Archives for September 7, 2016

Graycliff Acquires A-1 Machine

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Graycliff Partners has made an investment in A-1 Machine Manufacturing, a precision component manufacturer. Graycliff invested out of its latest buyout fund, Graycliff Private Equity Partners III.

A-1 Machine is a manufacturer and integrator of machined components and systems that are used in flat panel display equipment, semiconductor equipment and other general industrial end-markets. The company’s products – made from steel, stainless steel, aluminum, and other exotic metals – range from single components to turn-key manufacturing equipment and systems. The company was founded in 1977 by Yong Pak and is headquartered in Santa Clara, CA with additional operations in San Jose, CA and Incheon, South Korea (www.a-1machine.com).

“A1’s geographic presence, with strategic locations in Silicon Valley and Asia, is a strong differentiator for the company, and one that should allow it to grow through a variety of different avenues,” said Carl Barcoma, a Principal at Graycliff.

At closing of the transaction, Dan Rubin was named the new CEO of A-1. “We are extremely enthusiastic about the prospects of A-1, especially with our end markets of OLED (organic light-emitting diode) display and semiconductors strengthening and growing rapidly,” said Mr. Rubin. “Graycliff will help A-1 further increase the development of new product and service capabilities, allowing A-1 to better serve its current customers and penetrate new customers and end-markets.”

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).

© 2016 Private Equity Professional • 9-7-16

Ridgemont Invests in Nolan Transportation Group

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Ridgemont Equity Partners has made a growth equity investment in Nolan Transportation Group, a freight brokerage service provider. The company’s management team will remain the majority shareholders.

Nolan Transportation Group (NTG) provides expedited, truckload, less-than-truckload, rail, air cargo/air freight forwarding, and warehousing services through a network of over 40,000 independent transportation companies. NTG’s customer base includes food processors, manufacturing companies, paper, plastic, commodities, primary metals, recycling, lumber, produce, and importers and exporters. The company was founded in 2005 by Kevin Nolan, President and CEO, as a truckload brokerage operating with a box of cash and two employees. Today, NTG is recognized as one of the fastest-growing freight brokerages in the United States – the company was #461 in Inc. Magazine’s 2016 list of America’s 500 fastest-growing private companies – with 11 offices nationwide, over 500 employees, and over 5,000 customers. NTG is headquartered north of Atlanta in Roswell, GA (www.ntgfreight.com).

“This capital raise marks an important milestone for NTG as we continue on our path to become one of the largest providers of freight brokerage services in North America,” said Mr. Nolan. “We welcome not only Ridgemont’s strong logistics expertise but most importantly their cultural fit with NTG, which is integral to the success of our business.”

“We decided to seek a financial partner to bolster our current growth strategy; to continue to build out our brokerage operations team; and to invest in technology that will increase our value and integration with our customers and carriers,” said Harold Baron, Senior Vice President, NTG.

“We have formed a strong relationship with Kevin Nolan and the NTG team over the past several years, and we’re very excited to be announcing our new partnership,” said Tim Dillon, Vice President at Ridgemont. “NTG is among the fastest growing businesses in the $50 billion truckload brokerage market and we recognize what an outstanding operation Kevin and his team have built. Run-rate revenue is over $300 million and has more than doubled in size over the last two years.”

“Ridgemont continues to be very active in the third party logistics sector, now closing our third platform investment in the last two years in addition to four add-on acquisitions,” said Rob Edwards, Partner at Ridgemont. “I expect that Ridgemont will continue to find attractive opportunities in this sector over time.”

Ridgemont Equity Partners focuses on middle market buyout and growth equity investments of $25 million to $100 million. The firm invests in the following sectors: basic industries and services; energy; healthcare; and telecommunications, media and technology. The firm is headquartered in Charlotte with an additional office in Dallas (www.ridgemontep.com).

© 2016 Private Equity Professional • 9-7-16

Thompson Street Adds On to Microbiology Research

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Microbiology Research Associates, a portfolio company of Thompson Street Capital Partners since May 2015, has acquired Accuratus Lab Services from Avista Pharma Solutions.

Accuratus is a provider of microbiology, virology, and analytical chemistry GLP (Good Laboratory Practices) testing services to ensure compliance with registration standards for the developers and manufacturers of EPA-regulated antimicrobial and consumer products. Accuratus also helps companies in the medical device and biopharmaceutical industries with method development and validation of cleaning, disinfection, and sterilization procedures. The company is led by its General Manager Alan Roth and is headquartered near Minneapolis in Eagan, MN (www.accuratuslabs.com).

Microbiology Research Associates (MRA) is a provider of microbiology testing services with a specialization in GMP (Good Manufacturing Practices), United States Pharmacopeia (USP) testing for sterile and non-sterile products, and Drug Quality and Security Act (DQSA) compliance for hospital pharmacies and compounding facilities. Customers include biopharma, medical device, pharmacy and cosmetic companies. MRA is led by President Fran McAteer and is based near Boston in Acton, MA (www.mra-bact.com).

