Archives for June 3, 2016

Providence Joins GM and Ford in OEC

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Providence Equity Partners has agreed to acquire a majority equity stake in OEConnection, the world’s largest online automotive parts exchange. Ford and General Motors will each maintain a minority stake of 15% in the company. The transaction is expected to close by the end of June.

OEConnection (OEC) is a provider of cloud-based ecommerce services that creates an original equipment virtual parts warehouse containing nearly 50 million parts. More than 20 automotive original equipment manufacturers and more than 100,000 dealerships and independent service shops use OEC’s services to sell, buy, manage and move original equipment parts, facilitating an estimated $20 billion in annual replacement parts trade. The company was formed in December 2000 as a joint venture between GM, Ford, Chrysler and Bell & Howell.  OEC, led by Chuck Rotuno, its president and chief executive officer, is headquartered south of Cleveland in Richfield, OH (www.oeconnection.com).

“Providence has a thorough understanding of OEC’s business model and market opportunities as well as a proven track record of successful partnerships and investments in similar companies,” said Mr. Rotuno. “We look forward to leveraging their resources and expertise to expand our global client base, and make it easier for our customers everywhere to grow their parts and service business.”

“OEC is a unique, high growth technology solutions company led by an outstanding management team and backed by two world-class automotive companies,” said Davis Noell, a managing director at Providence. “We are excited to partner with management, Ford and GM to help accelerate OEC’s growth strategy, both organically and through acquisition, and add lasting value to the company.”

Providence invests in the media, entertainment, communications and information industries and has approximately $40 billion of capital under management. The firm was founded in 1989 and is based in Providence, RI with additional offices in New York, London, New Delhi, Hong Kong, and Singapore (www.provequity.com).

William Blair (www.williamblair.com) was the financial advisor to OEC and Jones Day (www.jonesday.com) provided legal counsel. Debevoise & Plimpton (www.debevoise.com) provided legal counsel to Providence.

© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 6-3-16

Mason Wells Buys MGS Mfg. Group

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Mason Wells has acquired MGS Mfg. Group, and injection molder and a provider of mold-making engineering services. MGS has annual revenues of approximately $200 million and serves the healthcare, electronics, automotive, consumer and industrial end markets.

MGS’ capabilities include engineering and design; mold making; injection molding; assembly; contract manufacturing; and turnkey manufacturing systems. MGS has both Class 7 and Class 8 ISO certified clean rooms that are used in the making of its products sold to the medical device and pharmaceutical markets. The company was founded by Mark G. Sellers in 1982 and has four operating facilities in the US and one each in Mexico and Ireland. MGS is headquartered northwest of Milwaukee in Germantown, WI (www.mgstech.com).

“This acquisition will provide long-term growth opportunities for our company” said Jeff Kolbow, chief executive officer of MGS. “In Mason Wells, we have a strong partner to invest in and grow the business.  We are excited with the opportunity to extend our reach, both in terms of capabilities and geography to better serve our global customer base.”

Mason Wells makes investments in Midwest-based companies with revenues of $25 million to $300 million and EBITDAs of $5 million to $30 million. Sectors of interest include consumer packaged goods; packaging materials and converting; outsourced business services; and engineered products and services.  In February 2016, Mason Wells held a final closing of Mason Wells Buyout Fund IV and its related Executive Buyout Fund IV with total commitments of $615 million.  Mason Wells was founded in 1982 and is based in Milwaukee (www.masonwells.com).

Greg Myers, senior managing director, led the transaction for Mason Wells.

© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 6-3-16

KRG Acquires SleeveCo

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Fort Dearborn Company, a portfolio company of KRG Capital Partners, has acquired SleeveCo, a family-owned manufacturer of shrink sleeve and stretch sleeve labels. Fort Dearborn was acquired by KRG through the firm’s fifth fund in August 2010.

SleeveCo manufactures its shrink, stretch, and super-stretch sleeve labels using flexographic (flat rubber or soft plastic plates) and rotogravure (cylindrical metal) presses. The company has the capability to print on a variety of substrates using a range of inks including metallics, pearlescents, and thermochromatics. Customers include both Fortune 100 consumer products companies and smaller businesses.  SleeveCo was founded in 1987 and has approximately 125 employees. The company has one label production plant at its headquarters in Dawsonville, GA (www.sleeveco.com).

Fort Dearborn is a supplier of labels for the beverage, food, household products, paint and coatings, personal care, private label/retail and spirits markets. The company provides cut & stack, pressure sensitive, roll-fed and shrink-sleeve labels across multiple print technologies including digital, flexographic, offset lithographic and rotogravure. Fort Dearborn is headquartered in the Chicago suburb of Elk Grove and has approximately 1,550 employees (www.fortdearborn.com).

