Archives for March 29, 2016

Ridgemont Adds-on to APE

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APE 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 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 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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Castanea 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.

Jeni’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).

“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 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.”

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

ATI 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).

“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 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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Arsenal 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.

Through 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).

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, 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