systems, RF components; electronic manufacturing services, and digital audio/video instrumentation products.  Secure’s products are often used in mission critical applications in which they are exposed to severe operating environments and are integrated into aircraft, surface-to-air missiles, torpedoes, locomotives, subway cars, tactical ground vehicles or are carried by soldiers and other combat personnel.  The company is headquartered in Santa Ana, CA (www.securetechnologycompany.com).

During its term of ownership, Vance Street achieved significant growth in sales and profitability as a result of an expansion of the company’s products and customer base in both the defense and non-defense end markets. Vance Street also completed three add-on acquisitions with the buys of Tactical Micro in January 2014; Lark Engineering in September 2013; and Smart Electronics & Assembly in May 2013.

“Following our acquisition of Secure in 2009, we took several steps to grow the business. These initiatives included the implementation of continuous improvement processes, the creation of an advanced technology division to capitalize on the company’s strong engineering capabilities, and the addition of new products, technologies and customers via strategic acquisitions,” said Richard Crowell, Managing Partner at Vance Street Capital. “Secure is an impressive organization and the success we have had in partnership with CEO Allen Ronk and his management team has been gratifying.”

Vance Street Capital makes control investments in companies with enterprise values up to $200 million. Sectors of interest include general industrial, aerospace & defense, and medical components and devices.  The sale of Secure is the fourth from Vance Street Capital’s current fund, Vance Street Capital II LP, which closed in 2008. The firm is based in Los Angeles (www.vancestreetcapital.com).

“Secure has benefitted significantly over the last six years from the operational support and strategic guidance Vance Street Capital provided,” said Mr. Ronk. “Since 2009 our team of engineers has grown from less than ten to over 55 and our program base has grown from less than 30 to over 135. We remain focused on the many opportunities we see to meet and exceed our customers’ needs and continue to drive growth.”

Benchmark Electronics (NYSE: BHE), the buyer of Secure, is an electronics manufacturing services company that provides product development and contract manufacturing services to original equipment manufacturing companies. Benchmark is headquartered in the Houston suburb of Angleton (www.bench.com).

Harris Williams & Co. is the financial advisor to Secure and O’Melveny & Myers is acting as its legal counsel.

© 2015 PEPD • Private Equity’s Leading News Magazine • 10-28-15

Calvert Street Buys Abrasive-Form

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Calvert Street Capital Partners has acquired Abrasive-Form, a precision creep-feed grinding manufacturer serving the industrial gas turbine, aerospace, automotive, and general industrial markets.

Creep feed grinding is a method of machining intricate forms and slots in a wide variety of materials. The process has several advantages over other machining and grinding methods, including increased accuracy, efficiency, improved surface finishes, burr reduction and the ability to grind heat treated materials.  Creep feed grinding was invented in Germany in the late 1950s by Edmund and Gerhard Lang.

Abrasive-Form’s product portfolio includes more than 400 custom-engineered metal component parts including turbine blades, vanes, shrouds, rotors, and sprockets. Abrasive-Form was founded in 1976 and is headquartered west of Chicago in Bloomingdale, IL (www.abrasive-form.com).

“We are thrilled to have found a partner who shares our vision for the next evolution of Abrasive-Form. With their growth orientation and operational expertise, Calvert Street will help us accelerate the implementation of our strategic growth plan,” said John Harig, President of Abrasive-Form.

Calvert Street makes control investments of $10 million to $20 million in companies that have an EBITDA from $5 million to $15 million and are located in the US or Canada.  Sectors of interest include industrial services, business services, healthcare IT, and specialty manufacturing sectors. The firm was founded in 1995 and is based in Baltimore (www.cscp.com).

Mid-market investment bank Livingstone Partners was the financial advisor to Abrasive-Form for this transaction. “Abrasive-Form has developed a leading global market position in the niche precision form grinding sector,” said Karl Freimuth, a Director at Livingstone. “We are proud to have advised Abrasive-Form on a successful sale and to have found an ideal partner in Calvert Street to support the company’s ambitious future growth plan.” Mr. Freimuth led the transaction for Livingstone.

Livingstone focuses on M&A and private capital transactions with values between $30 and $300 million in five sectors: business services; consumer; healthcare; industrial; and media & technology.  Abrasive-Form is Livingstone’s latest transaction in the power generation sector, a growing focus for the firm’s industrial team.  Livingstone is based in Chicago and has five international offices in Beijing, Dusseldorf, London, Madrid and Stockholm (www.livingstonepartners.com).

