Archives for April 19, 2016

Brookfield Capital Closes on $3.4 Billion

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Brookfield Capital Partners (BCP) has closed on $3.4 billion for Brookfield Capital Partners IV LP, according to a recent Form D filing. Fundraising for the new fund began in May 2015.

As with earlier funds, Fund IV will invest in buyouts, platform opportunities and underperforming businesses within real asset related sectors such as energy; metals & mining; forest products; building products; construction & engineering; packaging & specialty paper; industrials and manufacturing; and financial and real estate services.

Brookfield’s private equity group is led by Joe Freedman, its Toronto-based Senior Managing Partner. Other investment professionals are located in other cities in Canada, United States, Europe, India, Australia and South America.

Brookfield Capital Partners is a subsidiary of publicly-traded Brookfield Asset Management (NYSE: BAM), an alternative asset manager headquartered in Toronto with more than $250 billion in assets under management (www.brookfield.com).

Third party placement agents for the new fund include Tokyo-based Teneo Partners (www.teneopartners.com) and Seoul-based Shinhan Investment Corporation (www.shinhaninvest.com/eng).

© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 4-19-16

AEI Finds Nemo

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Jon Nemo, an investment banker active in the aerospace and defense industries, has joined AE Industrial Partners (AEI) as its latest partner.  Mr. Nemo joins AEI from Harris Williams where he was a Managing Director and Head of the Aerospace, Defense & Government Services Group.

Mr. Nemo has completed more than 75 transactions with a total value of more than $10 billion over the past 20 years.  Some of the transactions include the sale of Wencor Group to Warburg Pincus, Haas Group to Wesco Aircraft, Ross Aviation to Landmark Aviation, and Pexco Aerospace, Schneller, and Breeze-Eastern to Transdigm Group.

“Jon’s deep knowledge of the aerospace supply chain, extensive transaction experience and breadth of industry relationships will bolster AEI’s deal-sourcing and transaction execution capabilities, while also bringing new value creation perspectives to our existing portfolio,” said David Rowe, Managing Partner of AEI. “We are excited to have Jon join our industry-leading team, and welcome him to AEI.

Before his tenure at Harris Williams, Mr. Nemo was a Managing Director in the Aerospace & Defense Investment Banking Group at Jefferies & Company, as well as a Managing Director in the Industrial Growth & Services Investment Banking Group at CIBC World Markets.

AEI invests in the aerospace, power generation and specialty industrial sectors with a specific focus on technical manufacturing, distribution and supply chain management, MRO (maintenance, repair and overhaul) and industrial service-based businesses.  Typical company targets will have from $50 million to $500 million of revenue. AEI is headquartered in Boca Raton (www.aeroequity.com).

Just last week, AEI announced the final closing of AE Industrials Partners Fund I, LP with $680 million in commitments. AEI also raised an additional $160 million for co-investment vehicles, including its legacy investment in Global Jet Capital, which AEI owns in partnership with The Carlyle Group and GSO Capital Partners.

In the last 12 months, AEI has made two platform investments for Fund I: In September 2015 it acquired Cincinnati-based Belcan, a provider of engineering services and technical staffing to the aerospace, power generation and industrial markets (www.belcancorporation.com); and in April 2015 it acquired Chicago-based Kellstrom Materials, a provider of parts support and supply chain management to airlines and air transport operators (www.kellstrommaterials.com).

AEI’s team includes partners with C-suite operating experience in organizations such as GE, Gulfstream Aerospace, Power Systems Manufacturing, Hawker Beechcraft, Landmark Aviation, Bombardier, B/E Aerospace, and NetJets.

“The addition of Jon brings our investment team to 18 experienced industry professionals, giving AEI one of the deepest talent pools in this specialized investment sector,” said Michael Greene, Managing Partner of AEI.

© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 4-19-16

Leonard Green Continues Car Wash Build

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Mister Car Wash, a portfolio company of Leonard Green & Partners, has acquired Venture Car Washes, an operator of seven car washes centered around the city of Jackson, MS.

Venture Car Washes opened its first car wash in Ridgeland, MS in 2003 and over the next ten years added car washes in Brandon, Clinton, Meridian, Flowood and two in Jackson. The company is headquartered in the Jackson suburb of Flowood, MS (www.venturecarwash.com).

The buy of Venture is a continuation of Leonard Green’s build of the Mister Car Wash platform. In February, the company acquired four Florida-based Bill’s Car Washes. The acquired stores are all located in the Orlando metropolitan area.

Leonard Green acquired Mister Car Wash in August 2014 from Onex Corporation. At the time of the acquisition, Mister Car Wash operated 134 car washes and 32 lube centers in 14 states across the country, making it the largest car wash and lube center chain in the United States.

Today, including the buy of Venture, Mister Car Wash operates 172 car washes and 32 express lubes in 20 states. According to Leonard Green, Mister Car Wash is the most acquisitive company in the car wash industry having completed over 25 acquisitions – representing over 70 stores – since 2009. The company has about 7,000 employees and services more than 15 million vehicles annually.  Mister Car Wash was founded in 1996 and is headquartered in Tucson (www.mistercarwash.com).

