Archives for February 29, 2016

 Mainsail Closes Fund 4

by

Mainsail Partners has held a final closing of its oversubscribed fourth fund, Mainsail Partners IV, LP, at $384 million. Fundraising took just over two months to complete and the final close occurred in December 2015.

“The high caliber of investors who participated and speed with which we raised our fourth fund are further validation that our strategy continues to resonate,” said Gavin Turner, a managing partner at Mainsail. “We are honored by the quality of new and returning investors who have chosen to partner with us in this latest fund.”

Mainsail Partners invests from $5 million to $25 million in US and Canadian companies that have revenues of $4 million to $50 million. Sectors of interest include software and software as a service (SaaS); technology-enabled business services; E-commerce and Internet; financial technology and services; healthcare IT and services; and franchising business models.

An important component of Mainsail’s strategy is to provide operational support to help companies sustain high growth rates. Smaller bootstrapped companies are often under-invested in infrastructure, have gaps in key management positions, and have limited time to keep up with the latest best practices. To help companies address these challenges, Mainsail has built an operations team with functional expertise in sales, digital marketing, recruiting, product management, customer success and finance.

“Our team of outstanding men and women is purpose-built to help bootstrapped companies achieve their potential,” said Jason Payne, a managing partner at Mainsail. “We deliver capital, resources and expertise with the goal of helping entrepreneurs achieve faster growth with less risk than they would have been able to achieve on their own.”

Mainsail was founded by Mr. Turner and Mr. Payne in 2003 and is based in San Francisco (www.mainsailpartners.com).  Recent Mainsail investments include 3PL Central, Brilliant Earth, Ncontracts, nCourt, Netchemia, PlayMaker CRM, SQL Sentry and Zen Planner.

© 2016 PEPD • Private Equity’s Leading News Magazine • 2-29-16

Abacus Backs WestView Recapitalization of VC3

by

Abacus Finance Group was the Administrative Agent and Sole Lead Arranger for $14 million in senior secured credit facilities to support the recapitalization of VC3 by WestView Capital. Abacus also made an equity co-investment in VC3.

VC3 is a provider of managed IT hosting and support services primarily to the municipal government sector.  The company’s products and services include private cloud hosting of industry specific applications, hosted desktops, hosted VoIP (voice over internet protocol), fully managed networks and 24×7 help desk services. VC3 also develops automation and productivity enhancing websites and web applications. The company is headquartered in Columbia, SC (www.vc3.com).

“We selected the Abacus team, whom we have known for many years, for two reasons,” said Matt Carroll, General Partner of WestView. “One, they are easy to work with, and two, they are extremely reliable. Once again, the entire process was handled smoothly and efficiently.”

Abacus provides cash flow senior financing to private equity-sponsored, lower-middle market companies that have EBITDA between $3 million and $15 million. Debt facilities can be as large as $50 million with a typical hold size ranging from $10 million to $30 million.  Abacus is an affiliate of New York Private Bank & Trust, the holding company for Emigrant Bank, founded in 1850.  Abacus is based in New York (www.abacusfinance.com).

“We are fortunate to have a great working relationship with WestView, a terrific sponsor firm with a great track record” said Tim Clifford, President and CEO of Abacus. “They provide full transparency during the due diligence process which enables us to provide a timely close – an important aspect of what we call our Total Partnership Approach.” Other Abacus team members involved in the transaction included Managing Director Sean McKeever and Associate Rafal Rydzewski.

WestView Capital Partners makes majority and minority investments of $10 million to $50 million in lower middle market growth companies.  Sectors of interest include healthcare services, business and technology services, software, industrial/manufacturing, and consumer/retail.  Target companies will have operating profits between $3 million and $20 million.  WestView manages approximately $1 billion in capital across three funds and is headquartered in Boston (www.wvcapital.com).

© 2016 PEPD • Private Equity’s Leading News Magazine • 2-29-16

Kohlberg Sells Pittsburgh Glass Works

by

Pittsburgh Glass Works, a portfolio company of Kohlberg & Company, has been sold to LKQ Corporation for $635 million.  Kohlberg & Company first invested in Pittsburgh Glass Works in October 2008 when it acquired the company from PPG Industries.

Pittsburgh Glass Works (PGW) is a wholesale and retail distributor and manufacturer of automotive glass. PGW’s revenue for the twelve months ended October 31, 2015 was approximately $1.1 billion. Products include OEM windshields, rear and side windows, sunroofs and assemblies sold to auto and truck manufacturers. The company also supplies and distributes replacement automotive glass products for use in the aftermarket. PGW operates approximately 120 distribution branches serving over 7,000 automotive glass retailer shops across North America. The company also operates 12 automotive glass fabrication facilities in North America, Europe and China. PGW is headquartered, of course, in Pittsburgh (www.pgwglass.com).

Kohlberg & Company invests in companies in the industrial manufacturing; consumer products; business services; healthcare services; and financial services sectors. The firm concentrates on companies with EBITDAs between $20 million and $100 million where it can invest between $50 million and $200 million of equity. Kohlberg & Company is currently investing its seventh private equity fund, Kohlberg Investors VII. The firm was founded in 1987 and is based in Mt. Kisco, NY (www.kohlberg.com).

LKQ Corporation (NASDAQ: LKQ), is a provider of alternative and specialty parts to repair and accessorize automobiles, trucks, and recreational and performance vehicles. The company was founded in 1998 and has made more than 200 acquisitions since its formation. LKQ is headquartered in Chicago and has operations in North America, the United Kingdom, the Netherlands, Belgium, France, Scandinavia, and Taiwan (www.lkqcorp.com). LKQ will finance the buy of PGW with borrowings under an existing revolving credit facility that has approximately $2.2 billion of availability.

