Archives for August 16, 2016

Five Crowns Buys Verrex

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Five Crowns Capital has acquired Verrex Corporation, a provider of audio visual integration services. Thomas Berry, Jr., the third generation of the Berry family to lead the company, will remain as a shareholder and CEO of the company.

Verrex’ services include design and build, installation, integration, maintenance, and onsite staffing. Verrex was founded in 1947 and is headquartered west of Newark in Mountainside, NJ. Additional offices are located in Boston, Houston and Shanghai (www.verrex.com).

“Verrex is the ideal combination of a multigenerational business that has built a strong culture combined with an unusually talented management team,” said Jeffrey Schaffer, founder and managing partner of Five Crowns Capital.  “The company has a long history of providing exceptional services to some of the most demanding multi-national corporations in the world.  Its culture and expertise position the company well for significant future growth, both organically and through strategic acquisitions.”

“Partnering with Five Crowns culminates two years of careful succession planning,” said Mr. Berry. “As I continue to build on my family’s legacy, I am grateful to the prior generation for their leadership and devotion.  I am excited to guide Verrex into the next stage of its growth, and to give these fearless entrepreneurs the retirement they rightly deserve.”

The buy of Verrex by Five Crowns follows the April 2016 acquisition of AVI-SPL, also a provider of audio visual integration services, by H.I.G. Capital. AVI-SPL was formed in 2008 by Silver Lake Partners through the merger of Audio Visual Innovations (AVI) and Signal Perfection Ltd. (SPL).  Today, AVI-SPL has 1,500 employees and 29 offices in the US and 6 internationally through Canada, the UK and the United Arab Emirates. The company is headquartered in Tampa (www.avispl.com).

Five Crowns invests in small and middle market companies that have annual revenues of $20 million to $200 million and EBITDA of $4 million to $40 million.  The firm is industry agnostic but has specific interests in media and entertainment; cosmetics; building materials; technology and electronics; energy; manufacturing; distribution; healthcare; and life sciences. Five Crowns was founded in January 2003 and is headquartered in Newport Beach (www.fivecrownscapital.com).

Debt and equity investors in the transaction include Diamond State Ventures, Aavin Private Equity, MidStates Capital, and Enterprise Bank.

© 2016 Private Equity Professional • 8-16-16

Blackford Buys Davalor Mold

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Blackford Capital has acquired Davalor Mold, a manufacturer of injection molded plastic products. The buy of Davalor Mold is the eighth by Blackford’s Michigan Prosperity Fund, which closed in 2012 and invests exclusively in Michigan-based companies.

Davalor’s products are sold to the automotive sector and include safety equipment, such as seatbelt retractor components, buckle covers, webbing guides, and air bag systems. The company has 78 injection molding machines ranging from 33 ton to 400 ton. Davalor has approximately 200 employees and operates out of two manufacturing sites; a 100,000-square-foot corporate office and production facility and a 53,000-square-foot tooling and engineering facility – both are located north of Detroit in Chesterfield, MI. The company was founded by brothers Dave, Orm, and Al Bernhardt in 1979 (www.davalor.com).

“Davalor’s strategic location in the metropolitan Detroit area allows the company to provide its customers with technical input early in the product development process, while also offering cost-effective support to its Tier 1 customers,” said Martin Stein, founder and managing director of Blackford Capital. “The company has established a strong presence in the automotive manufacturing industry throughout the United States, and we see opportunities for continued growth in this region, along with significant customer expansion into Mexico.”

Blackford Capital invests in middle-market manufacturing, distribution, and service companies in both mature and growing industries. Target companies will have revenues of $20 million to $100 million and EBITDAs of $2 million to $20 million.  Blackford has offices in Grand Rapids, MI (headquarters) and Santa Monica, CA (www.blackfordcapital.com).

Other Michigan Prosperity Fund investments include Fenton-based Burgaflex; Grand Rapids-based Custom Profile; Oak Park-based Mopec; Grand Haven-based Grand Transformers; Grand Rapids-based Dickinson Press; Hudsonville-based Grand Equipment Company; and Hastings-based Quality Aluminum Products.

Troy MI-based Talmer Bank (www.talmerbank.com) provided debt financing for the transaction.

© 2016 Private Equity Professional • 8-16-16

Sorenson and Yukon Acquire Axiom Materials

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Axiom Materials, a maker of composite materials, has been acquired by Sorenson Capital. Yukon Partners co-invested in this transaction with Sorenson Capital.

Axiom Materials is a composite materials manufacturer with a specialization in “prepreg” materials – (prepreg is a term for “pre-impregnated” composite fibers where a matrix material, such as epoxy, is already present). Axiom sells its products to companies in the aerospace, military, automotive, industrial, sports and medical industries. The company was founded by Johnny Lincoln, Ph.D., and is based near Los Angeles in Santa Ana, CA (www.axiommaterials.com).

“We are delighted to partner with Sorenson Capital and Yukon Partners to co-author the next major chapter in the Axiom Materials story,” said Mr. Lincoln. “With the combined capabilities of Axiom, Sorenson Capital and Yukon Partners, the company’s future has never been brighter. We are now aligned and capitalized to accelerate our long-term strategic goals and ultimately reach our highest potential. It is an exciting time to be part of the Axiom team.”

