January 12, 2016
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Archives for January 12, 2016

Huron Buys Drake Automotive

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drake auto nf1Huron Capital Partners has acquired Drake Automotive Group – a designer and distributor of branded automotive aftermarket products – in partnership with its founder and management team.

drake nf11Drake Automotive Group serves the classic car, off-road, and late model “muscle car” markets. Drake has long been a provider of parts for classic and current model Ford Mustangs and for other vehicles such as Broncos, Jeeps, and Camaros. The company was founded by Scott Drake in 1988 and is headquartered in Henderson, NV (www.drakeautomotivegroup.com).

Brian Demkowicz nf1“We think Drake is a great fit with Huron Capital, given our Detroit roots,” said Brian Demkowicz, Managing Partner of Huron Capital. “We believe Scott and his team have done an excellent job building a premier brand name that caters to a passionate group of vehicle enthusiasts who recognize Drake for innovation and quality.”

According to the 2015 Specialty Equipment Market Association Market Report, the automotive restoration aftermarket parts business is a $1.4 billion industry. “Working with the Drake team, we plan to pursue a buy-and-build strategy in the enthusiast segment of the automotive aftermarket,” added Mr. Demkowicz.

Huron Capital Partners invests up to $70 million per transaction in middle market companies that have revenues up to $200 million and EBITDAs of $5 million or more. Sectors of interest include specialty manufacturing, business services, consumer goods & services, and healthcare.  The firm was founded in 1999 and currently manages over $1.1 billion in equity through four private equity funds. Huron Capital has offices in Detroit and Toronto (www.huroncapital.com).

“Our team has a lot of energy and ideas for growing the business, and we are excited to have a partner in Huron Capital who shares our vision and values,” said Mr. Drake.

© 2016 PEPD • Private Equity’s Leading News Magazine • 1-12-16

Marwit Exits Western Emulsions

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western emulsinos nf1Marwit Capital Partners has sold its portfolio company, Western Emulsions, to Idaho Asphalt Supply. Marwit acquired Western Emulsions in 2008 in partnership with Bob Koleas, CEO at the time and part of the founding family. Asphalt emulsions are used to extend the useful life of roads, highways and parking lots.

western emulsinos nf11Western Emulsions is a manufacturer of asphalt emulsions and related products used for roadway pavement preservation, repair and restoration projects. Customers include: (i) federal agencies, such as DOT’s and others involved with roads, highways and airports; (ii) state and local agencies, such as county and municipal public works departments; (iii) private entities, such as general contractors; and (iv) intermodal consultation groups, such as government agencies who manage highway infrastructure. The company is based in Tucson (www.westernemulsions.com).

Under Marwit’s ownership, the business grew from two plants serving two states to six plants serving 15 states. Marwit’s activities included the construction of three new facilities, the closing of two add-on acquisitions, and the expansion of the company’s product line. These efforts resulted in a more than tripling of revenue and EBITDA during the ownership period.

chris britt nf1According to Marwit, Western Emulsions is now the largest independent provider of asphalt emulsions for pavement preservation applications in the US. “We were fortunate to work with and assemble a strong management team at Western Emulsions, who shared our vision for building a leading company in the pavement preservation industry,” said Chris Britt, Marwit Managing Partner.

Marwit invests from$10 million to $40 million in companies that have enterprise values up to $100 million, revenues of $20 million to $200 million and EBITDA in the range of $4 million to $20 million. Sectors of interest include infrastructure; healthcare services; healthy living products and services; industrial products and services; business services; renewable resources; and retail and entertainment.

Idaho Asphalt Supply, the buyer of Western Emulsions, is a supplier of asphalt cements, emulsions, and polymer modified asphalts. The company was founded in 1973 and is headquartered in Idaho Falls, ID (www.idahoasphalt.com).

David Browne nf1“Our investment in Western Emulsions exemplifies Marwit Capital’s strategy of working closely with the fund’s CEOs and management teams, through good times and challenging times, to generate successful investment outcomes that benefit the fund, our management partners, and our companies,” said Marwit Partner David Browne.

Marwit is managed by three partners, Chris Britt, Matthew Witte and David Browne, with human resource strategy and support provided across all portfolio companies by Carol Farrell. The firm has completed over 60 buyouts, recapitalizations and growth equity investments in its history. Marwit was founded in 1962 and is headquartered in Newport Beach (www.marwit.com).

© 2016 PEPD • Private Equity’s Leading News Magazine • 1-12-16

Great Hill Acquires RxBenefits

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rxbenefits nf1RxBenefits, a provider of pharmacy benefits administration services to small and mid-sized, self-insured employers, has been acquired by Great Hill Partners in partnership with the company’s management team.

