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Archives for March 2016

AUA Adds-On to Raymundos

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noga 1Raymundos Food Group, a portfolio company of AUA Private Equity Partners, has acquired Noga Dairies, a maker of yogurts, drinkable yogurts and other dairy products. The acquisition of Noga was completed in partnership with co-founder Zalman Leinson who will continue as Noga’s president under Raymundos’ ownership.

nogi nf12Noga Dairies is a certified organic developer, maker and marketer of drinkable yogurts, dahi (Indian style yogurt), Greek and Swiss style yogurts, refrigerated dips and other specialty and ethnic dairy products. Company owned brand names include Noga Delite and BioChoice. Noga also makes and sells products through partnerships with third-party brands and retailers.  The company’s products are all-natural and contain no preservatives, with many providing live and active probiotic cultures. Noga was founded in 1992 by Zalman Leinson and Eli Paz and is based on Long Island in Farmingdale, NY (www.nogadairy.com).

raymundos nf1AUA acquired Raymundos Food Group, a manufacturer and marketer of refrigerated snacks and desserts, in February 2016. Raymundos’ portfolio of gelatins, flans, puddings and other ready-to-eat products are distributed through mass retailers, conventional grocery retailers, as well as through independent and local Hispanic retailers.  According to the company, its flan products (an open pastry or sponge cake containing a sweet or savory filling) have the highest market share of any flan product in the US. Raymundos was founded in 1997 and is headquartered in the Chicago suburb of Bedford Park, IL (www.raymundos.com).

Steven Flyer nf3According to AUA, the buy of Noga will help accelerate Raymundos’ expansion into adjacent refrigerated categories and diversify its product lines. “The acquisition of Noga will allow Raymundos to continue to diversify its refrigerated products offering by providing healthy and all natural options to our customers while allowing Raymundos to continue to focus on ethnic specialty items,” said Steven Flyer, a partner at AUA.

The AUA transaction team was led by Mr. Flyer, principal Kyce Chihi, senior associate Ari David, and associate Te’Rhon O’Neal.

AUA Private Equity Partners makes equity investments in companies in the consumer, media and business services sectors with a particular focus on family-owned businesses and companies benefiting from the growth of the US Hispanic population. The firm invests from $15 million to $50 million of equity in companies that generate at least $3 million of EBITDA. AUA is based in New York (www.auaequity.com).

Wintrust Financial (www.wintrust.com), which provided the original financing for the acquisition of Raymundos by AUA, provided additional debt to back the buy of Noga Dairies. McDermott Will & Emery (www.mwe.com) provided legal counsel to AUA Equity.

© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 3-31-16

Teachers’ PE Investments Earn 32% in 2015

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OTPP NF1Ontario Teachers’ Pension Plan (Teachers’)  had a rate of return on investments of 13.0% for the year ended December 31, 2015, resulting in an increase in net assets to a record $171.4 billion from $154.5 billion at the end of 2014.

Investment earnings for the year were $19.6 billion, up from $16.3 billion in 2014. Measured against a consolidated investment benchmark of 10.1%, the plan’s excess return of 2.9 percentage points resulted in$4.2 billion in value added.  Since the plan’s inception in 1990, total investment income has accounted for 79% of the funding of members’ pensions, with the other 21% coming from member and government contributions.

The value of the plan’s public and private equity investments totaled $77.5 billion at year-end, up from $68.9 billion at December 31, 2014. The investment return in the equities portfolio of 17.7% was ahead of the 14.7% benchmark. Private equity investments rose to $28.4 billion at year-end from $21.0 billion a year earlier. Private equity’s investment return was 32.3%, compared to the 18.1% benchmark.

jane rowe nf4Teachers’ Private Capital (TPC) manages the group’s private equity investments and is led by Jane Rowe, senior vice-president. TPC was launched in 1991 and has invested in more than 300 companies and funds, deploying more than $35 billion in capital. The group has offices in Toronto, New York and London (www.teachersprivatecapital.com).

