Archives for April 21, 2016

Brazos Exits Southern Tide

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Brazos Private Equity has sold Southern Tide, a lifestyle apparel brand, to Oxford Industries at an enterprise value of $85 million. Brazos invested in Southern Tide in August 2013 with capital from its $715 million Brazos Equity Fund III which was raised in 2008.

Southern Tide is known for its extensive selection of men’s shirts, pants, shorts, outerwear, ties, swimwear, footwear and accessories.  The company recently launched an expansion of its women’s line and now offers a complete women’s collection.  Southern Tide’s products include a collegiate line featuring nearly 50 colleges and universities.  The company’s products are sold through its website and at Nordstrom, Von Maur and more than 850 specialty retailers in more than 45 states, the Virgin Islands and Bermuda. Southern Tide was founded in 2006 by Allen Stephenson and is based in Greenville, SC (www.southerntide.com).

During Brazos’ term of ownership Southern Tide added sales channels, expanded its product line and enlarged its geographic footprint. “We could not be more pleased with the success of Southern Tide,” said Randall Fojtasek, Co-Founding Partner and Co-CEO of Brazos. “Since our investment in 2013, the company has expanded its wholesale distribution channels, grown its e-commerce presence, invested in supply chain and logistics, and continued the development of its men’s and women’s lines. The management team’s talent, hard work and skillful execution allowed the company to capitalize on these growth opportunities.”

Brazos makes equity investments of $25 million to $100 million in middle-market companies with enterprise values from $50 million to $500 million. Sectors of interest include consumer, healthcare, commercial & industrial, and business services. Brazos has approximately $1.4 billion of equity capital under management and is based in Dallas (www.brazospartners.com).

“The partnership with Brazos has been instrumental in the value creation process and has positioned our company for continued strong performance,” said Chris Heyn, CEO of Southern Tide. “We are grateful for the counsel and support the Brazos team has given us over the past three years as we expanded our business. This is an exciting time for Southern Tide and we look forward to beginning the next phase of our growth as a member of the Oxford family of brands.”

Oxford Industries (NYSE:OXM) is a clothing retailer that specializes in high-end clothing and apparel. The company’s brands include Tommy Bahama, Lilly Pulitzer, Oxford Golf and Lanier Clothes. Oxford’s relationship with Southern Tide goes back to 2009 when it began providing sourcing and production services to Southern Tide. Oxford Industries was founded in 1942 and is headquartered in Atlanta (www.oxfordinc.com).

© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 4-21-16

GP Investments to Buy World Kitchen

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GP Investments Acquisition Corp., the publicly traded acquisition arm of GP Investments, has entered into an agreement to acquire WKI Holding Company, the parent company of World Kitchen, LLC, a manufacturer and marketer of houseware products, at an enterprise value of approximately $566 million. The projected 2016 adjusted EBITDA of World Kitchen is $78 million which calculates to a 7.2x valuation. The transaction is expected to close in July 2016.

World Kitchen manufactures and markets glass, glass ceramic and metal cookware; bakeware; tabletop products; and cutlery. Company owned and licensed brands include CorningWare, Pyrex, Corelle, Revere, EKCO, Baker’s Secret, Magnalite, Chicago Cutlery, Snapware and OLFA. The company employs about 3,000 people and has manufacturing and distribution operations in the United States, Canada, and Asia-Pacific regions. World Kitchen is led by Carl Warschausky, President and CEO and is headquartered in the Chicago suburb of Rosemont (www.worldkitchen.com).

GP Investments Acquisition Corp. (GPIAC) was created by GP Investments in May 2015 through an IPO that raised $172 million for the purpose of identifying investment opportunities in the United States or Europe in the consumer goods, services and retail sectors.  GP Investments is an alternative investments firm with 23 years experience in corporate investing. Since founding in 1993, the company has raised $5 billion from international investors and has invested in more than 50 companies across 15 sectors.  GP Investments has offices in Sao Paulo, New York, and Zurich (www.gp-investments.com).

“World Kitchen presents a unique investment opportunity, with significant long-term, high-growth potential,” said Antonio Bonchristiano, CEO of GPIAC and GP Investments.  “The company is a proven product innovator, with an international footprint across retail, online and other channels.  We believe the company will be well positioned to continue and amplify the trend of organic growth, increase efficiencies as the business continues to scale, and take advantage of considerable sector consolidation opportunities.”

