Archives for June 22, 2016

New Banker at Raymond James

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Raymond James has added John Barrymore to its consumer investment banking practice as a managing director. Mr. Barrymore will focus on the firm’s efforts in the food, nutrition and consumer health sectors, areas in which he has worked exclusively during his 22-year career.

“John is a highly regarded professional with an exceptional understanding of his focus sectors and a tremendous record of successful transactions,” said Mark Goodman, Managing Director and head of the consumer investment banking practice. “He’s adept at delivering results to clients, and I’m thrilled to welcome him to our team.”

Prior to joining Raymond James, Mr. Barrymore was with Duff & Phelps where he spent the past five years leading the firm’s food and nutrition M&A practice. Earlier in his career, he founded 6Pacific Group, a merchant-banking firm focused on advising and investing in food, nutrition and consumer health companies. His transaction experience includes representing family-held businesses, private equity firms and corporations on buy-side, sell-side and capital raising transactions. Mr. Barrymore has experience in cross-border transactions and maintains active relationships with clients around the world, particularly in Europe, China, Japan and Australia. Prior to founding 6Pacific Group, he held various positions at BMO Capital Markets, Piper Jaffray, and DLJ/CSFB. Mr. Barrymore is a graduate of Southern Methodist University with a bachelor’s degree in Economics and International Studies.

“I am very excited to be joining the highly successful Raymond James consumer investment banking team,” said Mr. Barrymore. “Raymond James has built a powerful global investment banking platform with a broad base of services, resources and industry expertise that I am looking forward to leveraging on behalf of our clients.”

“During his over two-decade career, John has closed nearly 140 transactions and in just the past four years, he was responsible for over 20 transactions that significantly impacted his industry sectors,” said Jim Bunn, co-president Global Equities and Investment Banking at Raymond James. “His addition to our team cements our reputation as a truly global investment bank in the consumer space.”

Other managing directors in the firm’s consumer investment banking practice include Mark Goodman (US Consumer Group Head), Jay Eastman (US Consumer Products/Retail), Brian Boyle (US Food & Beverage), Robert Arnold (US Restaurants), Monika Nickl and Dirk Damegger (European Consumer Banking), and Glenn Gatcliffe (Canadian Consumer Banking).

Raymond James (NYSE: RJF) is a financial services company providing private client group, capital markets, asset management, banking and other services to individuals, corporations and municipalities. Since 2015, Raymond James has participated in raising $140 billion in capital for its corporate clients and completed more than 450 advisory assignments, including more than 390 M&A buy-side or sell-side advisory assignments. The firm was founded in 1962 and is headquartered in St. Petersburg, FL (www.raymondjames.com).

© 2018 Private Equity Professional | November 27, 2018

Constitution Capital Adds Analyst

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Dominic Morell has joined Constitution Capital Partners – an investor in lower middle companies – as a new analyst. He will be responsible for screening, evaluating, negotiating and monitoring investments.

This is the second-time around for Mr. Morell who was a summer analyst with the firm in 2015. He is a recent graduate of the State University of New York where he earned a Bachelor’s degree in chemistry with a minor in mathematics and a concentration in finance.

“We are excited to welcome Dominic back to Constitution Capital,” said Daniel Cahill, Managing Partner. “He has already proven a valuable asset to our team in his previous role with the firm, and we’re confident his intimate knowledge of the Constitution Capital investment approach will allow him to have an immediate impact as an analyst.”

Constitution Capital makes fund investments and direct investments in North America-based small to mid-cap opportunities.  The firm’s limited partners are largely institutional investors, family offices and high net worth investors from the US, UK, Europe, South America and Asia. In June 2015, Constitution Capital Partners held a final close of its latest fund, Ironsides III Private Equity Partnership/Co-Investment Fund, LP, with $823 million in capital commitments. The firm is headquartered in Boston (www.concp.com).

“Building on the cohesive team we’ve established is crucial to the success of the firm, allowing us to stay ahead of the curve in sourcing investment opportunities,” said John Guinee, Managing Partner. “In our nearly 10 years of operation, we have strategically grown our team to best serve our investors, and we are pleased to continue this commitment with the addition of Dominic.”

© 2016 Private Equity Professional • 6-22-16

Sterling Builds Industrial Cleaning Platform

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The Sterling Group has acquired two industrial cleaning and maintenance companies with the simultaneous buys of North American Industrial Services and Evergreen Industrial Services. Together, these companies will have approximately $200 million in annual revenue and a service area that spreads throughout North America.