“We are proud to bring the Mister Car Wash experience to central Mississippi, marking another key milestone as we continue to expand our operations across the United States,” said Casey Lindsay, Director of Acquisitions for Mister Car Wash.

Mister Car Wash is the largest operator of car washes in the US and is twice the size of its nearest competitor, Autobell Car Wash, which is privately held and based in Charlotte (www.autobell.com). The top 50 car washes in the US can be found HERE.

Leonard Green invests in middle-market companies in the retail, distribution, healthcare, aerospace/defense, and consumer/business services sectors. The firm was founded in 1989 and manages approximately $15 billion of equity capital. Leonard Green is headquartered in Los Angeles (www.leonardgreen.com).

© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 4-19-16

Audax Buys Halo Branded Solutions

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Audax Private Equity has partnered with management to acquire Halo Branded Solutions, a distributor of promotional products used to support corporate branding and marketing.

Halo’s products are used as trade show giveaways, employee incentives, safety gifts, reward programs, and healthcare promotional products. The company’s products are numerous and are group in such categories as auto home and tools; gifts and awards; calendars; key chains and tags; novelty items and toys; outdoor and leisure products; technology; wellness and safety; pens and writing products; bags and totes; drink ware; clothing; food and beverage; stationery; and towels. The company serves customers in the agriculture and farming, automotive, construction, finance, healthcare, and real estate sectors. Halo (formerly known as Lee Wayne Corporation) was founded in 1952 and is headquartered 50 miles northeast of Moline in Sterling, IL (www.halo.com).

No changes in management or operating direction are planned as part of the transaction. “Our senior management team invested alongside Audax in this transaction,” said Marc Simon, CEO of HALO. “Our team is focused on delivering the greatest value proposition for selling professionals in our industry. Our team’s passion and experience are the real assets in this partnership.”

Audax estimates that promotional products are a $20 billion per year industry. “We are impressed with Halo’s leadership position in an industry that is positioned for strong growth. The loyalty of their sales team, passion of their support staff, and vision of their leadership team provide an attractive platform for continued impressive financial performance,” said Geoffrey Rehnert, Co-CEO of Audax.

The Audax Group makes control investments of $10 million to $100 million in middle market companies with transaction values of $25 million to $500 million. Sectors of interest include industrial manufacturing; energy; outsourced industrial services; consumer products; healthcare devices and services; non-asset based logistics; technology; aerospace & defense; business services; and direct marketing. The firm was founded in 1999 and has offices in Boston, New York and Menlo Park (www.audaxgroup.com).

“We are very pleased with our new partners at Audax. They are a prestigious investment firm with a proven track record of building success with their portfolio companies,” said Mr. Simon.

© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 4-19-16

Wynnchurch and Comvest Exit U.S. Pipe

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Wynnchurch Capital and Comvest Partners have sold their portfolio company USP Holdings Inc. (US Pipe) to Forterra Building Products. Wynnchurch and Comvest acquired US Pipe through a divestiture from Mueller Water Products in April 2012.

US Pipe is a manufacturer of ductile iron pipe products, fittings and joint restraints that are used in drinking water and wastewater systems. Customers include distributors, residential and commercial construction contractors, utilities, and government municipalities.  The company is headquartered in Birmingham, AL (www.uspipe.com).

US Pipe was founded in 1899 as the United States Cast Iron Pipe and Foundry Company and at that time was responsible for approximately 75% of the production capacity of cast iron pipe in the United States.

Over the past four years, Wynnchurch and Comvest have grown US Pipe both organically and through five add-on acquisitions. “Wynnchurch and Comvest have been valued partners as we have continued to build on our position as the leading provider of ductile iron pipe products in the US,” said US Pipe CEO Paul Ciolino. “Each firm has significant investment and operational expertise, which helped management grow the business, drive continuous improvement and execute on our strategy.  In addition, Wynnchurch and Comvest were critical in leading and executing several strategic acquisitions furthering our efforts in becoming a full-service, world class organization.”

Wynnchurch Capital makes investments of $10 million to $90 million in middle-market companies that have revenues of $5 million to $500 million. Sectors of interest include niche manufacturing, business and industrial services, energy and power services, logistics, transportation and value-added distribution. The firm was founded in 1999 and is located in the Chicago suburb of Rosemont with additional offices in Detroit and Toronto (www.wynnchurch.com).

Comvest Partners provides debt and equity to middle-market companies. For debt investments the firm will invest from $2 million to $20 million per transaction in companies with $10 million to $200 million of revenue that have positive or negative EBITDA. For equity investments the firm will invest from $25 million to $100 million of equity per transaction in companies with $15 million to $500 million of revenue that have positive or negative EBITDA. Comvest is based in West Palm Beach (www.comvest.com).

Forterra Building Products is a provider of infrastructure and water management products and a manufacturer of concrete and clay building products. Company divisions include Forterra Pipe & Precast, Forterra Pressure Pipe, Forterra Structural & Specialty Products, and Forterra Brick. Forterra employs approximately 5,400 people and has more than 125 facilities. The company is based in Irving, TX (www.forterrabp.com).

Moelis & Company (www.moelis.com) was the financial advisor to US Pipe and Foley & Lardner (www.foley.com) provided legal services.

© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 4-19-16