Archives for May 13, 2016

Huron and Duchossois Partner Up On Loading Docks

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Huron Capital Partners and Duchossois Capital Management (DCM) have acquired a majority equity interest in Systems Inc. from the company’s current owner Ed McGuire. Mike Pilgrim, the CEO of Systems, co-invested in this transaction alongside Huron and DCM.

Systems is a manufacturer of hydraulic, pneumatic, and mechanical loading dock leveling equipment, truck restraints, and specialty dock equipment sold under the Poweramp, DLM and McGuire brand names. Customers include end-users and dealers that design, engineer, manufacture, and deliver dock equipment for use in grocery, trucking, retail and general warehousing environments.  Systems has manufacturing facilities in Germantown, WI (near Milwaukee) and Malvern, AR (near Little Rock). The company was founded in 1961 by George McGuire and is headquartered in Germantown (www.docksystemsinc.com).

At closing, Huron and Duchossois added two senior executives, Paul Reilly and Ken Goodson, to the board of directors of Systems. Both will also hold equity positions in the company. Previously, Mr. Reilly was founder & CEO of R-Bac Industries (metal fabrication), Rytec (high-performance doors), and Paul Reilly Co. (loading dock equipment). Mr. Goodson spent 29 years with Herman Miller (office furniture) most recently as executive vice president of worldwide operations.

“As a full-service loading dock solutions provider with a broad product offering, we see Systems as being well-positioned in its niche,” said Mike Beauregard, Huron Capital Senior Partner. “We think there’s a great opportunity to build on the company’s success, infuse it with technology applications, and drive a business development engine by leveraging the collective resources of Huron Capital, DCM and Messrs. Pilgrim, Reilly and Goodson.”

“Our former owner, Ed McGuire, allowed us to choose who we wanted to partner with to purchase the company and we are confident that our team has chosen well,” said Mr. Pilgrim. “Huron Capital and DCM have both demonstrated a deep knowledge of our industry, and possess years of experience working with companies in our market to professionalize their businesses and implement strategic growth plans.”

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).

The Duchossois Group is a privately held business formed in 1983 to manage companies owned by the Duchossois family. The principal operating companies of the group are The Chamberlain Group (garage door openers, and gate operators); Controlled Products Systems Group (perimeter access control systems); and Duchossois Capital Management (the family’s private investment firm). The Duchossois Group is led by Richard Duchossois and Craig Duchossois and is based outside of Chicago in Elmhurst, IL (www.duch.com)

© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 5-13-16

Spanos Barber Jesse Invests in Stat Health

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Spanos Barber Jesse & Co. (SBJ) has acquired Stat Health Management, a provider of management services to urgent care centers on New York’s Long Island. This transaction was completed by SBJ in partnership with McLarty Capital and St. Cloud Capital.

Stat Health currently has nine locations throughout Long Island. The company was founded in 2005 by Dr. Marc Salzberg and Dr. Paolo Coppola. Both will remain active with the company under SBJ ownership. Stat Health is based in Smithtown, NY (www.stathealthny.com).

“We reached a point where we realized that we wanted an experienced capital partner to continue and accelerate the expansion and growth we had achieved over the last several years,” said Dr. Coppola. “Dr. Salzberg and I believe the combination of our healthcare expertise with SBJ’s skill in building businesses will benefit patients, payors and the Stat Health organization as a whole.”

The urgent care sector is experiencing positive growth due to higher healthcare demands from an aging population and the lower cost structure of urgent care centers as compared to hospital-based emergency rooms.

“SBJ is providing capital and support to accelerate the expansion of Stat Health urgent care centers within the company’s existing geographic regions in addition to pursuing acquisitions of other urgent care operators,” said Gus Spanos, SBJ’s co-founder and managing director. “Our investment in Stat is the product of a longstanding search for opportunities in the urgent care space.” With the closing of this transaction, the company is planning to open several new urgent care centers in Suffolk County, Long Island under the “Stat Health” brand.

Spanos Barber Jesse & Co. (SBJ) was founded by Gus Spanos, Tom Barber and Bill Jesse. SBJ is classified as a Small Business Investment Company having received its license from the US Small Business Administration in February 2015.  In October 2015, SBJ held a final closing on its debut fund, SBJ Fund, LP, with total capital commitments of $204 million, exceeding its original $150 million target. The new fund invests in lower middle-market consumer, business services and healthcare services companies with up to $100 million in revenue and EBITDA from $2 million to $10 million.  SBJ has offices in San Francisco and Dallas (www.sbjcap.com).

Stat Health is SBJ’s second portfolio investment. Last summer, the firm closed on its first investment by acquiring a controlling interest in Armor Express, a provider of soft body armor and related products to law enforcement, military, correctional and public safety personnel. Armor Express is headquartered in the northern Michigan city of Central Lake (www.armorexpress.com).  SBJ partnered with Generations Management, a family office based in Traverse City, MI, on this transaction (www.generationsmgmt.com).