North American Industrial Services (NAIS) provides high pressure and high volume water-blasting; vacuum truck services; grit blasting; surface preparation; explosives services; tank and vessel cleaning; boiler cleaning; pipe cleaning and restoration; hydro-demolition; and hydro-excavation. NAIS has 23 locations and services companies in the Northeast, Midwest, and Rocky Mountain regions. The company was founded in 1983 as H2O Technologies and today is headquartered north of Albany in Ballston Spa, NY (www.naisinc.com).

Evergreen Industrial Services provides many of the same services as NAIs including vapor control and degassing; tank cleaning; high pressure water-blasting; vacuum truck services; hydro-excavation; grit blasting; and waste processing and minimization. Evergreen primarily serves the petrochemical, refining, and midstream energy end markets. The company has nine locations in Texas, Louisiana and California and is headquartered near Houston in LaPorte, TX (www.evergreenes.com).

Mark Neas, the former president of Brand Energy Solutions, a provider of services to the energy, industrial and infrastructure markets, has been named by Sterling as the CEO of the new platform. Brand Energy Solutions was acquired by Clayton, Dubilier & Rice in September 2013 from First Reserve. Phil Hawk, the former CEO and current Executive Chairman of TEAM (NYSE: TISI) – a provider of specialty industrial services (inspection, evaluation and repair) – has been named Executive Chairman of the new platform.

NAIS founders, Frank and Tim Zilka, and Evergreen founder Jon Hodges will continue to run their businesses and have reinvested in the new platform under Sterling ownership. Both NAIS and Evergreen will continue to operate under their current trade names. The name of Sterling’s new platform has not yet been announced.

“Frank and Tim Zilka and Jon Hodges have built exceptional businesses that will be even stronger as one organization,” said Kevin Garland, a Partner at The Sterling Group. “Together, with the addition of several tenured industry executives, we will execute on our collective vision to continue to grow organically and into new markets, offering an expanded ability to serve the new company’s diverse customer base across the United States.”

The Sterling Group targets controlling interests in manufacturing, industrial services and distribution companies that have enterprise values from $100 million to $500 million.  The firm emphasizes an operational approach in partnership with management teams to grow and improve the companies it acquires.  Sterling was founded in 1982 and is headquartered in Houston (www.sterling-group.com).

© 2016 Private Equity Professional • 6-22-16

Audax Sells Neptune-Benson to AEA

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Audax has sold Neptune-Benson to Evoqua Water Technologies, a portfolio company of AEA Investors. Audax acquired Neptune-Benson in August 2011.

Neptune-Benson is a designer and manufacturer of filtration systems, recirculation components, and filter accessories. The company’s products are sold to commercial and municipal water recreation facilities, resorts, water parks, zoos and aquariums. Neptune was founded in 1956 by Junius and Raymond Gertz and is headquartered southwest of Providence in Coventry, RI (www.neptunebenson.com).

Since Audax’ initial investment in 2011, Neptune completed five add-on acquisitions to add to its product offering and expand the company internationally. “Audax has been instrumental in supporting our organic growth and acquisition strategy,” said Ken Rodi, CEO of Neptune.

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).

“Ken and the rest of the Neptune-Benson team have done an exceptional job growing the company organically and through acquisitions to create a clear leader in the filtration space across commercial, industrial, and municipal aquatics industries. We wish Neptune continued success in their next leg of growth with its new partner,” said Geoffrey Rehnert, Co-CEO of Audax.

In January 2014, AEA closed on the acquisition of the water and wastewater treatment operations and assets of Siemens Water Technologies for $870 million. Upon closing of the transaction the company was renamed Evoqua Water Technologies.  Today, Evoqua is a provider of water and wastewater treatment products, systems and services for industrial and municipal customers. The company was founded as US Filter in 1990 and was acquired by Siemens in 2004. Evoqua is headquartered north of Pittsburgh in Warrendale, PA (www.evoqua.com).

Financing for the transaction was provided by Credit Suisse (www.credit-suisse.com/us), Morgan Stanley (www.morganstanley.com), and RBC Capital Markets (www.rbccm.com).