“RxBenefits has experienced rapid growth in recent years and has emerged as a leader in the pharmacy benefits administration space,” said Bryan Statham, CEO of RxBenefits. “We are pleased to build on this momentum by collaborating with Great Hill, a financial partner that has extensive healthcare experience and resources.”

RxBenefits’ services include management and administration, including pharmacy benefit assessment, plan contracting, plan implementation, member services, claims auditing and reconciliation, and ongoing management of pharmacy benefit plans. The company markets its services through partnerships with employee benefits consultants. RxBenefits was founded in 1995 and is headquartered in Birmingham, AL (www.rxbenefits.com).

According to Great Hill, prescription drug spending last year reached a record-breaking $374 billion, up 13 percent from 2013 representing the largest percentage increase in over a decade. New therapies and specialty drugs were the main driver of the increase. While specialty medications represent only about 1 percent of all US prescriptions, in 2014 they accounted for more than 30 percent of the total drug spend.

mark taber nf11“There has never been a more important time for employers to look at their general and specialty pharmacy strategy to see if they have optimal pricing terms and identify strategic savings opportunities,” said Mark Taber, a Managing Partner with Great Hill Partners. “With a seasoned management team, a large addressable market, a growing demand – and most importantly, a strong solution – RxBenefits is poised to continue its rapid growth trajectory.”

RxBenefits joins Great Hill’s current portfolio, which includes recent healthcare investments Qualifacts (SaaS based behavioral health EHR) and PlanSource (SaaS based employee benefits administration technology).

Great Hill invests from $25 million to $150 million of capital per transaction to finance the expansion, recapitalization or acquisition of growth companies in a range of sectors within the media/communications, Internet, business services, consumer services, financial technology, healthcare technology, software, and transaction processing sectors. Great Hill is based in Boston (www.greathillpartners.com).

RxBenefits represents Great Hill’s sixth healthcare technology investment. Prior investments include bSwift (sold to Aetna for $400 million in November 2014), Passport Health Communications (sold to Experian for $850 million in November 2013) and SterilMed (sold to Johnson & Johnson subsidiary Ethicon Endo-Surgery in September 2011).

© 2016 PEPD • Private Equity’s Leading News Magazine • 1-12-16

Rock Hill Acquires Big City

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big city nf1Rock Hill Capital Group has acquired Big City Access, a provider of commercial scaffolding and related services to companies operating along the Gulf Coast and throughout Texas.

big city nf11Big City Access (BCA) provides scaffolding rental equipment – including suspended scaffolds and supported scaffolds – to its customers that are active in the construction and maintenance industries. Services include scaffold erection, dismantling and inspection. BCA was founded in 2002 by Barbara Roberts, and is headquartered in Houston with an additional office near San Antonio in Universal City, TX (www.bigcityaccess.com).

“Rock Hill is the ideal partner to help us continue to grow Big City and expand our services portfolio for our customers. Our culture fits very well with Rock Hill – they’re local, tied into the community, hands-on and personally committed to our business and our customers. I couldn’t be more excited about the future of the Company,” said Ms. Roberts.

With the acquisition of the company by Rock Hill, Marc Wilson – the former President and CEO of scaffolding equipment company Safway Services – will serve as a strategic advisor and Board Member of BCA.

Rock Hill Capital Group invests in small-to-lower middle market companies with enterprise values up to $75 million and EBITDA of less than $10 million that are located in the South and Southeast regions of the US. Sectors of interest include industrial and energy services and value-added distribution. Currently, Rock Hill has over $140 million of committed capital under management through Rock Hill Capital I, LP and Rock Hill Capital II, LP. The firm was founded in 2008 and is based in Houston (www.rockhillcap.com).

Jeffery Christman nf1“We are extremely excited to partner with Barbara and her team. She represents the type of entrepreneur-partner Rock Hill looks for when making investments. The BCA team has built a great business and we look forward to helping them grow geographically and into new products and services,” said Jeffery Christman, Managing Director of Rock Hill.

Texas Capital Bank (www.texascapitalbank.com) provided debt financing for this transaction. Statesman Corporate Finance (www.statesmanbiz.com) provided investment banking services to BCS.

© 2016 PEPD • Private Equity’s Leading News Magazine • 1-12-16

Dominus Closes Oversubscribed Fund II

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dominus nf1Dominus Capital has held a final close of its second fund, Dominus Capital Partners II, LP, at its hard cap of $400 million in limited partner capital commitments, higher than its fundraising target of $350 million and more than doubling its debut fund.

Dominus received strong interest from both new and existing investors and did not use a placement agent. Limited partners in the new fund include several new domestic and international institutional investors including endowments, state pension plans, and one large sovereign wealth fund.

