Archives for February 2017

Driehaus Exits Syntac Coated Products

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Syntac Coated Products, a portfolio company of Driehaus Private Equity since 2013, has been sold to Shurtape Technologies. The combined company has been renamed Shurtape Specialty Coating, LLC.

Syntac Coated Products (SCP) is a designer and manufacturer of specialty, pressure-sensitive tapes for automotive, medical, construction, graphic arts, sound control and product assembly applications. The company’s product portfolio includes single-coated, double-coated, unsupported transfer and self-wound tapes.

The company is comprised of two business units: the industrial coatings operation founded in Connecticut in 2001 and the Syntac Medical Specialties (SMS) division, which the company acquired in 2015. The SMS division specializes in adhesive-based medical products that are used for wound care and patient monitoring.

SCP is led by its founder and CEO Curt Rutsky. Aaron Rutsky is the company’s Vice President and is also the President of the SMS division. SCP, founded in 2001, has approximately 50 employees and operates from a 60,000-square-foot manufacturing facility and headquarters in New Hartford, CT and a new 23,000-square-foot facility in Sarasota, FL (www.syntacusa.com).

Shurtape is a fifth-generation, family owned, business that provides tape products used in the packaging; building and construction; DIY; HVAC; industrial; maintenance, repair and operations (MRO); arts and entertainment; and transportation industries. Products include masking and paper, foil and film, packaging, double-coated, cloth and duct, and other specialty tape products. The company also makes packaging dispensers and equipment for automated and manual packaging applications. Shurtape has production facilities in the United States, Canada, United Kingdom, Germany, Mexico, Peru, United Arab Emirates, and China. The company was founded in 1880 as Shuford Mills (a maker of yarns, cordage and twine) and today has approximately 1,500 employees. The company is headquartered in Hickory, NC (www.shurtape.com).

“The combination of Shurtape and Syntac enhances our ability to support our customers through expanded research and development capacity, broadened production capabilities and global distribution,” said Stephen Shuford, CEO for Shurtape Technologies. “We are excited about the future and look forward to the growth that this merger makes possible for ourselves and for our valued customers.”

Driehaus Private Equity invests from $1 million to $30 million in companies that have revenues of at least $5 million. The firm was founded in 2011 by Richard Driehaus, the founder, chief investment officer, and chairman of Driehaus Capital Management. Driehaus Private Equity is based in Chicago (www.driehauspe.com).

Blaige & Company was the financial advisor to Syntac Coated Products. “Syntac’s value-added niche and strong financial performance allowed our team to position Syntac to achieve a premium valuation and to deliver a wide range of potential partners and deal structures, such that the optimal growth partner was identified,” said Thomas Blaige, Chairman and CEO. Blaige & Company specializes in the packaging, plastics, and chemicals sectors. The firm was founded in 2003 and has offices in Chicago and Miami (www.blaige.com).

“With the Blaige process, we had the benefit of multiple attractive offers for Syntac. Shurtape’s strong market position and unique culture tied to its roots of 130 years as an independent family business made them a perfect partner for Syntac,” said Curt Rutsky.

Charlotte-based investment bank North Inlet Advisors (www.northinletgroup.com) was the financial advisor to Shurtape.

© 2017 Private Equity Professional | February 28, 2017

Branford Castle Keeps Rumbling

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Branford Castle Partners, has acquired Surface Preparation Technologies, a provider of rumble strips and related roadway safety services.

Surface Preparation Technologies (SPT) has installed more than 150,000 miles of rumble strips across 49 states. The company designs and manufactures its own fleet of rumble-strip machines, or “mills” which it believes run significantly faster and are more durable than competitors’ machines. The company’s mills can achieve speeds of up to 360 cuts per minute, or over 20 miles of asphalt rumble strips in a single eight hour shift. This is, according to the company, four times faster than its closest competitor. Faster cut times lead to less time lost for traffic control, more efficient road clean up, and can lead to early completion incentives. SPT was founded in 1988 and is led by CEO Steve Burke. The company is based in Mechanicsburg, PA (www.rumblestrips.com).