Kevin Tom of led the transaction for St. Cloud Capital and Christopher Smith led the investment for McLarty Capital. “Stat Health and the growing urgent care industry are on the right side of healthcare trends, with the nation grappling with its aging population and payors challenged with increasing emergency room costs,” said Mr. Tom.

St. Cloud’s investment in Stat Health was made out of its third fund, which has committed capital of $250 million. The firm makes both control and non-control investments in lower middle-market companies that have annual revenues between $10 million and $150 million.  St. Cloud typically invests from $5 million to $20 million per transaction in senior secured debt, subordinated debt, and preferred and common stock. The firm is based in Los Angeles (www.stcloudcapital.com).

McLarty Capital invests in lower middle market companies across a range of industries. Investments can take the form of senior debt, junior debt, structured equity and common equity. The firm is led by Thomas “Mack” McLarty, an Arkansas business and political leader and former White House Chief of Staff for US President Bill Clinton. McLarty Capital has offices in Washington DC, Little Rock, Huntsville, and New York (www.mclartycapital.com).

© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 5-13-16

Lariat Invests in Willowood USA

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Lariat Partners has made an investment in Willowood USA, a maker of generic crop protection products. The growth capital investment will be used by the company to fund an expansion of Willowood’s product portfolio and for market expansion.

“Lariat is providing the necessary growth capital to help Willowood make strategic hires, internally develop and opportunistically acquire new products, and enhance its sales and marketing efforts,” said Vijay Mundhra, Co-Founder of Willowood.

Willowood’s crop protection products include herbicides, fungicides, and insecticides that are used in the agriculture, turf and vegetation management industries. The company is based south of Portland in Roseburg, OR (www.willowoodusa.com).

Lariat invests in lower middle market companies that have EBITDA of $2 million to $20 million. The firm targets companies across a number of industries: food and agribusiness; energy and environmental services; consumer products; and maritime services. Lariat raised its first investment fund in July 2014 with $118 million of capital commitments. The firm was founded in January 2013 by Jay Coughlon and Kevin Mitchell and is based in Denver (www.lariatpartners.net).

“Crop protection is a sub-vertical within our food and agribusiness industry focus,” said Mr. Mitchell, Managing Partner of Lariat. “We have tracked crop protection companies for many years and based on our industry knowledge and research, our investment in Willowood’s future growth is a great fit for our CORE investment strategy.”  The CORE strategy stands for COnsumables, COnsolidations, and REcurring Revenue.

“The investment that Lariat has made in our company will fuel our growth and presence in US agriculture,” said Brian Heinze, Willowood’s President and CEO.  “We have experienced excellent growth over these past five years and this investment will ramp up our expansion and broaden our presence in markets that we have not yet penetrated.”

© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 5-13-16

Pamplona Raises $1 Billion

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Pamplona Capital Management has raised a new fund, Pamplona TMT Fund I, LP, with $1 billion in capital commitments.

The new fund will make equity investments in 12 to 15 companies that are active in the technology, media, and telecommunications (TMT) sectors. Specifically, the fund will invest in cloud computing and SaaS companies, mobile platforms and services, and industrial technologies. The fund will consider both control and minority investments; buyouts and recapitalizations; and rollups and consolidations.

“The creation of this $1 billion dedicated TMT fund shows Pamplona’s intent to actively participate in the shifting landscape inherent in these industries. We believe we have assembled the expertise and capital resources to take advantage of a number of exciting opportunities,” said Pamplona Managing Partner John Halsted.

Justin Perreault, who joined Pamplona in December 2015 to make investments in technology sectors, will be a full-time partner in the TMT fund. Mr. Perreault has over twenty years of information technology investing and operating experience, and was previously a general partner at Commonwealth Capital Ventures. Pamplona’s TMT investing team is based in Boston.

Pamplona has also announced the appointment of two additional partners to co-manage the fund, Darren Battistoni and Hiren Mankodi. Mr. Battistoni joins Pamplona from Welsh, Carson, Anderson & Stowe where he was a member of the technology investment team for eleven years and worked on a number of investments in the internet infrastructure, SaaS and cyber security sectors.  Mr. Mankodi joins Pamplona from Audax Group where he led investments in information technology, software, and industrial technology companies over the course of his twelve years with that firm.

The TMT fund already has its first portfolio company. Yesterday, Pamplona announced that it had completed a $50 million growth equity investment in Dyn, a provider of cloud-based Internet performance management services based in Manchester, NH (www.dyn.com).

Pamplona makes direct private equity, fund of hedge funds, and single manager hedge fund investments. The firm was founded in 2005 and is based in London and New York (www.pamplonafunds.com).

© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 5-13-16