“MRA is pleased to partner with Accuratus and looks forward to expanding and integrating both companies’ services to provide leadership and further our expertise in microbiological contamination control,” said Mr. McAteer. “With patient care and infection control issues at the forefront of today’s society, growth in disinfectants, preservatives, sanitizers and new antibiotic research is accelerating, and this partnership will have the capabilities to meet these challenges.”

Following the closing of the transaction, Accuratus’ laboratory facilities will remain in Eagan, MN, and MRA’s laboratory facilities will remain in Acton, MA.

Thompson Street makes investments in companies with annual revenues between $20 million and $200 million and EBITDA between $4 million and $15 million. Since its founding in 2000, Thompson Street has acquired more than 100 companies in the business services, healthcare services and engineered products sectors. The firm held a final close of Thompson Street Capital Partners IV, LP with $640 million of capital commitments in December 2015. Thompson Street is based in St. Louis (www.tscp.com).

Avista Pharma Solutions, the seller of Accuratus Lab Services, is a contract testing and manufacturing company with facilities in Durham, NC; Longmont, CO and Agawam, MA (www.avistapharma.com).

Fairmount Partners (www.fairmountpartners.com), an investment bank based in West Conshohocken, PA, was the financial advisor to Accuratus and St. Louis-based investment bank Nolan & Associates (www.nolanassoc.com) was the financial advisor to MRA.

© 2016 Private Equity Professional • 9-7-16

SPC Closes Oversubscribed Sixth Fund

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Swander Pace Capital has closed SPC Partners VI, LP, with $510 million of capital commitments. The fund exceeded its initial target of $400 million. Swander Pace’s prior fund, SPC Partners V, LP, closed in 2013 with commitments of $350 million.

“We’d like to thank our investors for their overwhelming support that allowed us to raise this fund quickly and almost exclusively from existing investors,” said Andrew Richards, Founder and Managing Director at Swander Pace Capital. “Their enthusiasm for our strategy and track record allowed us to exceed our target in a smooth and quick fundraising process.”

Swander Pace invests in middle-market consumer products companies including branded and non-branded manufacturers, marketers, and distributors that sell through a range of retail and institutional channels. The firm generally targets companies that have up to $400 million in revenues. Swander Pace was founded in 1996 and has offices in San Francisco; Bedminster, NJ; and near Toronto in Oakville, ON (www.spcap.com).

Swander Pace – led by managing directors Andrew Richards, Mark Poff, Mo Stout, Corby Reese, Rob DesMarais and Heather Smith Thorne – began fundraising in mid-April with an initial target of $400 million. The firm exceeded that target with a first close of $450 million in June, and received final commitments in mid-August to round out the fund at $510 million.

The closing of Fund IV comes on the heels of a period of successful exits and new acquisitions for Swander Pace. In the past 18 months, the firm has had a number of high-profile exits, including: the sale of Renew Life Formulas to The Clorox Company, the sale of Merrick Pet Care to Nestle Purina, and the sale of Applegate Farms to Hormel Foods. During that time period, Swander Pace also acquired two platforms in the vitamin, mineral, and supplement category – Swanson Health Products and Captek Softgel International – as well as Voortman Cookies, a manufacturer of cookies and wafers.

“We are thankful for the short fundraising process achieved with the support of our limited partners,” said Mr. Poff. “As a result, we are able to stay focused on partnering with family-run and entrepreneurially-driven consumer businesses and working closely with our management teams to drive revenue growth and operating improvements.”

© 2016 Private Equity Professional • 9-7-16

MidOcean Hires Two CIFC Managers

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MidOcean Partners has added two new members to its team with the hirings of Spencer Potts as the firm’s Head of Business Development and Ruth Lane as Head of Investor Relations.

“Spencer and Ruth are both highly accomplished investment management industry executives,” said Ted Virtue, Chief Executive Officer of MidOcean. “We are thrilled to welcome them to our team and look forward to leveraging their relationships and alternative asset management expertise as we seek to deliver a premier solutions-based experience to our investors and expand our client base globally.”

Mr. Potts joins MidOcean from CIFC – a private debt manager specializing in secured US corporate loans – where he served as Head of Business Development. Previously, he spent eight years as managing director and head of business development at Silver Creek Capital, where he marketed institutional investment portfolios centered around alternative assets including hedge funds, private equity and real estate. Prior to that, he was a director in Merrill Lynch’s hedge fund origination group, sourcing and marketing institutional hedge fund portfolios. Mr. Potts holds a BA in History from the University of New Hampshire.

Ms. Lane also joins MidOcean from CIFC, where she served as Head of Investor Relations. Previously, she was associate director of investor relations and marketing at Mount Kellett Capital Management, where she was responsible for supporting the investor relations, marketing, and business development activities of the firm. Before that, she worked in institutional research sales and equity sales trading for Credit Suisse Securities. Ms. Lane graduated from Princeton University with a BA in Politics.

MidOcean invests in middle market companies active in the business and media services, consumer, and industrial services sectors.  Through MidOcean Credit Partners, which launched in 2009, the firm manages approximately $4 billion across a series of alternative credit strategies, collateralized loan obligations, and separately managed accounts. The firm was founded in 2003 and has offices in New York and London (www.midoceanpartners.com).

© 2016 Private Equity Professional • 9-7-16