Archives for July 7, 2016

Edison Partners Closes Biggest Fund Ever

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Edison Partners has held a final closing of its latest growth equity fund, Edison Partners VIII, LP. At $275 million in committed capital, Edison VIII is the largest in the firm’s 30-year history and exceeded its $250 million target.

Investors in Edison VIII include corporate and public pension plans, endowments, fund-of-funds, insurance companies and family offices. Limited partners include New Mexico Educational Retirement Board, Hirtle Callaghan, ORIX Ventures, and The Honeywell Pension.

“The Edison team effectively navigated the firm’s leadership transition from founder to partnership while remaining laser focused on an investment strategy that is both proven and differentiated,” said Steve Neel, Deputy Chief Investment Officer at New Mexico Educational Retirement Board. “NMERB is pleased to be a part of this next chapter.”

“We are appreciative of the confidence our investors have shown in our team and differentiated growth equity strategy,” said Chris Sugden, Managing Partner. “This is a true testament to our team’s ability to identify growth markets, assist entrepreneurs in accelerating expansion, and deliver strong returns.”

Edison Partners invests from $8 million to $20 million of growth capital in middle market companies with revenues from $5 million to $20 million that are based in the eastern United States. Edison will consider buyouts, recapitalizations, spinouts and secondary stock purchases. Sectors of interest include financial technology, healthcare IT, enterprise IT, and marketing software.

Edison VIII has already closed on eight investments: All Traffic Solutions – automates data usage and analysis for roadway information systems (www.alltrafficsolutions.com); Clearpool Group – electronic trading software for institutional sell-side and professional trading firms (www.clearpoolgroup.com); iQ Media – data and analysis tools for marketing and public relations professionals (www.iqmediacorp.com); Jornaya – data and analysis tools used to examine consumer buying behavior (www.jornaya.com); Terminus – a software platform used by business-to-business marketers (www.terminus.com); TripleLift – a native advertising software platform (www.triplelift.com); Solovis – a multi-asset class portfolio analysis and reporting software platform (www.solovis.com); and VirtualHealth – a population health management software platform (www.virtualhealth.com).

Since its inception in 1986, Edison Partners has invested in more than 200 companies and completed 154 exits. The firm’s active portfolio currently consists of 43 companies. Edison Partners is based in Princeton, NJ with additional offices in McLean, VA, and Cleveland, OH (www.edisonpartners.com).

© 2016 Private Equity Professional • 7-7-16

Altus Names Heidi Goldstein as Partner

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Altus Capital Partners has promoted Heidi Goldstein to partner. Ms. Goldstein has been a member of the Altus Capital investment team since March 2006, most recently as a principal, and has been involved in many of the firm’s investments during this period.

Before joining Altus, Ms. Goldstein was active in the underwriting and portfolio management of leveraged transactions at GE Antares Capital. Earlier, she worked at Dilmun Investments, the US-based investment advisor of Bahrain International Bank, where she held positions in the private equity and the high yield investment group. Ms. Goldstein has a BS in Finance from the University of Connecticut.

Ms. Goldstein currently serves on the boards of International Imaging Materials, Rocla Concrete Tie, and Nichols Portland.

“Heidi’s promotion to partner is in recognition of her many contributions in successfully sourcing and managing investments in the Altus Capital portfolio,” said Russell Greenberg, Managing Partner.

“With its focus on middle market manufacturing companies – a sweet spot in private equity investing – Altus Capital is well positioned for growth,” said Ms. Goldstein. “I look forward to many more years of working with the Altus team in implementing our focused strategy.”

Altus Capital Partners invests in corporate divestitures, management-led buyouts, and privately-held or family-owned businesses with manufacturing operations based primarily in the Midwest and Eastern regions of the United States. Target companies will have at least $5 million of EBITDA and an enterprise value from $30 million to $100 million. The firm is headquartered in Wilton, CT with an additional office near Chicago in Lincolnshire, IL (www.altuscapitalpartners.com).

© 2016 Private Equity Professional • 7-7-16

Svoboda Sells Cape Electrical Supply

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Svoboda Capital Partners has sold its portfolio company, Cape Electrical Supply, to Graybar.

Cape Electrical Supply is a regional distributor of electrical and communications products to electrical contractors and large engineering construction firms, as well as industrial, institutional and utility customers. Cape Electrical operates a network of 17 stocking locations in Missouri, Illinois, Kentucky, Tennessee, Texas and Arkansas. The company had revenue of approximately $126 million in 2015. Cape Electrical is led by Kyle Thoma, its president and CEO, and is headquartered in Cape Girardeau, MO (www.capeelectric.com).

Svoboda acquired Cape Electrical in November 2007 and completed six add-on acquisitions during the course of its ownership. As a subsidiary of Graybar, the company will continue to operate under the Cape Electrical Supply name with the same employees, senior management team and suppliers.

Graybar is a wholesale distributor of electrical, communications and data networking products. The company has annual revenues of approximately $6 billion and is employee owned – one of the largest employee-owned companies in North America. Graybar is headquartered west of St. Louis in Clayton, MO (www.graybar.com).

“We are excited to welcome the Cape Electric team to Graybar and look forward to achieving profitable growth together. This marks the second acquisition for Graybar in as many years, and we will continue to seek out similar opportunities to expand our reach and diversify our business in the future,” said Kathleen Mazzarella, Graybar’s Chairman, President and CEO.

