February 22, 2016
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Archives for February 22, 2016

Geneva Glen Sells Flow Polymers to Arsenal

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flow polymers nf1Geneva Glen Capital has sold its portfolio company, Flow Polymers, to Polymer Solutions Group, a portfolio company of Arsenal Capital Partners.

During Geneva Glen’s ownership, Flow Polymers organically doubled its earnings through international expansion and the introduction of new products and raw material sources. Flow Polymers is led by CEO Mike Ivany who will now serve as President and Chief Executive Officer of Polymer Solutions Group.

flow polymers nf11Flow Polymers, acquired by Geneva Glen in December 2010, is a manufacturer of chemical dispersions, process aids and homogenizing agents used in the tire, automotive, industrial products, wire and cable, and plastics markets. Chemical dispersions and agents are used by manufacturers to shorten the processing time and temperatures of thermoplastic resins such as polypropylene, polyethylene, polystyrene, ABS and nylon. Flow Polymers has approximately 500 customers and sells internationally in 30 countries. The company operates two chemical manufacturing facilities and is headquartered in Cleveland (www.flowpolymers.com).

“Geneva Glen was a true partner to me and the rest of the management team,” said Mr. Ivany. “During our tenure together, the company benefited significantly from the ongoing support and guidance provided by the Geneva Glen team.  While we are excited to transition to the next chapter at Flow Polymers, the relationship that we built with the principals at Geneva Glen will be enduring.”

Geneva Glen invests up to $50 million of equity per transaction in US and Canadian based lower middle-market companies that have EBITDAs between $3 million and $20 million. Sectors of interest include: business and consumer services; consumer products and food; environmental services; for-profit education and training; healthcare; niche industrial manufacturing; publishing, media and information services; specialty insurance and value-added distribution. The firm is based in Chicago (www.genevaglencapital.com).

“We are extremely grateful for the tremendous efforts put forth by Mike Ivany and the entire Flow Polymers management team.  Individually, and as group, they consistently found creative and resourceful avenues to grow revenue and expand margins.  It is always a joy to have a great result with an investment, and in particular, see a management team with the quality and integrity of Flow achieve a well-deserved financial result for themselves and the company’s investors,” said Adam Schecter and Jeff Gonyo, the founders and Managing Directors at Geneva Glen Capital, in a released statement.

psl nf1Polymer Solutions Group (PSG) was formed by Arsenal in June 2015 when the firm acquired Peach State Labs. PSG develops polymers and other chemicals used in products that include flooring, textiles, coatings and paints, water treatment, and lubricants. The company was founded in 1987 and is headquartered northwest of Atlanta in Rome, GA with an additional facility in Dalton, GA (www.peachstatelabs.com).

Sal Gagliardo nf1“The buy of Flow Polymers builds on our strategy to create a diversified leader of high-value niche solutions serving customers in the polymers and plastics end markets,” said Sal Gagliardo, an Operating Partner in Arsenal’s Specialty Industrials Group. “Flow Polymers has a strong presence in automotive and industrial applications while Peach State Labs provides a number of unique technologies to the construction and lubricants market. We are excited to partner with Mike Ivany and his team to continue to grow the PSG platform.”

Arsenal Capital Partners invests in middle-market specialty industrial and healthcare companies that have $50 million to $250 million in enterprise value.  Industries of specific interest include specialty & fine chemicals; segments of healthcare; transportation and logistics; power generation; aerospace & defense; and process industry components and services.  Arsenal has $1.7 billion of committed capital under management. The firm was founded in 2000 and has offices in New York and Shanghai (www.arsenalcapital.com).

John Televantos nf4Arsenal intends to continue the build of PSG through new product launches and acquisitions. The effort is led by John Televantos, an Arsenal partner who co-heads the firm’s specialty industrials group.

Twinbrook Capital (www.twincp.com) and Kayne Anderson (www.kaynecapital.com), PSG’s existing lenders, provided debt financing to support the buy of Flow Polymers.  PSG was advised by Kirkland & Ellis (www.kirkland.com).

KeyBanc Capital Markets (www.key.com) was the financial advisor to Flow Polymers. Geneva Glen and Flow Polymers were advised by Katten Muchin Rosenman (www.katten.com).

© 2016 PEPD • Private Equity’s Leading News Magazine • 2-22-16

Trivest Gets New Platform With Buy of IDMWORKS

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IDMworks nf1Trivest Partners has made an investment in IDMWORKS, a provider of identity and access management (IAM) services. This transaction represents the 9th platform company investment made by Trivest Fund V, a $415 million fund which closed in October 2012.

IDMWORKS is an identity and access management (IAM) consultancy firm. IAM is a service that allows companies to control access to IT resources (identity) and what resources can be use and in what ways (authorization). The company has more than 600 customers that are active in the finance and banking, retail, higher education, health care, utilities and government sectors. IDMWORKS was founded in 2004 and is headquartered in Coral Gables (www.idmworks.com).

Paul Bedi and Todd Rossin, IDMWORKS’ co-Chief Executive Officers, will continue to be responsible for the daily operations of the company under Trivest’s ownership.

paul bedi nf1The investment from Trivest will allow IDMWORKS to expand its capabilities through add-on acquisitions and the addition of new personnel, services and technologies. “The partnership with Trivest will allow IDMWORKS to expand its key vendor partnerships, our IdentityForge product platform, and our international customer base,” said Mr. Bedi.

Brian Connell nf1“IDMWorks is well-positioned to continue its long track record of growth across multiple avenues, and Trivest intends to assist the company in the active pursuit of acquisition opportunities that fit its strategic goals,” said Brian Connell, a vice president at Trivest.