Citigroup and BMO Capital Markets are providing $275 million in new debt to support the transaction.

Citigroup served as GPIAC’s capital markets advisor, UBS served as GPIAC’s financial advisor, and Duff & Phelps served as financial advisor to the Special Transaction Committee of the Board of GPIAC.

Skadden, Arps, Slate, Meagher & Flom served as legal advisor to GPIAC. Morgan Stanley & Co. served as financial advisor, and Latham & Watkins and Davis Polk & Wardwell served as legal advisors to World Kitchen.

© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 4-21-16

Staple Street Acquires Mid-States Supply

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Staple Street Capital has acquired the assets of Mid-States Supply Company, a distributor of industrial valves, pipe, automation products, fittings, steam specialty items and controls. The transaction was completed by a stalking horse bid through Section 363 of the US Bankruptcy Code.

Mid-States’ customers are active in the refining, oil and gas, industrial and commercial markets. In addition to its distribution operations, Mid-States provides valve actuation, custom fabrication and retrofitting, steam audits and management, and just-in-time and on-site inventory management programs.  The company is based in Kansas City (www.midcoonline.com).

“We are excited to acquire Mid-States and provide the capital, operating and strategic resources to position the company for long term growth,” said Staple Street in a released statement. “We plan to conservatively capitalize the company and to invest in the Mid-States’ people, processes, and systems to grow the business and further differentiate its product offerings.”

Staple Street Capital makes control investments of $15 million to $75 million in companies with revenues of $50 million to $500 million. Industries of interest include business services; chemicals; communications, media and software; consumer and retail; distribution and logistics; energy; financial services; healthcare; and industrial and manufacturing. Staple Street is currently investing out of Staple Street Capital II, LP, which closed at its hard cap of $265 million in April 2015. The firm was co-founded by its managing directors Stephen Owens and Hootan Yaghoobzadeh and is based in New York (www.staplestreetcapital.com).

“Staple Street’s emphasis on providing value added resources, commitment to operational excellence and continuous improvement, and conservative approach to financial leverage makes them a great partner for Mid-States,” said Ben Hurst, Mid-States’ CEO. “These are the ingredients we need in a partner to grow and strengthen our position in the industry.”

© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 4-21-16

American Securities Buys NAPA from Moelis

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American Securities has acquired NAPA Management Services Corporation, nationally known as North American Partners in Anesthesia (NAPA). Leonard Green & Partners and NAPA’s management team co-invested with American Securities on this investment. NAPA was acquired from Moelis Capital Partners which purchased the company in April 2011.

NAPA is a provider of outsourced anesthesia and perioperative (refers to the three phases of surgery -preoperative, intraoperative, and postoperative) management services to hospitals, ambulatory surgery centers, and physician offices. The company also provides pain management services to chronic pain management offices. NAPA, led by its CEO Dr. John Di Capua, has nearly 800 anesthesiologists and more than 700 nurse anesthetists and operates in 12 states. The company was founded in 1986 and is based on Long Island in Melville, NY (www.napaanesthesia.com).

“Hospitals and other healthcare providers are increasingly focused on partnering with service providers of scale to drive quality patient outcomes and efficiency,” said Marc Saiontz, Managing Director at American Securities.  “The company’s clinically focused management team and organizational scale position NAPA for a strong future with numerous growth possibilities.  We look forward to supporting John and the rest of NAPA’s team in the next stage of their corporate evolution.”

American Securities invests in businesses with $200 million to $2 billion of revenue and $50 million to $200 million of EBITDA.  Sectors of interest include industrial manufacturing, specialty chemicals, aerospace and defense, energy, business services, healthcare, media, restaurants, and consumer products. The firm has more than $15 billion of capital under management and has offices in New York and Shanghai (www.american-securities.com).

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).

Moelis Capital Partners, based in New York, was founded in 2007 in connection with the formation of investment bank Moelis & Company.  The firm manages $870 million of committed capital and specializes in traditional private equity investments in the middle market (www.moeliscapital.com).

Deutsche Bank (www.db.com), Ares Capital (www.arescapitalcorp.com), and Crescent Mezzanine (www.crescentcap.com) provided financing to support the acquisition. Moelis & Company and Harris Williams acted as financial advisors to NAPA.

© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 4-21-16