Sorenson and Yukon will focus on accelerating Axiom’ growth through manufacturing improvements, personnel additions, and investments in research and development. “We are tremendous believers in Axiom and its future,” said LeGrand Lewis, managing director of Sorenson Capital. “Johnny and his team have built an exceptional company that has been able to attract and develop some of the best talent in the industry, and to establish world-class technology, technical and manufacturing excellence, in addition to a culture of high integrity. We are excited to see what this phenomenal company will accomplish with this infusion of capital and an expanded network of professional relationships.”

Sorenson Capital invests from $10 million to $40 million in small to middle-market buyout and growth equity opportunities with a particular focus on companies located in the Mountain and Western regions of the US. The firm has more than $1 billion in capital under management and is headquartered in Salt Lake City (www.sorensoncapital.com).

Yukon Partners makes subordinated debt and equity investments of $10 million to $40 million in middle market, private equity sponsored business transactions.  The types of transactions that Yukon invests in include buyouts, growth and platform strategies, recapitalizations, mergers & acquisitions, public- to-private buyouts, and refinancings. The firm is based in Minneapolis (www.yukonpartners.com).

© 2016 Private Equity Professional • 8-16-16

SRR Adds Three MDs to Team

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Stout Risius Ross (SRR) has hired three new managing directors for its investment banking group with the additions of Michael Krakovsky, Todd Parsapour and Keith Sipes.

Mr. Krakovsky will head the group’s special situations practice, Mr. Parsapour will lead the energy practice, and Mr. Sipes will lead the technology, media, and telecom (TMT) practice. Mr. Krakovsky and Mr. Sipes will be based in SRR’s Los Angeles office and Mr. Parsapour will be based in the firm’s Houston office.

Mr. Krakovsky’s background includes experience providing advice on a range of special situations transactions.  He has advised middle-market debtors and creditors on in-court and out-of-court restructuring transactions, and has focused on distressed companies as both an investment banker and as an investor. Before coming to SRR, he spent 13 years in Houlihan Lokey’s financial restructuring group in Los Angeles. In addition, Mr. Krakovsky has experience as a principal investor at Levine Leichtman Capital Partners Deep Value distressed debt fund, where he was a managing director.

“I’m thrilled to welcome Mike to the Investment Banking Group at SRR. His extensive experience helping clients navigate a variety of financial challenges and special situations is a great addition to our bench of senior bankers,” said Nick Jachim, Managing Director and Head of Investment Banking at SRR.

Mr. Parsapour has nearly 15 years of corporate finance experience including 12 years within the energy sector.  Prior to joining SRR, Mr. Parsapour worked at Simmons & Company International in Houston, where he was a senior executive in the Energy Services & Equipment Corporate Finance Group.

Mr. Sipes’ experience spans a range of TMT sectors including broadcasting, cable, digital media & internet, ecommerce, entertainment, information services, media technology services, publishing, wireless, and video games. He has spent more than 16 years at CRT Capital, Duff & Phelps, Thomas Weisel Partners, and Merrill Lynch providing strategic advisory and corporate financial services, including mergers, acquisitions, divestitures, joint ventures, restructurings, leveraged buyouts, recapitalizations, and equity and debt financings.

“Todd and Keith have worked with some of the biggest and most dynamic companies in the energy and TMT sectors and I am thrilled to add them to our team of industry experts. Our clients will benefit greatly from their unique perspectives, experiences, and relationships,” added Mr. Jachim.

SRR’s investment banking group focuses on mergers, acquisitions, and capital raising for privately-held businesses, private equity portfolio companies, and public companies. SRR also provides valuation & financial opinions, and dispute advisory & forensic services. The firm’s clients range from Fortune 500 corporations to privately held companies in numerous industries around the world. SRR is headquartered in Chicago (www.srr.com).

© 2016 Private Equity Professional • 8-16-16

Z Capital Adds Operating Pro

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Z Capital Group has hired Sean Maddock as a new managing director and operating partner. Mr. Maddock will serve as a member of Z Capital’s private equity investment and operations team. He will be active in the management and oversight of portfolio company initiatives, including international luxury hotel and destination resort management.

Mr. Maddock has more than 30 years of experience in the hospitality and luxury travel industries. Prior to Z Capital, he served as the regional director of operations at Evolution Hospitality and was responsible for overseeing acquisitions and the repositioning of hotels through renovation and expansion of food, beverage and other entertainment products. Prior to Evolution Hospitality, Mr. Maddock spent several years at KSL Resorts where he was a vice president and general manager at several properties, including The Homestead, the Arizona Biltmore and The Claremont Resort & Spa.

“Sean brings extensive experience in the luxury hotel industry to our bench of operating partners as we continue to expand our hospitality platform,” said James Zenni, President and Chief Executive Officer of Z Capital. “I am delighted to welcome him to our team and am confident that his track record of delivering exceptional financial results and creating value though repositioning, acquisitions and enhanced service offerings will significantly benefit our portfolio companies as we continue to create and maintain premiere luxury destinations.”

Z Capital makes control investments in middle-market distressed companies, operational turnarounds and special situations. The firm targets companies with an enterprise value of less than $1 billion or EBITDA of less than $100 million. Sectors of interest include consumer products, steel and steel processors, agricultural, gaming, leisure, real estate, manufacturing, specialty services and automotive. Z Capital is based in the Chicago suburb of Lake Forest and has additional offices in New York and Zurich (www.zcap.net).

© 2016 Private Equity Professional • 8-16-16