The Teachers’ plan had a funding surplus of $13.2 billion at January 1, 2016, the third surplus in as many years, and was 107% funded at the start of the year, based on current contribution and benefit levels.

Fixed income had $69.1 billion in assets at year-end, compared to $65.6 billion at December 31, 2014. The one-year return of 5.9% was in line with the benchmark return of 6.0%. Natural resources investments were $10.2 billion at year-end, compared to $11.9 billion at December 31, 2014. The one-year return of -1.3% was ahead of the benchmark return of – 6.1%.

Real assets, a group that consists of real estate and infrastructure, had total assets of $40.6 billion at year-end, compared to $34.7 billion a year earlier. The real estate portfolio, managed by the plan’s subsidiary Cadillac Fairview, totaled $24.9 billion in assets at year-end and returned 12.9%, exceeding the 8.0% benchmark. The infrastructure portfolio had $15.7 billion in assets at year-end, up from $12.6 billion a year earlier. Infrastructure’s investment return of 21.4%, compared to the 14.3% benchmark.

Ontario Teachers’ Pension Plan, led by president and chief executive officer Ron Mock, and chief investment officer Bjarne Graven Larsen, is one of Canada’s largest and most active pension investors. Teachers’ portfolio of assets, 80% of which is managed in-house, has earned an annualized rate of return of 10.3% since the plan’s founding in 1990. Teachers’ has offices in Toronto, Hong Kong and London (www.otpp.com).

© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 3-31-16

DFW Invests in Superior Controls

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superior controls nf2DFW Capital Partners has made an investment in Superior Controls, a provider of systems integration and automation services to companies in the biotechnology industry.  DFW’s investment in Superior Controls will be the seventh platform company in its current fund, DFW Capital Partners IV, LP.

superior controls f22Superior Controls’ services include system integration, testing and validation, and ongoing maintenance of automated manufacturing systems. Many of the company’s engineers are located on-site ensuring that customers remain in compliance at all times with manufacturing standards specified by the FDA and other regulatory organizations. The company averages 90% repeat business year-over-year and has performed work in 24 states and 12 countries.

Superior has a 24,000 sq. ft. facility in Seabrook, NH (about 40 miles north of Boston) that provides office space, documentation storage, equipment staging, calibration and testing operations. The company was founded in 1993 and employs more than 40 automation professionals (www.superiorcontrols.com).

Superior’s two founders, Rick Pierro and Mark LaRoche, remain shareholders in the company and will continue in their current management roles under DFW ownership. “We founded Superior on the simple principle that taking good care of our employees and partners would lead to growth and success with our customers,” said Mr. Pierro. “We are very pleased to be partnering with DFW Capital and look forward to their support, vision and guidance in helping Superior Controls continue its growth and success.”

DFW Capital Partners invests in lower middle-market service companies, with an emphasis on healthcare and outsourced business and industrial support services.  The firm is headquartered in Teaneck, NJ, and maintains an office in Chevy Chase, MD (www.dfwcapital.com).

Doug Gilbert nf1“We are delighted to partner with Rick, Mark and the entire Superior Controls team in helping them continue their history of growth and industry leadership,” said Doug Gilbert, a DFW partner.  “We are excited to help expand Superior Controls’ capabilities and geographic footprint through strategic investments in the business.”

Boston-based investment bank C.W. Downer (www.cwdowner.com) was the financial advisor to Superior Controls. The C.W. Downer team included Wade Aust, managing director and partner; Greg Fanikos, director; and analysts Jon Tetirick and Mike Fernandes.

wade aust nf1“The founders of Superior Controls have built a rapidly growing company with an innovative service model and exceptional profitability,” said Mr. Aust. “These attributes resulted in strong interest from both strategic investors and financial sponsors and allowed us to maximize value for our client.”

Alcentra Capital (www.alcentracapital.com) provided debt financing and made an equity co-investment alongside DFW and management.

© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 3-31-16

Riverside Invests in Bentley Laboratories

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bentley nf1The Riverside Company has made a minority investment in Bentley Laboratories, a formulator and outsourced manufacturer of products for the beauty and over-the-counter pharmaceutical industries.

bentley nf11Bentley’s product portfolio includes creams, lotions, gels, powders and fragrances used for skin care, hair care, cosmetics, and bath and body products. In addition to its manufacturing capabilities, Bentley has a laboratory and research department which develops formulations for customers. Bentley was founded in 1982 and is led by CEO Brian Fitzpatrick and President Greg Torchiana. The company is headquartered just outside of New York in Edison, NJ (www.bentleylabs.com).

hal greenberg nf1“Unlike many contract manufacturers that simply fill orders, Bentley is able to help formulate and develop products as well,” said Riverside Managing Partner Hal Greenberg. “We see many compelling avenues for growth at Bentley.”

riverside nf11The Riverside Company is a global private equity firm focused on investing in and acquiring growing businesses valued at up to $300 million. Since its founding in 1988, Riverside has invested in more than 420 transactions. The firm’s international portfolio includes more than 80 companies. Riverside is headquartered in New York with additional offices in Atlanta, Chicago, Cleveland, Dallas, Los Angeles, San Francisco, and London (www.riversidecompany.com).

In the past few years, Bentley has invested significantly in IT, equipment, management and training. “Riverside is eager to work with the company to accelerate its expansion through both organic growth and add-on acquisitions,” said Riverside Partner Michael Kessler.

Working with Mr. Greenberg and Mr. Kessler on the transaction for Riverside were Vice President Jay Reynolds and Associate Director, Origination Cheryl Strom.

Loeb & Loeb (www.loeb.com) provided legal advice to Riverside and WeiserMazars (www.weisermazars.com) provided accounting services.

New York-based investment bank Carriage Hill (www.carriagehill.com) advised Bentley and Giordano Halleran & Ciesla (www.ghclaw.com) provided legal services.

© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 3-31-16

Trive Capital Invests in Short Line Railroad

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IANR nf11Trive Capital has made an investment in Iowa Northern Railway Company (IANR), a short line railroad operating 250 miles of track in eastern and northern Iowa. IANR serves regional customers in the grain, fertilizer and specialty chemical markets.   The railroad was originally built in the 1870’s, and has been owned and operated by the Sabin family since 1994.

IANR nf11IANR’s main line track runs from Manly in north central Iowa though Waterloo and terminates in Cedar Rapids. The railroad also operates several branch lines that connect to the main track.  Given its geographic location, IANR primarily serves customers in the corn and ethanol end markets. The company also provides transportation to customers in the agriculture, energy, and manufacturing sectors and offers support services to Class I railroads.

The investment by Trive backed a recapitalization of the business by IANR senior management which includes members of the Sabin family. “We are excited to partner with Trive”, said Dan Sabin, the president of IANR. “There is tremendous opportunity to drive economic development along the line, as well as to grow into new markets and service offerings. IANR chose to partner with Trive based on their collaborative, forward-thinking approach, flexibility and commitment to growth.”

IANR was formed in 1984 following the liquidation of the assets of the Chicago, Rock Island & Pacific Railroad Company. A group led by Dan Sabin took over management of the line in 1994. At that time the railroad handled 15,000 revenue cars annually and the average track speed was less than 10 mph. The railroad has invested millions in bringing the line up to a state of good repair while improving reliability and customer service, and currently handles approximately 60,000 revenue cars annually.

Chris Zugaro nf1“Trive pursues investments in businesses that we believe exhibit long term strategic viability, and which have opportunity for transformational value creation,” said Chris Zugaro, a Partner at Trive. “We believe IANR meets these criteria, and has an exceptional team with a shared strategic vision.”

Trive Capital invests from $10 million to $60 million in North America headquartered companies with revenues of $30 million to $500 million. Sectors of interest include automotive & transportation; aerospace & defense; building products; construction & infrastructure; consumer goods; energy services; healthcare; manufacturing and industrials; chemicals; distribution; business & professional services; and communications. The firm was founded in 2012 by Conner Searcy, Managing Partner, and Chris Zugaro, Partner. Trive Capital is based in Dallas (www.trivecapital.com).

