Archives for April 2016

Speyside Closes Debut Fund

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Speyside Private Fund Advisers, a special situations buyout firm, has closed Speyside Equity Fund I LP with $130 million of capital commitments. The new fund was closed in less than 4 months of fundraising and was significantly oversubscribed. Investors in Fund I include institutional limited partners such as, endowments, foundations, insurance companies, fund of funds, public and private pensions, and family offices.

Since its founding in 2005, Speyside has been successful with numerous platform investments and add-on acquisitions using its own capital. Speyside made its first investment in Sweet Ovations, a food ingredient company, in 2005 and had its first exit in 2010 when it sold Stahl Specialty Company.

“With Fund I we wanted to move toward a more traditional investor base and we are grateful to welcome such high caliber institutions as partners,” said Managing Director Jeffrey Stone. “The strong response we received during the fundraising process is a testament to our team and the success we have had utilizing our own capital to generate outsized returns.

Speyside invests in chemicals, industrials, metal forming, and food ingredients businesses that typically have enterprise valuations from $20 million to $200 million, revenues from $20 million to $300 million, and are based in the United States or Western Europe. Transaction types include spin-offs and carve-outs of large multinational businesses, industry consolidations, or family-owned businesses. The firm prefers situations where there are opportunities to leverage its operating expertise to improve financial performance and create shareholder value. Speyside was founded in 2005 and is based in Detroit (www.speysideequity.com).

Speyside used GCA Savvian Advisors (www.gcasavvian.com) as its placement agent and Proskauer Rose (www.proskauer.com) provided legal counsel.

© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 4-20-16

Salt Creek Buys Sperry & Rice

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Salt Creek Capital has acquired Sperry & Rice Manufacturing Company, a maker of rubber components used in the appliance, automotive, heavy truck and bus industries.

Sperry & Rice products include rubber seals, mandrel-formed hose products, weather stripping products, pressure-sensitive applied products, colored rubber extruded products, and sponge sealing systems. The company was founded in 1946 and is headquartered northwest of Cincinnati in Brookville, IN with an additional manufacturing plant in Killbuck, OH (www.sperryrice.com).

Salt Creek Capital has named Randy Dobbs, an Executive Partner of the firm since 2015, as Sperry & Rice’s new chief executive officer. “Salt Creek Capital has been an excellent partner in identifying this opportunity and closing this transaction. I am pleased to have their support in driving the company’s future growth.”

With the close of the transaction, James Gregory, owner & CEO of Sperry & Rice, is retiring from the company. “It has been a privilege to lead this company over the past 12 years,” he said. “Randy is an exceptional executive, and I am confident that Sperry & Rice will continue to thrive under his leadership. Randy’s leadership succession and Salt Creek’s ability to provide liquidity was the combination I needed as a retiring owner.”

Salt Creek Capital invests in executive-led buyouts of companies with up to $100 million in revenue and EBITDA from $750,000 to $5 million. Sectors of interest are varied making the firm nearly industry agnostic but areas of specific interest include manufacturing, business and consumer services, distribution, and franchisors. The firm is based in Menlo Park (www.saltcreekcap.com).

Managing Director Dan Phelps led the transaction for Salt Creek Capital.

© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 4-20-16

TVV Capital Exits Indco

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TVV Capital has sold its portfolio company Indco, a manufacturer of mixing equipment. The sale generated a 3.2x return on invested capital for TVV’s second fund, Tennessee Valley Ventures II, LP.

Indco is a designer, manufacturer and distributor of industrial mixing and agitation equipment.  Products include handheld and portable mixing equipment, propellers, impellers, and dispersers, as well as related accessories such as containers, tanks, and stands. The company was founded in 1975 and is led by its president Mark Hennis. Indco is headquartered just north of Louisville in New Albany, IN (www.indco.com).

“TVV acquired Indco in 2005, and its sale generated an outstanding return for investors in our second fund,” said Andrew Byrd, President of TVV Capital. “When we purchased Indco, we saw potential for expanding their markets, accelerating product development and improving operating margins. The sale highlights our ability to identify and acquire well-managed, profitable companies in attractive niches and partner with their teams to achieve operational excellence, strong customer growth and market expansion.”

TVV Capital is a lower middle-market buyout firm focused on acquiring market-leading niche companies across a range of industries.  The firm targets companies with enterprise values from $10 million to $100 million, revenues from $15 million to $150 million, and EBITDA margins of 10 to 25 percent.  TVV Capital was founded in 1997 and is headquartered in Nashville (www.tvvcapital.com).

