March 23, 2016
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Archives for March 23, 2016

ORIX USA Group Launches IX Capital Partners

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orix usa nf1ORIX USA has formed IX Capital Partners, LLC, a new investment firm that is part of its majority-owned subsidiary, Mariner Investment Group.

IX Capital Partners (IXCP) will invest from $50 million to $150 million of equity capital per transaction in North America based middle-market companies.  IXCP will consider investments in a range of industries or that involve special situations. Areas of specific interest include business services, retail, consumer, industrials, telecommunications and technology.

Yoshiteru Terry Suzuki nf1IXCP is led by President and CEO Yoshiteru “Terry” Suzuki, who previously served as Co-CEO of Cerberus Japan, along with Managing Director Christopher Suan, who has joined IX Capital Partners from his position as ORIX USA’s Chief Development Officer. Before joining ORIX USA, Mr. Suan was a Managing Director at KKR. IXCP will be based in Mariner’s offices in New York and will have an additional office in Dallas.

Mariner Investment Group is an SEC-registered investment adviser that manages several direct and affiliated single and multi-strategy hedge funds, funds of funds and other alternative investments services. Founded in 1992, Mariner employs approximately 155 people in New York; London; Tokyo; Seoul; Philadelphia; Dallas; Harrison, NY; Rowayton, CT; and Summit, NJ (www.marinerinvestment.com).

roadsafe nf12IXCP has completed its first investment through the acquisition of RoadSafe Traffic Systems, a national provider of pavement marking, sign installation and traffic control services and equipment to the roadway construction, railroad and utility industries. RoadSafe has 31 branch and satellite locations and is headquartered in Chicago (www.roadsafetraffic.com).

Under IXCP ownership, the management team at RoadSafe—including CEO and President David Meirick and Chief Financial Officer Brendan Kissane—will continue leading the 1,000-plus employee company. RoadSafe was majority owned by Falcon Investment Advisors and Aperion Management. Aperion continues to have an equity interest in the company in partnership with IXCP.

ORIX USA offers senior secured, unsecured, mezzanine, equipment leasing, and structured loan credit products to private equity, corporate, real estate, and public finance sectors. ORIX USA was founded in 1981 and is based in Dallas, with additional offices in New York, London, Paris, Frankfurt, Chicago, Los Angeles, Minneapolis, Washington DC, San Francisco, and Atlanta. ORIX USA is a wholly owned subsidiary of ORIX Corporation, a Tokyo-based, publicly traded financial services company with operations in 35 countries worldwide (www.orix.com).

© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 3-23-16

Stellex Acquires Morbark

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morbark nf1Stellex Capital has acquired Morbark, a maker of equipment for the forestry, recycling, tree care, sawmill and biomass markets.

morbark nf11Morbark’s equipment includes whole tree and waste wood chippers, flails, brush chippers, horizontal and tub grinders, sawmill equipment, and material handling systems. The company, founded in 1957 by Norval Morey, operates a 1.1-million-square-foot manufacturing complex north of Lansing in Winn, MI (www.morbark.com).

“Though always difficult to leave a family business, we felt this was the right time with the right investor who can build on the legacy my father started and I have spent my entire life dedicated to,” said Lon Morey, CEO and son of the founder.  “We are confident that Stellex will be able to take Morbark to the next level of excellence and growth.”

david waxman nf1“Our acquisition of Morbark is a great fit for us. We believe the company is well positioned to grow in the coming years, and we are confident that the capital and resources we bring will fuel that growth,” said David Waxman, a Principal at Stellex.

stellex nf44Stellex invests up to $100 million per transaction in companies experiencing some form of financial, operational or industry-driven distress. Target companies will typically have revenues of less than $2 billion and will be located in the United States or Europe. Sectors of interest include aerospace; automotive; business services; consumer products; defense; energy & power; financial services; general industrial; government services; infrastructure; telecommunications & media; and transportation. Stellex has offices in New York and London (www.stellexcapital.com).

“Morbark is exactly the type of company we look to invest in – strong history, market presence, excellent products, and an outstanding workforce. In addition, we believe with the right investment and resources they represent a significant growth opportunity in the coming years,” added Mr. Waxman.