David Stinnett nf1“IANR’s railroad is a strategic transportation asset within its region, delivering critical logistics service to manufacturers, chemical producers and multiple agricultural customers that have facilities along and near the line,” said David Stinnett, a Managing Director at Trive. “Our firm is eager to work with management to pursue additional growth avenues, invest in current and future assets, and support continuous improvement.”

IANR is headquartered in Cedar Rapids and also has offices, repair and maintenance shops and yard facilities in Manly, Greene, and Waterloo (www.iowanorthern.com).

© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 3-31-16

Ridgemont Adds-on to APE

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corrosion specialties nf1APE Companies, a portfolio company of Ridgemont Equity Partners since September 2014, has acquired Corrosion Specialties, a distributor of corrosion control equipment and consumable products such as abrasive media.

corrosion grit nf13Corrosion Specialties (CSI) serves the transportation, manufacturing, and energy industries. The company has two distribution centers – one in Duluth, GA (headquarters) and the other in Jacksonville, FL. The company is owned by Matt and Andy Steinmann (www.corrosionspec.com).

“The buy of CSI provides APE with geographic market expansion into the Southeast, end user diversification and a larger product and service offering,” said Kevin Willis, CEO of APE Companies.

APE Companies is a distributor of abrasive media, blast and paint equipment, and blast and paint parts and accessories that are sold to contractors who maintain and repair industrial facilities and equipment such as petrochemical infrastructure, offshore drilling platforms, shipyards, and oil and gas pipelines. Operating subsidiaries of APE include Abrasive Products & Equipment, BKW Environmental, Sharpjet and now Corrosion Specialties. The company is headquartered near Houston in Deer Park, TX (www.apecompanies.com).

ridgemont nf3Ridgemont Equity Partners focuses on middle market buyout and growth equity investments of $25 million to $100 million. The firm invests in the following sectors: basic industries and services; energy; healthcare; and telecommunications, media and technology. Ridgemont Equity Partners is headquartered in Charlotte (www.ridgemontep.com).

© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 3-30-16

Castanea Invests in Jeni’s Splendid Ice Creams

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jenis nf1Castanea Partners has made an investment in Jeni’s Splendid Ice Creams, a retailer and wholesaler of branded artisanal ice creams. Castanea becomes the sole outside investor in the company alongside founder Jeni Britton Bauer; her husband, Charly Bauer; her brother-in-law, Tom Bauer; and friend and company CEO John Lowe.

jenis nf11Jeni’s Splendid Ice Creams is a multi-channel retailer of ice creams with 23 company-owned stores, an e-commerce presence, and distribution through the large retail grocery channel. The company only uses whole ingredients and dairy from grass-pastured cows rather than synthetic flavorings and commodity ice cream mix. Jeni’s is a certified B Corporation (B Corps are for-profit companies certified by the nonprofit B Lab to meet standards of social and environmental performance, accountability, and transparency). The company was founded in 2002 by Ms. Britton Bauer and is headquartered in Columbus (www.jenis.com).

steve berg nf1“Jeni’s created the artisan category in ice cream—and clearly leads it,” said Steve Berg, Managing Partner at Castanea. “They have a great team, strong leadership, and amazing product. They’ve built their business as a community and are blazing a path for the next generation of better businesses and the good food movement. We think Jeni’s is the next great American ice cream company and look forward to supporting their growth.”

castanea-nf4Castanea Partners invests from $15 million to $150 million in companies that operate in the consumer brands, marketing services, and information services sectors. Castanea participates in leveraged buyouts, growth and acquisition equity investments, and operationally challenging situations. The firm is currently investing from its fourth fund, a $600 million fund that targets companies with enterprise values up to $250 million. Castanea is headquartered near Boston in Newton, MA (www.castaneapartners.com).

“There are a lot of private equity firms. We chose veterans who have proven to be great collaborators and great people,” said Mr. Lowe, who added that Jeni’s and Castanea have been in discussions for more than two and a half years. “They’ve proven they understand who we are as a company and bring a wide range of expertise from which we will benefit. We are very excited they are joining us on this journey.”

