Archives for January 27, 2017

Millstein Forms GRS

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Millstein Capital has formed a new platform company, Government Revenue Solutions (GRS), to acquire four subsidiaries of publicly-traded PRA Group for $91.5 million in cash.

The acquired subsidiaries are MuniServices, Revenue Discovery Systems, Broussard Partners and eGov Systems, which collectively provide revenue enhancement, technology and consulting services for government agencies (www.muniservices.com) (www.broussardpa.com) (www.revds.com) (www.e-govsystems.com).

As part of the transaction, Millstein Capital has named Craig Adler as the new Executive Chairman and Chief Executive Officer for GRS. Mr. Adler has more than 35-years of accounting, audit and public sector experience. He formerly served as Executive Vice President and CFO at DLT Solutions, a value-added reseller of software to federal, state and local governments and a current portfolio company of Millstein Capital.

“The management teams at GRS’s operating companies have done an outstanding job over the last 20 years to expand the services, clients and reputation of their respective firms,” said Mr. Adler. “Millstein Capital sees immense value in MuniServices, RDS, Broussard Partners and eGov, and wants to ensure that their momentum in the marketplace continues.”

Millstein Capital is the private equity investment arm of Millstein & Co., a financial advisory firm with offices in Washington DC and New York. The group makes control investments in middle-market business services, industrial, consumer and technology-enabled businesses that are based in North America.  The group is based in New York (www.millsteincapital.com) (www.millsteinandco.com).

PRA Group (NASDAQ:PRAA) (formerly Portfolio Recovery Associates) is a debt purchasing and debt collections company serving banks, businesses, and government clients. In recent years, PRA Group has been the subject of litigation from the Attorney General of New York and the Consumer Financial Protection Bureau which have alleged that the company has engaged in improper debt collection practices. PRA Group is based in Norfolk, VA (www.pragroup.com).

© 2017 Private Equity Professional | January 27, 2017

 

 

Power Group of Smiths to Dunes Point

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Dunes Point Capital has acquired Power Distribution, Inc. from Smiths Group for $203 million.

Power Distribution (PDI) designs, manufactures, and services power distribution, static switching, and power monitoring equipment for corporate data centers, industrial and commercial customers. Company brand names include PDI and Onyx Power. The company is headquartered in Richmond, VA and has operating facilities in Virginia and California with approximately 450 employees (www.pdicorp.com) (www.onyxpower.com).

PDI had total revenues of $110 million in its last fiscal year (12 months ending July 2016) with an operating profit of $13.8 million.

Dunes Point Capital (DPC) is a family office and private investment firm that makes control investments in companies operating in the general industrial and energy sectors. DPC targets companies with enterprise values of up to $500 million. The firm was founded in 2013 by Timothy White, a former Senior Managing Director of GSO Capital Partners and Blackstone where he served as Head of GSO Private Equity Investing, Co‐Head of Mezzanine Investing, and Co-Portfolio Manager for GSO’s Capital Opportunities Fund I.  Dunes Point Capital is based in Rye, NY (www.dunespointcapital.com).

Smiths Group (LSE: SMIN) is a diversified engineering business operating through five divisions: Smiths Detection is the world’s largest manufacturer of sensors for the detection of explosives, weapons, chemical agents, biohazards, narcotics and contraband; John Crane is a manufacturer of seals and associated products used in the process industries; Smiths Medical is a manufacturer and supplier of specialty medical devices and equipment; Smiths Interconnect is a manufacturer of electronic and radio frequency components; and Flex-Tek is a supplier of components used to heat and move fluids and gases. The company is headquartered in London and has approximately 23,500 employees (www.smiths-group.com).

Debt for the transaction, together with an equity co-investment, was provided by FS Investments (www.fsinvestments.com), GSO Capital (www.blackstone.com), and Bank of America Business Capital.

The Transaction Advisory Group of Alvarez & Marsal (www.alvarezandmarsal.com) was the financial advisor to Dunes Point Capital.  Harris Williams & Co. (www.harriswilliams.com) served as financial advisor to Smiths Group.

© 2017 Private Equity Professional | January 27, 2017

Sun Buys Arrow Tru-Line from Long Point

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Sun Capital Partners has acquired Arrow Tru-Line, a manufacturer and distributor of garage door hardware and fittings, from Long Point Capital which acquired the company in June 2005.

Arrow Tru-Line is the nation’s leading independent manufacturer of hardware for residential and commercial overhead garage doors. The company’s components provide are used for the operation of garage door systems, including horizontal and vertical tracks, center bearing supports, hinges, struts, torsion tubes, rollers, brackets, and cable assemblies. Arrow Tru-Line sells its products to OEMs, dealers, and distributors. The company operates two plants and four distribution centers in the US and Canada. Arrow Tru-Line was founded in 1970 and is headquartered southwest of Toledo in Archbold, OH (www.arrowtruline.com).

Sun Capital sees potential to grow Arrow Tru-Line through maximizing operational efficiencies and reducing procurement costs. “Our investment in Arrow Tru-Line is an exciting opportunity for Sun Capital to leverage its resources and expertise to drive growth,” said Marc Leder, Co-CEO at Sun Capital. “We are looking forward to working with management to further expand Arrow’s market share.”

Sun Capital invests in leveraged buyouts, equity, and debt in companies that can benefit from its in-house operating professionals and experience. Sun Capital has invested in and managed more than 330 companies worldwide with combined sales in excess of $45 billion since the firm’s inception in 1995. The firm has offices in Boca Raton, Los Angeles and New York, and affiliates in London, Frankfurt, Stockholm and Shenzhen (www.SunCapPart.com).

“Arrow Tru-Line’s position as the leading player in this space is a testament to the quality of the products, high level of customer service, and hard work of the company’s entire organization,” said Jeremy Stone, Managing Director at Sun Capital. “We’re excited to partner with them to support and accelerate the Company’s success.”

Long Point Capital, the seller of Arrow Tru-Line, invests in manufacturing, distribution, and service companies with revenues of $30 million to $200 million and at least $5 million of EBITDA. The firm has offices in Royal Oak, MI (near Detroit) and New York (www.longpointcapital.com).

© 2017 Private Equity Professional | January 27, 2017

Veritas Acquires Harris IT Business

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Veritas Capital has agreed to acquire the government IT services (GIT) business of Harris Corporation for $690 million in cash.

GIT provides IT and engineering managed services to US government agencies, including supporting NASA’s Space Communications Network and Deep Space Network programs, and operates within the company’s Critical Networks segment.  Revenue for 2017 for GIT is estimated to be approximately $1 billion.

Veritas Capital invests in companies active in the aerospace & defense, healthcare, technology, national security, communications, energy and education sectors. The firm is headquartered in New York (www.veritascapital.com).

Harris Corporation (NYSE:HRS) is a defense contractor and information technology services provider that produces wireless equipment, tactical radios, electronic systems, night vision equipment and both terrestrial and space born antennas for use in the government, defense and commercial sectors. The company is headquartered in Melbourne, FL and has approximately $7.5 billion of annual revenue and more than 21,000 employees (www.harris.com).

© 2017 Private Equity Professional | January 27, 2017