Ropes & Gray provided legal counsel to Kohlberg & Company and Pittsburgh Glass Works. The Ropes & Gray team, which was led by private equity partner Christopher Rile and private equity associates Laura Steinke and Catherine Riley (all of New York), also included tax partner Eric Elfman (Boston), executive compensation & employee benefits partner Loretta Richard (Boston), labor & employment partner David Mandel (Boston), real estate & environmental partner Peter Alpert (Boston), and intellectual property transactions partner David McIntosh (Boston).

Jefferies (www.jeffries.com) and Nomura Securities (www.nomura.com) served as financial advisor to Kohlberg & Company and Pittsburgh Glass Works.

© 2016 PEPD • Private Equity’s Leading News Magazine • 2-29-16

Fenway Carves Up BRG Sports

by

BRG Sports, a portfolio company of Fenway Partners, has entered into an agreement for publicly-traded Vista Outdoor to acquire the Action Sports business of BRG Sports for $400 million in cash plus an earn-out related to the future performance of the business.

BRG Sports is a designer, developer and marketer of sports equipment and accessories under the Bell, Riddell, Giro, Blackburn and C-Preme brands. The company was formerly known as Easton-Bell Sports and changed its name to BRG Sports in April 2014. BRG Sports is headquartered north of Santa Cruz in Scotts Valley, CA and has 32 locations in the US, Canada, Mexico, Europe and Asia (www.brgsports.com).

In the past two years, Fenway Partners has tried to sell BRG Sports in one piece but because of lawsuits and potential future liabilities related to its Riddell brand (football helmets) the firm has been marketing the company’s brands individually. The Action Sports business that is being sold to Vista Outdoor includes the Bell (motorcycling helmets), Giro (cycling and snowboarding helmets), Blackburn (cycling gear) and C-Preme (children’s helmets and products) brands.

BRG will apply the proceeds from the transaction with Vista to pay down debt, strengthen the company’s balance sheet and pursue growth initiatives that will benefit its remaining brand, Riddell. Riddell is a designer and developer of protective sports equipment including football helmets, shoulder pads, apparel, and related accessories (www.riddell.com).  BRG Sports’ current owners, Fenway Partners – though its second and third funds – and Ontario Teachers’ Pension Plan (Teachers), will maintain their equity interests in the company.

Fenway Partners makes control investments in businesses with $100 million to $600 million in enterprise value and $15 million to $75 million in EBITDA. Equity investments generally range from $50 million to $75 million. The firm is based In New York (www.fenwaypartners.com).

Teachers is one of the world’s largest private equity investors, having participated as a long-term investor in numerous management buyouts in Canada, the United States and Europe.  It is the private investment department of the Ontario Teachers’ Pension Plan, the largest single-profession pension plan in Canada.  Teachers’ is based in Toronto with offices in New York and London (www.teachersprivatecapital.com).

Vista Outdoor (NYSE: VSTO) is a designer, manufacturer and marketer of products used in the outdoor sports and recreation markets. The company was the top seller of ammunition in the United States from 2008 to 2013. As of March 2015, it controlled about 40% of the ammunition market. The company is headquartered north of Salt Lake City in Clearfield, UT (www.vistaoutdoor.com).

Morgan Stanley (www.morganstanley.com) was the financial advisor to BRG Sports and Ropes & Gray provided legal counsel (www.ropesgray.com).

© 2016 PEPD • Private Equity’s Leading News Magazine • 2-29-16

Blackstreet Sells American Combustion

by

Blackstreet Capital Management has sold its portfolio company American Combustion to Timothy Kirlin, its Chief Executive Officer, and other members of the company’s management team.

American Combustion (ACI) is a mechanical engineering firm that installs and repairs boilers, chillers, HVAC units and other commercial mechanical systems. The company is headquartered northeast of Washington, DC in Brentwood, MD (www.aciindustries.com).

“My 10 year partnership with Blackstreet has been rewarding both financially and operationally,” said Tim Kirlin. “We jointly rescued this company from the prior owner and saved over 100 primarily union jobs in the DC area. During that time we turned a money losing operation into a growing enterprise and I look forward to the next 10 years as an independently owned business. I want to thank Blackstreet for giving me the opportunity and to thank them for what has been a great partnership for both of us.”

Blackstreet makes control equity investments of up to $15 million in companies that have revenues up to $150 million and total enterprise values up to $75 million. Target companies are located primarily in the Mid-Atlantic, Southeastern and Midwestern United States. Blackstreet is led by Murry Gunty, Founder and Managing Partner, and Lawrence Berger, Managing Director.

“It has been an honor to be partnered with Tim. From the first day when he approached me with the idea to purchase the company until the closing day of the sale, he has been a wonderful partner,” said Mr. Gunty. “I am pleased that we were able to rescue this company from likely liquidation, fix the operations, grow the sales, and position it for what I believe will be an amazing next 10 years under Tim’s ownership. I just want to thank Tim for being such a good partner.”

“Blackstreet can provide flexible capital for all types of situations,” said Mr. Berger. “We move exceptionally fast to understand and close transactions. In the case of ACI, we purchased the business three weeks from the time we were first notified of the company being available for sale.”

Blackstreet’s sectors of interest include niche manufacturing; catalogs and internet retail; consumer and industrial products; franchisors; value added distribution; specialty retail; education and training; healthcare services and devices; multi-unit restaurants; media and communications; and business services. The firm was founded in 2002 and is headquartered in Chevy Chase, MD (www.blackstreetcapital.com).

© 2016 PEPD • Private Equity’s Leading News Magazine • 2-29-16