“Rumble strips are vital highway and roadway safety features that alert inattentive drivers of potential danger, and are a proven and cost-efficient measure to keep travelers safer by reducing the risks of crossover and run-off traffic accidents,” said Mr. Burke.

“SPT has established itself as the national leader in the rumble-strip market, with a reputation among its customers for outstanding service and reliability,” said Eric Korsten, Managing Director.  “We are especially excited to work on this investment with Abacus Finance Group, which is providing senior debt financing, and Brookside Mezzanine Partners, which is providing mezzanine debt financing.  Of particular note, both of our lender partners have also made equity co-investments in the transaction.”

Branford Castle invests in companies that have enterprise values of up to $75 million and also have from $1.5 million to $15 million of EBITDA. Sectors of interest include consumer goods and services; industrial and manufacturing; value-added commercial distribution; business services; and marine products and services. Between its founding in 1986 to 2016, Branford Castle operated as a family office.  In October 2016 the firm held a final close of its first fund that was open to outside investors. The buy of SPT is the second platform investment for this fund, following the July 2016 acquisition of Earthlite Massage Tables – a maker of spa, massage and other wellness equipment.

“With this second deal, we are moving efficiently to deploy our investors’ capital, and we are working hard to close additional acquisitions in the near future,” said John Castle, a Managing Partner of Branford Castle.  “As was the case with Earthlite, SPT’s management team invested in the transaction alongside Branford Castle and will continue to lead the company.”

Branford Castle is headquartered in New York (www.branfordcastle.com).

© 2017 Private Equity Professional | February 28, 2017

Blue Point Adds On to Premier Needle

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Premier Needle Arts, a portfolio company of Blue Point Capital Partners, has acquired Crafts Americana Group.

Crafts Americana Group (CAG) is a supplier of knitting, crochet, quilting, sewing and other hobbyist products. The company operates through three divisions: (1) The Artist’s Club sells decorative painter supplies including tole painting books, project surfaces, paints brushes and tools; (2) Connecting Threads sells products used by quilters including quilting books, fabrics, notions and supplies; and (3) Knit Picks sells yarn, books, patterns, and needles and supplies for knitters. Crafts Americana was founded in 1975 by Donna Santos and sold to Bob and Kelley Petkun in 1990. Today, the company is led by CEO Matt Petkun and is headquartered in Vancouver, WA (www.craftsamericana.com) (www.ArtistsClub.com) (www.ConnectingThreads.com) (www.KnitPicks.com).

Premier Needle Arts (PNA) is a provider of sewing, quilting, knitting and fiber art supplies and products to a global network of independent quilting stores, sewing retailers, quilting distributors and dealers and consumers.  Three companies operate under the Premier Needle Arts holding company:  (1) Handi Quilter (North Salt Lake, UT) creates and builds both branded and private-label longarm quilting machines, and produces quilting tables and frames, as well as longarm quilting accessories, scissors, rulers, templates and patterns; (2) Superior Threads (St. George, UT) is a supplier of 43 lines of premium threads used in quilting and sewing; and (3) Quilt Pro Systems (Dallas, TX) provides digital products that enable quilters to digitally and electronically design and audition their projects. Premier Needle Arts, led by CEO Mark Hyland, is headquartered in North Salt Lake, UT (www.premierneedlearts.com).

PNA was formed by Blue Point when it acquired Handi Quilter from High Road Capital Partners in December 2014. The buy of CAG is the third add-on acquisition for PNA under Blue Point ownership. “From the onset, Blue Point’s focus was to turn PNA into a multifaceted business, and pursue acquisition opportunities in related quilting and other niche hobby fiber arts categories.  CAG’s product offering supplements and is a natural fit with PNA,” said Sean Ward, a Partner with Blue Point.

According to Blue Point, the acquisition of CAG provides growth and synergy opportunities which can be achieved by leveraging Blue Point’s domestic operational capabilities, as well as digital marketing and e-commerce resources.  Blue Point also brings strategic Shanghai resources to assist with sourcing and supply chain initiatives.