Trivest makes control and non-control investments in founder or family owned businesses in the United States and Canada that have revenues of at least $25 million and cash flows of at least $5 million. Sectors of interest include business services, niche manufacturing, consumer products, and franchisors. The firm was founded in 1981 and has completed more than 225 transactions totaling over $5.5 billion in value. Trivest is headquartered in Miami (www.trivest.com).

© 2016 PEPD • Private Equity’s Leading News Magazine • 2-22-16

Volume Aloft, But For How Long?

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gf data nf6After a notably slack third quarter, middle-market M&A volume picked up in the final months of 2015, according to GF Data’s year-end report, resulting in aggregate valuation and volume figures that appeared to extend the “seller’s market” conditions of the prior few years.

The 204 private equity groups and other deal sponsors that are active GF Data contributors reported 62 fourth quarter transactions in the $10 million to $250 million Total Enterprise Value (TEV) range. This is markedly ahead of 39 closed transactions in the third quarter, and nearly on par with the 65 transactions closed in the fourth quarter of 2014.

In the end, 2015 looked a lot like 2014.  Firms in the GF Data universe completed 218 deals in 2015 compared to 211 in 2014.  In both years, valuations averaged 6.7x Trailing Twelve Months (TTM) EBITDA.

Andrew Greenberg nf4“We think the continuity in the headline numbers obscures some fairly significant shifts,” said Andrew Greenberg, CEO of GF Data. “Still-rising valuations on larger transactions, record premiums for selling businesses of above-average financial quality and continued declines in average equity contribution made possible by abundant debt – these are all signs of an even more mature seller’s market.”

graeme frazier nf5Total debt to EBITDA averaged 3.9x for the year.  While debt levels were the highest in the 13-year history of the firm’s data set, total debt actually receded slightly the fourth quarter.  According to B. Graeme Frazier, IV, GF Data’s Co-Founder and Principal, “Is this a random blip in the numbers or the first sign of a tightening debt market? That’s the pivotal factor for us to watch in these first months of 2016.”

“Given the recent increase in the federal funds rate, along with global volatility due to China and the energy markets, we are certainly tracking leverage availability for transactions,” said Duane Donner, Managing Partner of Founders Investment Banking (www.foundersib.com) based in Birmingham, AL. “Most owners are aware that valuations for middle-market companies are at all-time highs and considering if now would be the right time to explore M&A options and objectives. We still believe there is runway in 2016, but are similarly cautious for 2017 and beyond.”

GF Data provides reliable external information for use in valuing and assessing M&A transactions to private equity firms, investors, lenders and other users.  GF Data collects and publishes proprietary transaction information from private equity groups on a blind and confidential basis.  The pool of active contributors comprises 204 private equity firms, mezzanine groups and other financial sponsors.

Data contributors and other subscribers receive four products: (1) a quarterly report containing high-level valuation, volume and leverage data; (2) a quarterly supplement offering detailed information on debt and capital structure trends; (3) a semi-annual supplement on indemnification cap, escrow and other details; and (4) continuous access, through GF Data’s secure website, to detailed valuation data organized by NAICS code.

For information on subscribing or on contributing data as a private equity participant, please contact Bob Wegbreit at bw@gfdataresources.com or 610-260-6263. GF Data is based in West Conshohocken, PA (www.gfdataresources.com).

© 2016 PEPD • Private Equity’s Leading News Magazine • 2-22-16

Waud Beats Target at Nearly $1.1 Billion

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waud nf22Waud Capital Partners has held a final close of its fourth private equity fund, Waud Capital Partners IV, with $1.056 billion of capital commitments.  The new fund was oversubscribed and closed at the hard cap and above the original target of $750 million of limited partner commitments. The committed capital consists of $900 million from limited partners plus $156 million from the general partner and its affiliates.

reeve waud nf1Reeve Waud, Founder and Managing Partner of Waud Capital, was pleased with the quick fundraise. “Raising WCP IV in 12 weeks from the formal launch is a testament to the results we have delivered for our investors since the firm’s founding in 1993. Our performance is a direct result of the dedication, hard work and unwavering focus of our management partners on creating strong risk-adjusted returns.”

Waud Capital is led by Mr. Waud, Partners Matt Clary and David Neighbours, and Principals Justin DuPere, Chris Graber and Matt London.  The firm makes investments from $50 million to $100 million in middle-market companies with enterprise values from $50 million to $250 million that operate in the healthcare services and business services sectors. Since its founding in 1993, Waud Capital has made more than 185 investments, including platform companies and follow-on opportunities.  The firm is headquartered in Chicago (www.waudcapital.com).

“Our success is first and foremost about recruiting the best and the brightest investment professionals and partnering with exceptional CEOs.  Our disciplined and process-driven investment approach – led by dedicated industry research, identifying and partnering with outstanding executives, and an exhaustive mapping of potential acquisitions – has been the key to our success,” said Mr. Waud.

Nearly all of Waud’s existing limited partners invested in WCP IV and the firm added a number of first-time limited partners. “We believe it is important to create a strong alignment with our limited partners, which we have done through the large general partner commitment to the fund.”

Waud Capital raised its first fund in 1999 with $115 million of capital commitments. The second fund followed in 2005 with $272 million of commitments and the third fund closed in 2011 with $487 million of commitments.

Kirkland & Ellis (www.kirkland.com) was the legal advisor to Waud Capital.

© 2016 PEPD • Private Equity’s Leading News Magazine • 2-22-16

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