The buy of SleeveCo, the fourth add-on acquisition for Fort Dearborn under KRG’s ownership, builds the company’s position in shrink sleeves and expands its product line to include stretch sleeve capabilities. The company, with the addition of SleeveCo’s facility in Dawsonville, will now have fifteen production locations across North America.

KRG Capital specializes in acquiring and recapitalizing unique and profitable middle-market companies that have from $10 million to $100 million or more of EBITDA.  Founded in 1996, KRG has $4.5 billion of capital under management and is based in Denver (www.krgcapital.com).

© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 6-3-16

Lynx Buys North American Shoe

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Succession Capital, the US acquisition arm of Toronto-based Lynx Equity, has acquired North American Shoe, a wholesale distributor of men’s, women’s and children’s footwear.

North American Shoe (NAS) distributes its products to shoe stores, catalogers, sporting goods stores, and Internet sites. The company is the sole distributor in the US for Foamtread slippers, Tundra boots, and Beeko children shoes. NAS was founded in 1918 and is headquartered in East Providence, RI (www.northamericanshoeco.com).

According to Succession Capital, NAS has a track record of financial stability with upwards-trending revenue and consistent margins.  “With nearly 100 years in existence, this company has demonstrated its permanence in the marketplace. These results have been a product of strong fundamentals and the ability to be dynamic in an ever-changing industry,” said Lynx President Brad Nathan. “We are thrilled to have acquired our second company in the footwear space and look forward to capitalizing on synergies where they exist.” North American Shoe joins Lynx Equity’s portfolio of 42 companies including Toronto-based Baker Shoe Company, an importer and distributor of shoes and accessories (www.bakershoe.ca).

Lynx Equity acquires small to medium-sized businesses from owners looking to retire.  The firm invests from $1.5 million to $8 million of equity in companies with revenue of $2 million to $25 million and EBITDA between $750,000 and $2.5 million. US-based acquisitions are made through Succession Capital which is based near San Diego in La Jolla, CA (www.succession-capital.com).  Lynx Equity is headquartered in Toronto (www.lynxequity.com).

© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 6-3-16

BMO to Buy Greene Holcomb Fisher

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Minneapolis-based investment bank Greene Holcomb Fisher (GHF) has entered into an agreement to be acquired by publicly-traded BMO Financial Group. BMO’s offer was unsolicited and GHF struck the deal based on an attractive cash offer. The transaction is expected to close in BMO’s fiscal fourth quarter which ends in October.

Greene Holcomb Fisher is active in middle market mergers and acquisitions, private placements and financial advisory services.  Areas of specialization include consumer; food and agribusiness; healthcare; industrial products and services; business and education services; technology; and energy and infrastructure. GHF has 21 senior investment banking professionals – 14 of which are managing directors – and has completed more than 100 transactions over the past 5 years. The firm was founded in 1995 by managing directors Hunt Greene and Brian Holcomb and has offices in Minneapolis (headquarters), Phoenix, Seattle and Atlanta (www.ghf.net).

At closing of the transaction, GHF will be rebranded as BMO Capital Markets and the existing team will report to Lyle Wilpon, who leads BMO’s capital markets efforts in the US. “GHF’s strong capabilities in serving the financial sponsor community, as well as privately held and family-owned companies, will allow us to broaden coverage of our US capital markets and commercial bank clients,” said Mr. Wilpon.

BMO Capital Markets is the investment banking subsidiary of the Bank of Montreal. The group provides corporate, institutional and government customers with a range of investment and corporate banking products and services including include equity and debt underwriting; corporate lending and project financing; merger and acquisitions advisory services; securitization; treasury and market risk management; debt and equity research; and institutional sales and trading. The group has more than 2,200 employees operating in 28 locations, including 15 in North America (www.bmocm.com).

The investment banking activities of Bank of Montreal began in 1987 when it acquired Montreal-based Nesbitt Thomson. Additional investment bank acquisitions included Burns Fry (1994) and Gerard Klauer Mattison (2003). Bank of Montreal rebranded the group’s activities in 2006 as BMO Capital Markets when it merged its Canadian, US and international wholesale banking capabilities.

“We are excited to join BMO Capital Markets,” said Mr. Greene. “As a leading North American financial services provider with strong brand recognition, broad capital markets expertise and lending capabilities, BMO Financial Group will provide our team with the tools to accelerate the growth of our advisory business.”

© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 6-3-16