Godfrey & Kahn (www.gklaw.com) was the legal counsel to Abrasive-Form and Willkie Farr & Gallagher (www.willkie.com) advised Calvert Street.

© 2015 PEPD • Private Equity’s Leading News Magazine • 10-28-15

Searchlight Acquires Roots

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Searchlight Capital Partners has made a majority investment in Roots in partnership with the company’s co-founders Michael Budman and Don Green who have maintained a minority equity position in the company.

Roots is one of Canada’s leading lifestyle brands and sells women’s, men’s, children’s, and baby’s apparel; leather bags; footwear; active athletic wear; belts, small leather goods; and home furnishings. Roots has 220 retail stores in Canada, the United States and Asia and also has an active ecommerce business.   Roots maintains a state-of-the-art factory and distribution center in Toronto, both located near the company’s headquarters where all Roots products are designed. The company was founded in 1973 by Mr. Budman and Mr. Green, together with their wives, Diane Bald and Denyse Green (www.roots.com).

“Before making the decision to partner with Searchlight, Don and I had extensive discussions and meetings with the firm’s co-founders, Erol Uzumeri and Eric Zinterhofer, over a period of several months,” said Mr. Budman. “We were impressed by how well they understood and respected our brand. Not only do they have relevant experience, international expertise and financial resources to draw on, but they are also committed to Roots staying true to its longstanding values, culture and quality products.”

“Our investment will enable Roots to support its long-term growth ambitions,” said Canadian Searchlight co-founder Erol Uzumeri. “As one of the few iconic Canadian heritage brands, we see significant growth potential for Roots in both Canada and internationally across multiple distribution channels.”

Searchlight Capital Partners invests equity and debt in companies active in the telecom; communications, information and information technology services; business and financial services; industrial goods; and consumer sectors. The firm was founded in 2010 by its partners Oliver Haarmann, Erol Uzumeri, and Eric Zinterhofer. Searchlight is headquartered in London with additional offices in New York and Toronto (www.searchlightcap.com).

Toronto-Dominion Bank is providing debt financing for this transaction.

© 2015 PEPD • Private Equity’s Leading News Magazine • 10-28-15

Paine & Partners Acquires Suba Seeds

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Paine & Partners has signed an agreement to acquire Suba Seeds Company, a specialty vegetable and legume seed producer based in Italy.

Suba is a producer, packer and distributor of specialty vegetable seeds for professional, semi-professional and hobby garden markets. The company is also a contract supplier to major seed companies. Suba is the world’s leading producer of coriander (cilantro), and its portfolio of core crops include varieties of beans, peas, radish, cabbage, alfalfa, carrots, chicory and onion. Suba is supplied with its seed products through a network of more than 1,000 growers.  The company was founded in 1974 by Augusto Suzzi and is headquartered southeast of Bologna in Longiano, Italy (www.subaseeds.com/eng).

Paine & Partners provides equity capital for management buyouts, going private transactions, and company expansion and growth programs, for companies operating in the food and agribusiness industries.  The firm currently invests through its $893 million Paine & Partners Fund IV, which is solely dedicated to agribusiness investing. Paine & Partners was founded in 2006 and has offices in New York, Chicago and San Mateo, CA (www.painepartners.com).

Paine & Partners has previously invested in the seed industry through a predecessor fund that invested in Seminis, a developer, producer and marketer of vegetable and fruit seeds that was sold to Monsanto in 2005; and in Advanta, an agronomic seed company that was sold in 2006 to United Phosphorus.

“Our acquisition of Suba will provide Paine & Partners the opportunity to leverage our substantial in-house seed investment expertise and operating knowledge across the seed industry to build a global leading specialty vegetable seeds production platform,” said Kevin Schwartz, President and a founding Partner at Paine & Partners.

Paine & Partners intends to build on Suba’s competitive advantages by expanding into new markets, enhancing Suba’s portfolio with higher margin products and making strategic acquisitions.  “Suba has built an unmatched reputation for meeting the needs of our customers with our high quality and reliable seed products since our founding more than 40 years ago,” said CEO Marcello Tumedei.  “As we look toward the continued growth of our company, we have found an ideal partner in Paine & Partners, who shares our vision and confidence in Suba’s long-term growth prospects.  Paine & Partners has a proven track record and unparalleled expertise in agribusiness, and we look forward to benefiting from their experience and their resources as we take Suba to the next level.”

© 2015 PEPD • Private Equity’s Leading News Magazine • 10-28-15