December 8, 2016
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Archives for December 8, 2016

HKW Acquires Xirgo

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xirgo-nf2Hammond, Kennedy, Whitney & Company (HKW) has acquired Xirgo Technologies, a provider of wireless equipment used to track, monitor, protect and control remote assets.

xirgo-nf22Xirgo provides M2M (machine-to-machine) telematics modules that support communication among devices connected to the Internet of Things (IoT) sector. M2M refers to devices other than cell phones that use wireless networks to communicate with other devices or networks. Typically, a small device known as an M2M module is embedded in a larger device that needs to communicate over the wireless network.  Xirgo’s products are used in fleet management, heavy equipment, asset tracking, usage based driving, high-risk vehicle finance, and rental applications. Xirgo is headquartered near Los Angeles in Camarillo, CA (www.xirgotech.com).

“We are excited to partner with HKW as we continue to expand our business. HKW has great respect for the technology we’ve built and taken to market, for our team, and for our culture. We believe we can move more effectively by leveraging HKW’s access to capital and resources in a way that we would be unable to do on our own or with any other partner,” said Roberto Piolanti, CEO of Xirgo.

HKW nf2Hammond, Kennedy, Whitney & Company invests in companies with revenues between $20 million and $200 million and EBITDAs between $2 million and $20 million. Since 1982, HKW has completed 53 platform management buyouts of small middle-market companies throughout North America as well as 56 add-on acquisitions. The firm was founded in 1903 and is headquartered in Indianapolis with an additional office in New York (www.hkwinc.com).

luke-phenicie-nf1“We are pleased to partner with Roberto Piolanti and the rest of the Xirgo management team as they continue to build a tremendous organization in the evolving IoT sector.  We feel fortunate they chose HKW as their investment partner and look forward to supporting them in the company’s next phase of growth,” said Luke Phenicie, Lead Transaction Partner at HKW. “Xirgo’s product differentiation and strong customer relationships combined with its talented team and industry growth prospects make this an exciting new platform investment for us.”

Near Earth LLC (www.nearearthllc.com), an investment bank specializing in the aerospace, satellite and M2M telematics sectors, represented Xirgo.

Capitala Group (www.capitalagroup.com) provided $23 million of second lien debt and equity to support the transaction.

© 2016 Private Equity Professional | December 8, 2016

Linden Buys Medron

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medron-nf7Flexan Medical Holdings, a portfolio company of Linden Capital Partners since February 2015, has acquired Medron, a contract manufacturer of medical devices.

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Medron provides design engineering, product development, prototyping, and high volume manufacturing services using a range of materials, including medical grade urethanes, silicones and engineered thermoplastics. The company’s primary products include catheters and endoscopy products. Medron, founded in 1994, has two facilities in Salt Lake City and approximately 170 employees (www.medroninc.com).

Flexan Medical is an outsourced manufacturer of silicone and rubber components sold into the implantable medical device, hearing technology and industrial markets. The company is led by President & CEO Jim Fitzgerald and has over 500 employees. Flexan Medical is headquartered in Chicago with two manufacturing facilities in Chicago and one in Suzhou, China. The company operates through two business units: FMI – a manufacturer of silicone rubber components for use in Class II disposable and Class III implantable medical devices (www.fmimed.com); and Flexan – a custom molder with expertise in difficult geometries and bonding rubber to metal (www.flexan.com).

ron-labrum-nf1The buy of Medron continues Linden’s strategy of building a large custom medical device manufacturer to benefit from the trend of purchasing consolidation by companies in the medical device industry. “The addition of Medron significantly enhances our contract manufacturing service offerings through the combination of world class elastomer component molding, device design, secondary operation services, and diversified global manufacturing locations,” said Ron Labrum, Linden Operating Partner and Chairman of Flexan Medical.

linden nf44Linden Capital Partners is focused exclusively on leveraged buyouts in the healthcare and life science industries with a specific interest in medical products, specialty distribution, pharmaceutical, and services segments of healthcare. Linden’s strategy is based upon three elements: healthcare and life science industry specialization; integrated financial and operating expertise; and strategic relationships with large corporations. The firm is based in Chicago (www.lindenllc.com).

© 2016 Private Equity Professional | December 8, 2016

Corridor Invests in Appraisal Company

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nationwide-nf55Corridor Capital has made an investment in Nationwide Property & Appraisal Services, a provider of appraisal management services for residential and commercial property lenders and mortgage originators.

The company’s customers include more than 20,000 loan officers, 400 different lending institutions and 7,500 independent appraisers. Nationwide is led by President Ryan Hernberg and is headquartered near Philadelphia in Gibbsboro, NJ (www.onestopappraisals.com).