“As part of the sale process, we worked with the buyer to assure a smooth transition of operations. We are pleased that Indco’s key managers, including their President and Chief Financial Officer, will remain with the company post sale,” added Mr. Byrd.

Hilliard Lyons Investment Banking (www.hlinvestmentbanking.com) was the financial advisor to TVV and McKenzie Laird (www.mckenzielaird.com) provided legal services.

© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 4-20-16

Huron Keeps on Coating

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Valentus Specialty Chemicals, a portfolio company of Huron Capital Partners, has acquired the floor finishes business of Precision Technology.

Huron Capital formed Valentus in May 2014 in partnership with Ray Chlodney, John Ragazzini and Bob Taylor to pursue a buy-and-build strategy in the industrial coatings sector.  According to the Cincinnati-based ChemQuest Group (www.chemquest.com), the US coatings market is fragmented and large with annual revenues of $22 billion.

The acquired floor finishes business of Precision Technology includes the Swedish Finish and Swedish Crown product lines (an alcohol-based finish designed for use in high traffic residential and commercial areas), and the Precision Polyurethane oil-based finish product line (an oil-modified finish that provides protection to residential and commercial wood floors). Precision Technology is based in Memphis (www.pretechfinishes.com).

“This is the type of strategic add-on acquisition we envisioned when we created the Valentus platform,” said Mike Beauregard, a senior partner at Huron Capital.

Valentus closed its first investment in December 2015 with the acquisition of National Paint Industries (NPI), a manufacturer of specialty coatings used in residential and commercial flooring, industrial protective maintenance, pool, and marine applications. NPI had been owned and operated by brothers Mike and Don Schnurr, whose father founded the business in 1959. The Schnurr brothers are now shareholders in Valentus and continue to run the day-to-day operations at NPI which is based south of New York City in North Brunswick, NJ (www.ipaint.us). The production of the acquired coating businesses of Precision Technology will be move to NPI’s facility in North Brunswick.

“The NPI team has known Precision for a long time and has always thought highly of the business.  We are excited to add these products to the Valentus lineup as we look to expand our presence in the floor coatings market,” said Valentus CEO Ray Chlodney. “In partnership with Huron Capital, we are actively looking for additional complementary coatings companies as we continue to grow the Valentus platform.”

Huron Capital Partners invests up to $70 million per transaction in middle market companies that have revenues up to $200 million and EBITDAs of $5 million or more. Sectors of interest include specialty manufacturing, business services, consumer goods & services, and healthcare.  The firm was founded in 1999 and currently manages over $1.1 billion in committed equity through four private equity funds. Huron Capital Partners has offices in Detroit and Toronto (www.huroncapital.com).

Lanny Trottman, the founder and owner of Precision Technology, will retain ownership of Precision’s wood filler and wood patch products, maintenance products, and roller and brush products, which are not part of the transaction.

© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 4-20-16

Castle Harlan Exits Baker & Taylor

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Castle Harlan has sold Baker & Taylor, a distributor of books, video and music products, to Follett Corporation. Castle Harlan Partners IV, LP acquired Baker & Taylor in July 2006 in a transaction valued at $455 million.

Baker & Taylor is a distributor of physical and electronic books, videos, music products and a provider of services to libraries and retailers. The company has approximately 25,000 suppliers and sells to over 20,000 customers in 120 countries. Baker & Taylor is headquartered in Charlotte (www.baker-taylor.com).

Follett Corporation provides education technology, services, and print and digital content to pre-K and K-12 schools, and colleges in the United States and Canada. The company distributes new and pre-owned books, reference materials, digital resources, eBooks, and audiovisual materials. Follett is also the nation’s largest operator of college bookstores, with more than 1,000 campus bookshops. The company is privately held – the Follett family has owned the company for four generations – and has annual revenues of approximately $2.6 billion. Follett was founded in 1873 and is headquartered in the Chicago suburb of Westchester, IL (www.follett.com).

Castle Harlan makes control investments in middle-market companies in North America, Europe and, together with CHAMP Private Equity, in Australia. Castle Harlan has participated in eight private equity funds, five in the United States and three in Australia. Those funds totaled approximately $6 billion in capital commitments.  Castle Harlan was founded in 1987 and is based in New York (www.castleharlan.com).

Sagent Advisors (www.sagentadvisors.com) was the financial advisor to Baker & Taylor and Schulte Roth & Zabel (www.srz.com) provided legal counsel.  Jones Day (www.jonesday.com) provided legal counsel to Follett Corporation.

© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 4-20-16

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