Archives for July 8, 2016

H.I.G. Bayside Closes Fund IV

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H.I.G. Bayside Capital, the distressed debt and special situation affiliate of H.I.G. Capital, has closed H.I.G. Bayside Loan Opportunity Fund IV with capital commitments of $1.1 billion, exceeding its $1.0 billion target.

“We are grateful for the support from our investors for this offering. The strong response to the fund reflects their confidence in the capability of our team and our differentiated strategy, as we continue to build upon H.I.G.’s long-standing special situation track record,” said Sami Mnaymneh, Co-CEO of H.I.G.

Fund IV will invest in non-control loan obligations of stressed and distressed companies in the US, including the ability to provide liquidity to troubled companies and to acquire the debt obligations of such companies.  This is the same investment strategy used by H.I.G. over the last twelve years in investing in special situation credit opportunities in the US and Europe

“The next several years will present a compelling opportunity to invest in US special situation credit opportunities, driven by an inefficient secondary market for small-cap stressed/distressed loans and improving conditions for special situation investing,” said John Bolduc, Executive Managing Director and head of H.I.G. Bayside Capital.  “Given H.I.G.’s special situation expertise and deal flow network, the new fund is ideally positioned to capitalize on these opportunities.”

H.I.G. Bayside Capital invests in middle-market companies across a variety of industries, including business services, manufacturing, healthcare, retail, food/agriculture, and specialty finance. Typical investment size ranges from $10 million to $100 million. The firm has fifteen offices throughout the US and Europe and is based in Miami (www.bayside.com).

© 2016 Private Equity Professional • 7-8-16

Jack Nadal New Principal at Liberty Hall

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Liberty Hall Capital Partners, an investor in the aerospace and defense industry, has hired Jack Nadal as a new principal.

Before coming to Liberty Hall, Mr. Nadal was a senior vice president at Insight Equity, a middle market private equity firm, which he joined in 2013. At Insight Equity he was active in all of the firm’s investments in the aerospace industry including Norsk Titanium, a maker of aerospace-grade titanium structures based in Oslo, Norway; and Precision Holdings, a contract machining, fabrication, assembly, and 3D metal printing services company based in Windsor, CT.

Prior to Insight Equity, Mr. Nadal was an associate at Oak Hill Capital Partners as a member of the firm’s basic industries group. He began his career at Lazard as an analyst in its technology, media and telecom group. Mr. Nadal has a BA in Economics from the University of Virginia and MBA from Columbia.

During his time at Oak Hill Capital Partners, Mr. Nadal worked with Rowan Taylor, Liberty Hall’s founding partner, and Liberty Hall principal Taylor Catarozoli.

“Since we formed Liberty Hall almost five years ago, we have continuously invested in growing our team,” said Mr. Taylor. “To continue to execute on our investment strategy focused on the aerospace industry, we must have the right talent at our firm.  Jack is an ideal addition to Liberty Hall, and we are excited to be working with him again.”

Liberty Hall has been a very active investor of late. Just last month the firm acquired J&M Machine as an add-on acquisition for Accurus Aerospace, a Tier II aerostructures supplier. Accurus was formed as a platform company by Liberty Hall in November 2013. In March 2016, Liberty Hall acquired Bromford Industries, a supplier of engine components, fabrications and assemblies and landing gear components that are used in the aerospace and power generation industries. In February 2016, Liberty Hall acquired AIM Aerospace, a supplier of composite parts used in the commercial aerospace industry.

Liberty Hall was founded in July 2011 and is headquartered in New York (www.libertyhallcapital.com).

© 2016 Private Equity Professional • 7-8-16

Andrew Cantwell Named Partner at NEP

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Norwest Equity Partners (NEP) has promoted Andrew Cantwell to Partner. Mr. Cantwell joined the NEP team in 2006 and was promoted to principal in 2008, just two years after joining the firm. He has been active at NEP on both the buy-side and sell-side.