Svoboda Capital Partners invests from $10 million to $20 million in business services, value-added distribution, and consumer products companies that have revenues from $10 million to $100 million and EBITDAs from $3 million to $15 million. The firm was founded in 1998 and has over $300 million of capital under management.  Svoboda Capital is based in Chicago (www.svoco.com).

BB&T Capital Markets (www.bbtcapitalmarkets.com) was the financial advisor to Cape Electric. BB&T is based in Winston-Salem, NC.

© 2016 Private Equity Professional • 7-7-16

Graycliff Acquires 901D

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Graycliff Partners has acquired a majority equity interest in 901D, a provider of engineering, design, assembly and integration services for ruggedized consoles and protective enclosure systems. The current owners of 901D, Serge Seguin and Aldric Seguin, will continue to own an equity interest in the company and will be members of the company’s Board of Directors.  The investment in 901D was made from Graycliff’s latest buyout fund, Graycliff Private Equity Partners III LP.

901D’s protective enclosure-based systems are made to customers’ exact specifications and are used with shipboard computing systems, command and control systems, vehicle communications systems and unmanned surveillance systems (“901D” is a military specification for high impact mechanical shock for equipment mounted on ships). Customers include defense, aerospace, security and industrial systems integrators that sell to the Department of Defense (Navy, Army, Air Force, Marines), and to companies operating in the maritime, homeland security, industrial, and oil & gas sectors.  901D has 120 active customers, with its top 10 clients averaging a relationship with the company for over 10 years. 901D is led by its CEO Frank Duvergne and is headquartered north of New York City in Tallman, NY (www.901d.com).

“We are excited to work with 901D’s outstanding management team and continue to build out the company’s product portfolio as the maritime electronics industry is poised for new opportunities,” said Stephen Hindmarch, a managing director at Graycliff. “We look forward to a very strong partnership as we help 901D expand into new end industries and reach as many customers as possible.”

Graycliff invests from $5 million to $25 million of equity and mezzanine capital in companies with revenues of at least $10 million and EBITDA margins of 10% or higher. Sectors of interest include manufacturing, services and distribution.  Both control and minority investments are considered. The firm was formed in December 2011 by the former investment team of HSBC Capital.  Graycliff is headquartered in New York with an additional office in São Paulo (www.graycliffpartners.com).

In 2014, the New York State Common Retirement Fund allocated $50 million to Graycliff Private Equity Partners III – the firm’s latest buyout fund. “We are pleased that the New York State Common Retirement Fund can play a role in helping New York businesses like 901D grow,” said New York State Comptroller Thomas DiNapoli. “Our In-State Investment Program is always on the lookout for opportunities close to home that offer solid returns.”

© 2016 Private Equity Professional • 7-7-16

Summit Park’s Modular Building Platform Gets Bigger

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Parkline, a portfolio company of Summit Park, has acquired the modular metal buildings business of Bebco Industries. The assets of the Bebco Environmental Control Corporation are not part of this purchase and continue to operate as a stand-alone business under the Bebco name.

This purchase includes all of the Bebco industrial housing and access solutions product lines. These product lines consist of pre-engineered industrial modular buildings fabricated from 12-18 gauge galvanized steel, stainless steel, aluminum or fiberglass construction and structural steel flooring systems. Also included are the blast resistant building products, sheds, canopies, industrial duty stairs, ramps and platforms. The modular metal buildings business is located near Houston in Hitchcock, TX (www.okbebco.com).

“We are very pleased to acquire the metal building assets from Bebco. Our investment thesis has always been to expand geographically and expand Parkline’s capabilities. This acquisition accomplishes both, and we look forward to combining forces and building on each company’s historical success,” said Bob Calton, a managing partner at Summit Park.

Parkline is a manufacturer of metal buildings for industrial and commercial applications. Formed as an independent company in 1973, Parkline focuses on the production and erection of smaller buildings (widths of less than 32 feet) and has more than 70,000 structures in service throughout the United States and Canada. Summit Park acquired Parkline in May 2012 from an ESOP which controlled the company. Parkline’s senior management team at that time significantly re-invested in the company. Parkline is headquartered in Eleanor, WV (www.parkline.com).

“The addition of the Bebco’s product lines to Parkline’s product offering of 18-24 gauge metal buildings, which may be site erected or modular constructed, arguably creates one of the industry’s most diverse and flexible product portfolios,” said Bill Estep, President & CEO of Parkline. “With two significant fabrication, assembly and systems integration facilities, one of which is strategically located with port access, this acquisition enhances our ability to provide exceptional value to more customer applications across a greatly expanded geography.”

Summit Park makes investments in lower middle market companies in a range of industries that have revenues between $20 and $100 million or EBITDAs between $4 and $10 million. Sectors of interest include business services, outsourced services, light manufacturing, and distribution.  Summit Park is headquartered in Charlotte, NC (www.summitparkllc.com).

Senior financing for the transaction was provided by the sponsor finance group of Byline Bank.  This group provides senior secured, cash flow loans to private equity sponsors to back acquisitions, provide growth capital and enable refinancings. Staffing the group from Chicago are Jim Kuncl, Dan Delgadillo and Joe Horwath (www.bylinebank.com).

© 2016 Private Equity Professional • 7-7-16