As with its debut fund, Fund II will make control equity investments in North American services, consumer, and industrial middle market companies that have between $10 million and $30 million of EBITDA.

Dominus Capital was founded by Gary Binning, Bob Haswell, and Ashish Rughwani – all former Quad-C Management executives – in 2008. The group of founding partners was later joined by several CEOs of past portfolio companies that now serve as Operating Partners of the firm.  Dominus Capital is headquartered in New York (www.dominuscap.com).

© 2016 PEPD • Private Equity’s Leading News Magazine • 1-12-16

Ex-CEO of Polypore Joins CCMP

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ccmp nf2CCMP Capital Advisors has hired Robert Toth as a Managing Director.  Mr. Toth will be responsible for sourcing new investment opportunities in the industrial and chemicals sectors. He will also work with CCMP’s current portfolio companies in these sectors on growth plans and value creation opportunities.

Robert Toth nf1Mr. Toth has more than 30 years of senior experience at global industrial and chemical companies, most recently serving as CEO, President and Chairman of the Board of Directors of Polypore International – a global filtration company specializing in microporous membranes. Prior to Polypore, Mr. Toth held the role of President, CEO and member of the Board of Directors of CP Kelco, a producer of specialty hydrocolloids (a type of substance that forms a gel in the presence of water). Prior to joining CP Kelco in 2001, Mr. Toth spent 19 years at Monsanto Company and Solutia Inc. where he held a variety of managerial and executive roles.

“A significant portion of Bob’s career was spent in CEO positions at private equity-backed industrial and chemical companies, so he has a keen understanding of how to nurture growing businesses and create value for all of their constituencies. We are thrilled to add yet another career operating executive to our investment team and welcome Bob to CCMP,” said Tim Walsh, Managing Director and Chief Operating Officer of CCMP.

CCMP specializes in middle market buyouts and growth equity investments of $100 million to $500 million in North America and European companies. The firm typically invests $100 million to $500 million of equity per transaction in companies with enterprise values of $250 million to $2 billion. Sectors of interest include consumer/retail, industrial, chemicals/energy, and healthcare. CCMP is headquartered in New York with additional offices in Houston and London (www.ccmpcapital.com).

“The team at CCMP has a proven record of successfully partnering with founders, entrepreneurs and management teams, particularly in the industrial and chemicals sectors, and I look forward to working with them as we expand and add lasting value to the firm’s industrials and chemicals portfolio,” said Mr. Toth.

“Bob has distinguished himself as an outstanding leader with the technical knowledge and strategic vision to grow unique industrial technology, specialty materials and chemical businesses, and we are certain he will be a valuable asset to our firm and our portfolio companies,” added Mr. Walsh.

© 2016 PEPD • Private Equity’s Leading News Magazine • 1-12-16

Twin Brook Adds New Healthcare Pro

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twinbrook nf2Twin Brook Capital Partners – the middle market direct lending subsidiary of Angelo, Gordon & Co. – has hired Faraaz Kamran, a former Managing Director and Group Head of Healthcare Leveraged Finance at Madison Capital Funding, as a Partner to head its Healthcare Lending initiative.

In his new position, Mr. Kamran will focus on originating and underwriting loans to middle market companies in the healthcare sector, primarily those with private equity sponsors.

“We welcome Faraaz to the firm, as we continue to bolster our bench of talent while broadening our product offering to the private equity sponsor community,” said Christopher Williams, a Partner at Twin Brook. “Faraaz has deep expertise in healthcare lending, and his appointment at Twin Brook underscores our commitment to the healthcare sector.”

Before his time at Madison Capital Funding, Mr. Kamran worked at Merrill Lynch Capital Healthcare Finance as a Vice President. Mr. Kamran also worked at Dresdner Kleinwort Wasserstein and American National Bank and Trust Company of Chicago.

Faraaz Kamran nf1“I am thrilled to join Twin Brook, given the strength of the franchise and the team’s expertise in middle market lending,” said Mr. Kamran. “I have years of experience working with many of the partners at the firm and I am confident in our ability to build a market-leading healthcare business.”

Twin Brook focuses on loans to companies with EBITDA between $3 million and $50 million. The firm is led by Trevor Clark and Christopher Williams, two of the original founders of Madison Capital Funding. Other Twin Brook Partners and Principals include Richard Christensen, David Gibson, Grant Haggard, Drew Guyette and Jessica Nels.

Twin Brook recently completed its 18th financing and has committed over $325 million of capital to companies in its first eight months of operation (www.twincp.com).

© 2016 PEPD • Private Equity’s Leading News Magazine • 1-12-16

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