Appraisal management companies (AMC) work with lenders and appraisers to facilitate the ordering, tracking, quality control and delivery of appraisal reports. AMCs have been in existence since the 1960s, but in limited numbers when compared to today. In 2009, New York Attorney General Andrew Cuomo, Fannie Mae and Freddie Mac, with support from the Federal Housing Finance Agency, developed a set of appraisal rules called the Home Valuation Code of Conduct (HVCC). The rules were developed to isolate parties with a financial interest in a mortgage loan transaction from appraiser selection and retention. Although no longer in force, HVCC influenced the Appraiser Independence rules now found in The Dodd-Frank Wall Street Reform and Consumer Protection Act. As a result, AMCs have proliferated as many lenders use their services in order to provide strict adherence to Dodd-Frank, Truth in Lending and Interagency Guidelines. Nationwide was the first licensed, independent AMC following the financial crisis in 2009.

craig-enenstein-nf1“The Nationwide team does great work meeting the rapidly changing and complex needs of the large and constantly evolving mortgage lending industry. As a pioneer in the appraisal management business, we believe the company is ideally suited to be a most trusted partner to the nation’s leading mortgage lenders and highest quality appraisers for all their property and appraisal service needs. We are excited to support the Nationwide team in its pursuit of that goal and share its commitment to the highest standards of service and compliance,” said Corridor CEO, Craig Enenstein.

corridor-capital-nf1Corridor Capital makes control investments of $3 million to $12 million in mid-market companies with EBITDAs of $2 million to $5 million. Sectors of interest include specialty manufacturing, business services, and environmental services. Corridor focuses on complex situations, particularly those requiring growth support or operational or financial engagement. The firm’s investor base includes approximately 150 executives across an array of industries and disciplines that the firm uses as an active resource for its portfolio companies and their teams. Corridor Capital is based in Los Angeles (www.corridorcap.com).

© 2016 Private Equity Professional | December 8, 2016

CIVC Building Risk Management Platform

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succeed-nf1CIVC Partners’ portfolio company KPA has acquired Succeed Management Solutions, a provider of web-based risk management and safety software for the insurance market. This is the third add-on acquisition that CIVC has completed since it acquired KPA in September 2014.

Succeed’s software products are used by insurance agencies, brokers, insurers, associations, and risk retention groups to improve risk management, loss control, and compliance results for their policyholders. In addition, organizations use the Succeed Risk Management Center to implement web-accessible employee safety training and management programs to lower the frequency and severity of claims. The company’s software assists with all aspects of a company’s insurance risk management and safety responsibilities including Certificate of Insurance tracking, Job Hazard Analysis management, Job Description building, Incident Tracking, employee Training Tracking, and Safety Data Sheets management. Succeed is based in the Portland suburb of Lake Oswego, OR (www.succeedms.com).

kpa-nf1KPA is a provider of environmental, health, and safety (EHS) compliance software and human resources management systems (HRMS). The company’s EHS systems provide compliance, online training, and field audit services to improve customer’s regulatory compliance, risk management, and loss control processes. KPA’s HRMS platform automates human resource activities, training, and compliance. KPA is led by CEO Vane Clayton and is based near Boulder in Lafayette, CO (www.kpaonline.com).

According to KPA, the buy of Succeed is a complementary acquisition that enhances KPA’s existing environmental, health and safety software offering; and provides entry into the growing insurance channel. “Succeed is a great complement to KPA’s existing product offerings and enables us to access new markets and better serve our clients through an expanded compliance platform,” said Mr. Clayton.

“The new partnership with KPA and CIVC gives us additional capital and a broader set of products and services, enabling us to better serve our clients and further accelerate our growth,” said Curt Shaw, CEO and founder of Succeed.

civc nf1CIVC invests from $15 million to $85 million in middle market companies that have at least $5 million of EBITDA.  Sectors of interest include business services and financial services. CIVC currently manages over $1.5 billion in capital and is investing out of CIVC Partners Fund V. The firm is based in Chicago (www.civc.com).

© 2016 Private Equity Professional | December 8, 2016

Merit Exits PVI

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pvi-nf9 Merit Capital Partners has sold PVI Riverside Holdings to publicly traded Watts Water Technologies. Merit initially invested in PVI in 2008 and later partnered with management to acquire the company in 2014.

pvi-nf22PVI is a manufacturer of engineer-specified plumbing and heating equipment for new construction and building retrofits. The company’s products utilize any of the common energy sources (gas, oil, electric, steam, and hot water) or combinations of energies in storage tanks ranging from 125 to 4500 gallons. PVI’s production is 100% dedicated to the ASME (American Society of Mechanical Engineers) commercial market with no residential manufacturing. PVI began building commercial, institutional, and industrial water heaters in 1961. Today, the company has more than 130,000 PVI installations worldwide. The company is based in Ft. Worth, TX (www.pvi.com).

merit-nf2Merit Capital Partners invests mezzanine and equity capital of $15 million to $60 million in companies with at least $5 million of EBITDA that are active in the manufacturing, distribution and services industries. Merit was founded in 1993 and is based in Chicago (www.meritcapital.com).

watts-nf1Watts Water Technologies (NYSE:WTS), the buyer of PVI, designs and manufactures products that are used in plumbing & flow control; water quality & conditioning; water re-use & drainage; HVAC; and municipal waterworks. The company’s products are used in residential, industrial, municipal, and commercial applications. Watts was founded by Joseph E. Watts in 1874 and is headquartered in Andover, MA (www.wattswater.com).

PVI was a portfolio company of Merit’s fourth fund and the sale closed on November 2, 2016.

© 2016 Private Equity Professional | December 8, 2016

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