Lazard Middle Market (www.lazardmm.com) was the financial advisor to Neptune and Audax. Goulston & Storrs (www.goulstonstorrs.com) provided legal counsel to Neptune and Audax. Fried, Frank, Harris, Shriver & Jacobson (www.friedfrank.com) was the legal advisor to Evoqua and AEA.

© 2016 Private Equity Professional • 6-22-16

Gauge Lets Hair Down, Invests in Beauty Industry Group

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Gauge Capital has made an investment in Beauty Industry Group, a supplier of hair extensions and related beauty products.

Beauty Industry Group (BIG) sells its products directly to consumers and through a network of over 40 independent distributors in the US and Canada.  Brand names include Babe, Donna Bella Hair, Twisted Fringe, Elixir Cosmetics, and Beauty Depot. The company, led by CEO Derrick Porter, was founded in 2004 and is headquartered in Salt Lake City (www.beautyindustrygroup.com).

“Over the years, I met with several potential investors, eventually selecting Gauge Capital,” said Mr. Porter. “Throughout our conversations it became clear to me that they were the best partner to help us achieve our future growth objectives.  I’ve never felt better about the direction of our business and with the investment of Gauge and their team I feel we have created the perfect synergy to help take BIG to the next level.”

“Beauty Industry Group is the market leader in a fast-growing product category with exceptionally loyal customers,” said Managing Partner Drew Johnson. “We believe the market has significant untapped potential and customer adoption rates will continue to grow.”

Gauge Capital invests from $10 million to $40 million in North American based companies that have $5 million to $50 million of EBITDA. Sectors of interest include business and consumer services, healthcare services and food services. The firm will consider both majority and minority investments. Gauge Capital was co-founded in 2013 by Managing Partners Drew Johnson and Tom McKelvey and is based near Dallas in Southlake, TX (www.gaugecapital.com).

© 2016 Private Equity Professional • 6-22-16

Friedman and Seal Rock Acquire KeySource

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Friedman Capital and Seal Rock Partners have acquired KeySource Medical, a wholesale distributor of generic pharmaceuticals.

Albert Paonessa, the former president of generic drug distributor Anda, and Stephanie Ring, the former co-founder and CEO of KeySource, participated in the transaction alongside Friedman Capital and Seal Rock. Ms. Ring will continue as a major shareholder and board member of the company. KeySource Medical was founded in 1996 and is headquartered in Cincinnati. The company is led by CEO Todd Szewc (www.keysourcemedical.com).

Friedman Capital makes control and growth capital investments in companies with EBITDA of $10 million to $50 million that are in the distribution and healthcare services industries.  Capital for its investment activities comes from the Friedman family.  The firm is led by its managing partner Randolph Friedman. Friedman Capital was founded in 2011 and is headquartered in Washington, DC (www.friedmancap.com).

In 1988, Mr. Friedman and Jay Levine, an executive partner of Friedman Capital, co-founded The Harvard Drug Group which they grew from $3 million to $500 million in annual sales. In December 2006, H.I.G. Capital acquired a majority equity interest in Harvard Drug with Mr. Friedman continuing as Chairman and CEO. In April 2010, Court Square Capital Partners acquired the company from H.I.G. At the time of the sale, Harvard Drug was the largest independently owned generic drug distributor in the US. Just a few years later, the company was purchased by Cardinal Health for $1.25 billion.

According to Friedman Capital, the buy of KeySource comes at a time when the generic drug distribution business is being consolidated resulting in reduced service levels to independent pharmacies. These pharmacies still represent nearly an $89 billion health care marketplace and dispense nearly 40 percent of all retail prescriptions.

“KeySource offers an ideal platform to re-establish the hallmarks of the industry,” said Mr. Friedman. “For manufacturers, these hallmarks include market access and price stability. Independent pharmacies and regional chains need an understanding partner willing to meet pricing, product and service demands. Our door is wide open for further acquisitions of like-minded distributors as both manufacturers and independent pharmacies seek alternatives to the current oligopoly that has little interest in their welfare.”

Seal Rock Partners was founded in 2015 by Jonathan Cohen and Bill Fradin. Capital for its investment activities, the firm invests from $10 million to $30 million of equity in lower middle market businesses, comes from the Cohen family.  The investment in KeySource Medical is the firm’s first. Seal Rock Partners is based in New York (www.sealrockpartners.com).

© 2016 Private Equity Professional • 6-22-16