Jeni Britton Bauer nf1“I have a vision for what ice cream can be,” said Ms. Britton Bauer, “and we aren’t there yet. It’s a vision I could only begin to understand after 20 years of making ice cream and talking with customers over the counter. I’m not talking about creating new flavors but about improving the quality of ice cream—body and texture—in ways that haven’t been done before. The hardest thing for an ice cream maker to do is to truly innovate in this space. Our new partnership with Castanea will allow us to do that.”

North Point Advisors (www.nptadvisors.com) was the financial advisor to Jeni’s and Financo (www.financo.com) served as the financial advisor to Castanea.

© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 3-30-16

Yukon Backs Grey Mountain Recap of Binswanger

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binswanger nf1Grey Mountain Partners has completed a recapitalization of Binswanger Enterprises, an installer and retailer of architectural glass and aluminum products. Yukon Partners provided mezzanine capital to support the recapitalization and also acquired a minority equity interest as part of the transaction.

binswanger nf11Binswanger Glass is a designer, retailer, and installer of architectural glass and aluminum products to the construction, residential, and automotive markets. Binswanger’s customers include commercial property managers and building owners, retail store owners, general contractors, insurance companies, vehicle owners, and retail customers. The company was founded in 1872 and has 66 locations across 15 states.  Binswanger is headquartered in Memphis (www.binswangerglass.com).

Grey Mountain acquired Binswanger in December 2011. Since that time the firm has completed two add-on acquisitions for the company. Signature Glass, a commercial glazing contractor of curtain wall and window wall systems, storefront and entrance systems, and in-house fabrication of aluminum framing systems, was added-on to Binswanger in September 2015; and in February 2015, Illinois Glassworks, an installer of custom shower enclosures, mirrors, table tops, and architectural glass and glazing was acquired.

“Following strong organic profitable growth and two successful growth acquisitions in 2015, this recapitalization with Yukon Partners is an important next step for Binswanger,” said Will Pucillo, a vice president at Grey Mountain Partners.

yukon nf1Yukon Partners makes subordinated debt and equity investments of $10 million to $40 million in middle market, private equity sponsored business transactions.  The types of transactions that Yukon invests in include buyouts, growth and platform strategies, recapitalizations, mergers & acquisitions, public- to-private buyouts, and refinancings. The firm is based in Minneapolis (www.yukonpartners.com).

“Binswanger is very excited to partner with Yukon Partners as the company continues to profitably grow its architectural glazing and auto glass businesses across our semi-national footprint,” said Binswanger Chief Executive Officer Tim Curran.

grey mountain nf12Grey Mountain Partners invests up to $75 million in control acquisitions of companies with enterprise values between $30 million and $150 million. Sectors of interest include aerospace & defense, building products & materials, business process outsourcing, diversified manufacturing, energy & power, financial services, food & beverage, healthcare services & technology, industrial services, packaging, professional services, specialty chemicals, technology, transportation & logistics, wholesale and distribution. Grey Mountain was founded in 2003 by Managing Partners Rob Wright and Jeff Kuo and is based in Boulder with additional offices in Minneapolis and Pittsburgh (www.greymountain.com).

© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 3-30-16

Advent Gets Physical with Buy of ATI

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ATI NF1Advent International has agreed to acquire a majority ownership interest in ATI Physical Therapy, a provider of outpatient physical therapy, from KRG Capital Partners.

ATI nf12ATI Physical Therapy is a nationally-recognized rehabilitation provider specializing in physical therapy, work conditioning, aquatic therapy, hand therapy, sports medicine, women’s health, complimentary injury screenings, and other specialty services. ATI operates more than 500 clinics in 19 US states and is a market share leader in each of its top nine markets with a first or second market share position based on store count. In 2015, ATI’s facilities served nearly 300,000 patients. The company was founded in 1996 and is headquartered in the Chicago suburb of Bolingbrook (www.atipt.com).