Prior to joining NEP, he worked at Northwestern Mutual Capital in the firm’s private equity and mezzanine group. His career experience also includes working as a vice president at ABN AMRO where he led and closed leveraged and project finance transactions.

“Andy has continued to make significant contributions to the success of our firm, and we are thrilled to have the opportunity to promote him to the partner level,” said Tim DeVries, NEP Managing General Partner.  “This promotion recognizes Andy’s leadership and contributions to our investment success over the years, and we know that he will continue to play a vital role at the firm.”

Mr. Cantwell is active in sourcing and leading investment opportunities, performing due diligence, structuring transactions, and arranging debt financing. He is also involved at the board level with several of NEP’s current portfolio companies, working with management teams on strategic planning and execution and other operational initiatives. Mr. Cantwell has a BBA from the University of Wisconsin and an MBA from Northwestern University.

Norwest Equity Partners makes equity investments of $30 million to $150 million in companies operating in the agriculture, applied technology, business services, consumer products and services, distribution, diversified industrials, and healthcare sectors. In April 2015, NEP closed Norwest Equity Partners X, LP, a $1.6 billion fund and Norwest Mezzanine Partners IV, LP, an $800 million fund formed by NEP’s affiliated mezzanine investment firm, Norwest Mezzanine Partners. Norwest Equity Partners is headquartered in Minneapolis (www.nep.com).

© 2016 Private Equity Professional • 7-8-16

Pfingsten Exits Des-Case

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Pfingsten Partners has sold Des-Case Corporation ,a provider of contamination control products used in the industrial lubricants industry, to Industrial Growth Partners. Pfingsten acquired Des-Case in October 2013.

Des-Case manufactures desiccant breathers (devices that strip the surrounding air of contaminants—both moisture and dirt—to keep lubricants running clean and dry), fluid handling products such as lubricant storage and filtration systems, and consulting/training services. The company primarily sells through distributors and to OEMs (including private-label programs) but also sells products direct to end user. Des-Case is led by CEO Brian Gleason and is headquartered near Nashville in Goodlettsville, TN (www.descase.com).

During Pfingsten’s ownership, Des-Case completed two add-on acquisitions which expanded the company’s product line and geographic reach. In June 2014 Des-Case acquired the oil sight glass product line of Houston-based ESCO (oil sight glasses are used for the early detection of contamination and oil level problems). In December 2015, Des-Case acquired JLM Systems, a Vancouver, BC-based maker of oil mist adapters and oil sampling products sold under the OilMiser brand name.

“We are a stronger and better run organization because of our partnership with Pfingsten,” said Mr. Gleason. “Pfingsten’s operational resources and culture of continuous improvement helped take our company to the next level.”

Pfingsten invests in middle market manufacturing, distribution and business services companies that have transaction values ranging from $15 million to $100 million and EBITDA between $3 million and $12 million. Since founding in 1989, Pfingsten has acquired 112 such companies through five funds with total commitments of $1.3 billion. The firm is based in Chicago with additional representative offices in India and China (www.pfingsten.com).

“Brian Gleason and the Des-Case management team have done an outstanding job executing their strategic objectives and creating a world-class business with a bright future,” said Scott Finegan, a managing director at Pfingsten.

Industrial Growth Partners, the buyer of Des-Case, provides equity capital to lower-middle market manufacturing and manufacturing services companies with revenues of $30 million to $100 million. The firm invests equity in a range of transactions involving a change of ownership, such as management buyouts, leveraged buyouts, corporate divestitures, recapitalizations and management buy-ins. The firm was founded in 1997 and is based in San Francisco (www.igpequity.com).

Minneapolis-based investment bank Craig-Hallum (www.craig-hallum.com) was the financial advisor to Des-Case and Paul Hastings (www.paulhastings.com) served as legal counsel.

© 2016 Private Equity Professional • 7-8-16

Gryphon Acquires CORA Health Services

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Gryphon Investors has acquired CORA Health Services, a provider of outpatient physical therapy services.  CORA’s management team will remain in place and retain a minority equity interest in the company.