Wells Fargo Securities (www.wellsfargo.com) was the financial advisor to Morbark and Warner Norcross & Judd (www.wnj.com) was legal advisor.

© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 3-23-16

Nautic Partners Invests in Response Team 1

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response team nf1Nautic Partners has made an equity investment in Response Team 1, a provider of property restoration and renovation services. The investment was made through Nautic Partners’ seventh fund.


Response Team 1 (RT1) offers three services: mitigation, structural restoration, and multifamily renovation. RT1’s mitigation services involve “first responders” arriving at a single-family home or a multifamily/commercial property immediately after water, fire, or storm damage has occurred, in order to pump out water; dry and decontaminate the property; remove smoke and soot; and relocate household items for storage and cleaning. Structural restoration follows mitigation work and involves stabilizing the response team 1 nf33property’s structure; cleaning and repairing plumbing, electrical, and HVAC systems; and restoring interior finishes. Separately, RT1’s renovation services involve performing multi-unit interior and exterior upgrades to multifamily complexes aiming for short turnaround times that minimize vacancy periods. The company is headquartered in the Chicago suburb of Wheeling (www.responseteam1.com).

As part of the investment by Nautic Partners, RT1 has acquired three restoration businesses: Emergency Reconstruction (Raleigh, NC); JFS Construction Group (Van Nuys, CA); and Venturi Technologies (Philadelphia, PA).

eric bloom nf1Response Team 1 was founded by John Goense and Erik Bloom, former private equity investors at Goense & Company and Allstate Private Equity. “We are excited about the prospects for RT1 and our new partnership with Nautic,” said Mr. Bloom. “With the strength of our core business combined with these acquisitions, each of which is a leader in its respective geography, we are better poised than ever to serve our customers and to capitalize on the immense market opportunity before us.”

“RT1 enjoys strong relationships and high customer satisfaction with property & casualty insurance carriers, insurance adjusters, and multifamily operators,” said Doug Hill, Managing Director of Nautic. “We are enthusiastic to partner with John and Erik to continue RT1’s tradition of excellence and to support the future growth of the company, which will come both organically and through capitalizing on the substantial consolidation opportunity that exists in the company’s fragmented market.”

nautic nf22Nautic Partners is a middle-market private equity firm with over $2.5 billion of equity capital under management. Nautic targets majority equity investments of $25 million to $75 million. Sectors of interest include business services, manufacturing, and healthcare. The firm was founded in 1986 and is headquartered in Providence, RI (www.nautic.com).

goense nf1“We believe Nautic is an ideal partner for us in the next stage of RT1’s growth,” said John Goense, Chairman and CEO, Response Team 1. “Nautic shares our strategic vision for RT1 to continue expanding its position in the restoration and renovation market. Moreover, Nautic’s substantial prior success with labor-intensive consolidation strategies such as GCA Services, as well as with de-centralized residential services models such as Chem-Dry, positions the firm as an experienced partner for RT1.”

Antares Capital (www.antares.com) and LStar Capital (www.lstarcap.com) provided financing for the transaction. Robert W. Baird & Co. (www.rwbaird.com) acted as financial advisor for Response Team 1.

© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 3-23-16

Clearlake Acquire That’s How We Roll

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thwr nf1Better For You Holdings (BFY), a platform company launched by Clearlake Capital earlier this month to invest in the food and health & wellness sectors, has made its first acquisition with the buy of That’s How We Roll (THWR), a provider of branded, better-for-you snacks. The buy was completed in partnership with THWR founder Aldo Zuppichini, who maintains a significant equity stake in the company. Prior to this acquisition, Clearlake had an existing ownership interest in THWR though its portfolio company Proven Brands. As part of this transaction, Proven Brands has now become a subsidiary of BFY.

thwr nf13That’s How We Roll sells better-for-you, premium snacks that are certified non-GMO and MSG-free under two brands: Mrs. Thinsters and Dippin Chips.  Mrs. Thinsters are low-calorie cookies available in a variety of flavors including Cake Batter, Chocolate Chip, Brownie Batter, Original Waffle Crisps, Pumpkin Spice, and the recently introduced Toasted Coconut. Dippin’ Chips are dippable tortilla chips offered in a variety of flavors including Veggie, Fiesta Bean, Super Grain, Original Sea Salt, and Blue Corn. THWR products are sold in over 10,000 grocery, club and mass merchant outlets across North America.