John Maldonado nf1“ATI has become a leader in its chosen markets and we see a number of avenues for continued growth and expansion,” said John Maldonado, a Managing Director at Advent. “ATI is a high-quality operator with best-in-class clinics, a strong leadership team and active de novo and acquisition strategies that we believe will enable it to grow by opening new ATI clinics and by being a primary consolidator in a fragmented industry.”

The $15 billion outpatient physical therapy market is large and growing, with more than18,000 freestanding clinics in the US. Advent expects the market will continue to grow based on the aging population’s need for physical therapy and the increased utilization of physical therapy by a wide range of age groups resulting from the growing awareness of physical therapy’s clinical value and cost effectiveness.

ATI’s current management team, led by CEO Dylan Bates, will retain a significant minority stake in the company and continue to lead the company under Advent ownership. “The outpatient physical therapy market in the US is large, growing and highly fragmented, and we believe that Advent’s resources and expertise with healthcare services companies will help us to execute and accelerate our expansion strategy,” said Mr. Bates.

As part of the transaction, Advent Operating Partner Dr. Chris Krubert will join ATI’s Board of Directors. Dr. Krubert previously was the Chief Executive Officer of ApolloMD, a healthcare professional services firm.

advent international nf1Advent International is owned and operated by 45 partners and governed by a group of 14 managing partners. The firm has offices in 16 countries and employs 170 investment professionals across Western and Central Europe, North America, Latin America and Asia. Founded in 1984 and headquartered in Boston, Advent has $42 billion in assets under management and has completed more than 300 buyout and private equity transactions (www.adventinternational.com).

Jefferies (www.jefferies.com) and UBS (www.ubs.com) are serving as financial advisors to ATI on the transaction. Hogan Lovells (www.hoganlovells.com) is serving as ATI’s legal counsel.

Advent’s financial advisor is Barclays (www.barclays.co.uk), and Weil, Gotshal & Manges (www.weil.com) and McDermott Will & Emery (www.mwe.com) are serving as the firm’s legal advisors.

© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 3-30-16

Arsenal Building Foam Empire

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foam king nf1Arsenal Capital Partners has acquired Elite Foam and signed an agreement to acquire the foam production assets of Hickory Springs Manufacturing Company (HSM Foam). These transactions follow the firm’s March 2016 acquisition of Pacific Urethanes, a developer and seller of polyurethane foam products. The three companies will operate under the ELITE Comfort Solutions name.

Timothy Zappala nf1Through the combination of Pacific Urethanes, Elite Foam, and HSM Foam, Arsenal is building Elite Comfort Solutions into a large specialty foam platform. “Recognizing the importance of regional presence, yet conformity of quality and real-time service, the combination of these businesses has immediately created a leading foam company with the scale and range of product technologies desired to support our growing customer needs anywhere in North America,” said Timothy Zappala, a partner at Arsenal and co-head of the firm’s specialty industrials group.

Elite Foam is a developer and manufacturer of specialty foam for the bedding and home furnishings industry. Brand names include CoolFlow and ThermaGel. The company is led by its president Pete Wallace who will remain with the company post closing. Elite Foam is headquartered 40 miles southwest of Atlanta in Newnan, GA (www.elitefoam.com).

pacific urethanes f1

HSM Foam is one of the largest producers of flexible polyurethane foam in North America. The company’s products are used in furniture, bedding, medical and packaging applications. Company brand names include Code*RedII – a combustion inhibitive foam; EnduroFoam – a premium performance foam; and Preserve – a bio-based polyurethane foam. HSM Foam’s operations are located in North Carolina (Conover), Arkansas (Fort Smith), Mississippi (Verona), California (Commerce) and Georgia (Americus). The company is headquartered north of Charlotte in Conover, NC (www.hsmsolutions.com).

pacific urethanes nf1Pacific Urethanes, acquired just last month by Arsenal, develops and commercializes polyurethane foam products that are used in the specialty bedding, furniture, packaging and recreational markets. The company is headquartered east of Los Angeles in Ontario, CA (www.pacurethanes.com).

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 and fine chemicals; segments of healthcare; transportation and logistics; power generation; aerospace and 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).

© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 3-30-16

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