CORA Health Services provides outpatient physical therapy and general rehabilitation, worker’s compensation therapy, sports and auto injury rehabilitation, and rehabilitation for seniors.  CORA operates more than 100 clinics in Florida, Michigan, and South Carolina and is headquartered in Lima, OH (www.corahealth.com).

The buy of CORA is Gryphon’s second foray into the physical therapy and rehabilitation sector. In April 2008, the firm simultaneously acquired Accelerated Rehabilitation Centers and OccuSport Physical Therapy. The combined company was sold in 2011 to OMERS Private Equity. “Following on our prior successful investment in this growing sector, we are excited to re-enter the category with an investment in CORA,” said Nick Orum, Gryphon’s President. “We look forward to partnering with CEO Dennis Smith and his team to further build the company into a premier regional physical therapy network.”

“Physical therapy is a $33 billion industry that remains highly fragmented and rife with opportunities for the right platform.  We believe CORA, with its scalable infrastructure, full service clinics, and highly diversified payor mix, is poised to expand further through both de novo growth and accretive add-on acquisitions,” said Luke Schroeder, a principal in Gryphon’s Healthcare Group.

Gryphon Investors makes leveraged acquisitions and growth investments in middle-market companies. The firm invests from $35 million to $100 million of capital in companies with sales ranging from $50 million to $500 million. Sectors of interest include business services, consumer and retail, automotive, chemical, general manufacturing, health care and hotels. Gryphon is based in San Francisco (www.gryphoninvestors.com).

New York-based Cain Brothers (www.cainbrothers.com) was the financial advisor to Gryphon, and Raymond James (www.raymondjames.com) advised CORA.  Kirkland & Ellis (www.kirkland.com) acted as the legal advisor to Gryphon, and Shumaker, Loop & Kendrick (www.slk-law.com) was the legal advisor to CORA.

© 2016 Private Equity Professional • 7-8-16

Weinberg Adds Medex to Convenience Valet

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Mechanical Servants (DBA Convenience Valet), a portfolio company of Weinberg Capital Group, has acquired Medex Merchandising. This is the first add-on acquisition for Convenience Valet since being acquired by Weinberg Capital in March 2015.

Medex Merchandising is a value-added distributor of repackaged branded health and beauty care products, including brand name over-the-counter medications (examples include Aleve, Tylenol, Advil, Motrin and Alka-Seltzer in single use packs), generic medications, condoms, and other sundries (travel sized mouthwash, toothpaste and deodorants). The company’s products are sold through the food, drug, mass merchandise and convenience channels. Medex was founded in July 1997 and is headquartered in the Chicago suburb of Melrose Park (www.medexco.com).

Convenience Valet is a value-added nationwide distributor of blister pack branded convenience and travel-sized health and beauty care products, over-the-counter drugs, personal care products and other sundries sold in small-portion packages.  The company acquires branded products from manufacturers and then repackages the products in convenient sizes (for instance, single or double dose) and trial and travel-size packages.  Products are sold at more than 120,000 retail locations and include grocery stores, convenience stores, drug stores, gas stations, mass merchants, warehouse clubs, travel centers, airports, hotels and cruise lines.  The company was founded in 1946 and just like Medex, is headquartered in Melrose Park (www.cvalet.com).

“We are very pleased to have consummated our first add-on acquisition for Convenience Valet,” said Ronald (Chip) Weinberg, Jr., a managing director and principal at Weinberg Capital. “Medex is the first in what we believe will be multiple additions to our platform.”

Weinberg Capital specializes in acquiring middle-market companies that are based in North America and have annual revenues from $15 million to $100 million and EBITDAs ranging from $2 million to $10 million.  Sectors of interest include manufacturing, business services, medical and healthcare, aviation services, consumer products, and value-added distribution. The firm is based in Cleveland (www.weinbergcap.com).

Weinberg Capital is actively seeking additional add-on acquisitions for Convenience Valet.

© 2016 Private Equity Professional • 7-8-16