THWR will continue to be led by Mr. Zuppichini and its team of professionals including Sam Kestenbaum, Senior Vice President of Marketing and Operations, and Amy Kiley, Vice President of Sales. THWR is based northwest of New York in Fairfield, NJ (www.dippinchips.com) (www.mrsthinsters.com).

Through its partnership with Clearlake, THWR intends to develop new products and increase the company’s distribution capabilities. “Clearlake’s partnership will allow us to extend our resources for product innovation, accelerate nationwide distribution, and provide consumers with more premium healthy snack options without sacrificing taste,” said Mr. Zuppichini. “We are very excited about the future, and our team looks forward to continued growth.”

José Feliciano nf22“We are excited to partner with Aldo, Sammy, Amy, and the rest of the team at That’s How We Roll and to continue supporting the company’s growth as they strive to meet the demands of today’s health conscious, perceptive consumers,” said José Feliciano,   a co-founder and a managing partners of Clearlake. “With better for you snacks that include options such as non-GMO and gluten free in a variety of delicious flavors, we believe Dippin’ Chips and Mrs. Thinsters are well-positioned to attract consumers looking to make healthier lifestyle choices.”

clearlake nf1Clearlake Capital Group has over $3.5 billion of assets under management and invests in the following sectors: energy and power; technology, communications and business services; and consumer products and services. The firm was co-founded by Mr. Feliciano and Mr. Eghbali in 2006 and is headquartered in Los Angeles (www.clearlakecapital.com).

“Aldo and the team have fantastic retail relationships, consumer insights, supply chain capabilities and, most importantly, energy and passion, which are necessary to building a leading platform in this fast-growing category. We look forward to continuing to sponsor THWR’s position as an innovator in this highly dynamic space, and are pursuing additional investments as part of our Better For You portfolio,” said Arta Tabaee, a Principal at Clearlake who leads the firm’s efforts in the food and other consumer products and services sectors.

© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 3-23-16

LLR Invests in BenefitExpress

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benefit express nf1LLR Partners has made an investment in BenefitExpress, a cloud-based employee benefits and health exchange services provider. The investment by LLR will be used to expand sales and marketing and continue to build out the platform.

BenefitExpress’ services include online enrollment, claims reimbursement, direct billing administration, total compensation statements, reporting, benefits administration, dependent verification, billing reconciliation, payroll integration, and voluntary benefits administration. BenefitExpress was founded in 2001 by Maria Bradley and is based in the Chicago suburb of Schaumburg (www.benefitexpress.info).

Michael Sternklar nf1As part of the investment, Michael Sternklar, former head of Mercer’s North American benefits outsourcing business, will become CEO of BenefitExpress. Mr. Sternklar has more than 30 years of experience in senior positions with benefits administration companies including Fidelity Investments, Kwasha Lipton and PwC. Maria Bradley, founder and president, will remain with the company as a senior advisor and member of its board of directors.

“Maria Bradley and her management team have leveraged tremendous industry knowledge and experience to build a market-leading benefits administration platform, further distinguished by exceptional services capabilities and a loyal customer base,” said Mr. Sternklar. “Now with the capital and strategic support of LLR Partners, I am confident that BenefitExpress can accelerate new opportunities in this emerging space. I look forward to steering that growth.”

llr nf12LLR Partners invests in technology and service businesses that have annual revenues of $25 million to $250 million. The firm’s target companies include those that serve commercial and government clients in the physical and cyber security markets, as well as government contractors to the US homeland security, defense, intelligence and healthcare agencies.

Sasank Aleti nf1“Employers, brokers, insurance carriers and private exchanges are quickly recognizing their need for sophisticated software to manage communications, provide decision support, enroll employees and administer benefits,” said Sasank Aleti, a Vice President at LLR Partners. “BenefitExpress offers a configurable, scalable platform to automate this complex process. Led by Michael and the existing management team, the company has the opportunity to capture a significantly underpenetrated market.”

LLR is currently investing out of its fourth fund with $930 million of capital commitments. The firm has offices in Philadelphia and Arlington (www.llrpartners.com).

© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 3-23-16

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