Blue Point Capital Partners is a lower middle market private equity firm that invests in manufacturing, distribution and service businesses that have from $20 million to $300 million in revenue. The firm has over $825 million in committed capital and has offices in Cleveland, Charlotte, Seattle, and Shanghai (www.bluepointcapital.com).

© 2017 Private Equity Professional | February 28, 2017

Peyser Joins Harvest Partners SCF

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Harvest Partners SCF, the non-control private equity strategy of Harvest Partners, has added Chris Peyser to its team as a Senior Associate. HP-SCF targets private equity-like returns while assuming risks more characteristic of debt investments. Mr. Peyser will be responsible for evaluating, structuring, executing and monitoring portfolio investments.

“We have great confidence in Chris’s abilities and are very pleased that he has joined our team. We look forward to his contributions to our investment program,” said Jay Hegenbart, Senior Managing Director and Portfolio Manager.

Prior to joining HP SCF, Mr. Peyser was a Senior Associate at Kelso & Company, where he focused on leveraged buyout transactions. He began his career at Bank of America Merrill Lynch. Mr. Peyser has an AB in Politics from Princeton University.

Harvest Partners SCF targets investments of $20 million to $250 million in companies where the business owners need equity capital but do not wish to dilute or sell their ownership. Target companies have revenues of $100 million to $750 million and operate in the business and consumer services; healthcare services; industrial services; manufacturing; and distribution sectors.

Since founding in 2014, HP SCF has completed nine structured equity investments totaling approximately $263 million. These investments include: GPM Investments, Roland Foods, OTG Management, Dental Care Alliance, LAZ Karp Partners, Arctic Glacier Holdings, Packers Holdings, Athletico Physical Therapy and AxelaCare Holdings.

HP SCF is actively seeking new investment opportunities and is headquartered in New York (www.hp-scf.com).

© 2017 Private Equity Professional | February 28, 2017

Blue Point Acquires FLSA

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Blue Point Capital Partners has acquired Fire & Life Safety America, a provider of fire and life safety system inspection, maintenance, repair and installation services. This buy is the seventh platform investment for Blue Point’s third fund which closed in November 2014 at the hard cap of $425 million.

According to Blue Point, Fire & Life Safety America (FLSA) is one of the nation’s largest fire and life safety services providers and a large percentage of the company’s revenue comes from recurring inspection and monitoring accounts. FLSA services fire alarms, sprinkler systems, fire pumps, pipe/hose systems, fire extinguishers, kitchen hood suppression and emergency and exit signs.  The company has approximately 800 employees and services customers from fifteen branch locations in the mid-Atlantic and southeastern United States, as well as through a national partner network. FLSA, led by CEO Tom York, was founded in 1997 as East Coast Fire Protection and is headquartered in Richmond, VA (www.flsamerica.com).

Blue Point Capital Partners acquired FLSA from PNC Riverarch which acquired the company from KRG Capital in June 2015. KRG Capital was the company’s first institutional investor when it invested in East Coast Fire Protection in October 2005. FLSA has completed numerous add-on acquisitions under its private equity owners including the buys of Southeast Fire Protection, Affordable Fire Protection, Fire Watch Services, Elite Fire Protection, Texas Southwest Fire Protection, and Universal Sprinkler.

“Blue Point has a proven track record of investing in business-to-business service models and developing growing businesses into national leaders; FLSA is an ideal platform for the firm,” said Juli Marley, a Partner with Blue Point.  “We are thrilled to partner with this talented management team and support their efforts to expand the service segment, green field new locations and identify strategic acquisitions.”

Blue Point Capital Partners is a lower middle market private equity firm that invests in manufacturing, distribution and service businesses that have from $20 million to $200 million in revenue. The firm has over $800 million in committed capital and has offices in Cleveland, Charlotte, Seattle, and Shanghai (www.bluepointcapital.com).

PNC Riverarch, the seller of FLSA, invests from $10 million to $50 million in privately-held companies headquartered throughout North America. Sectors of interest include outsourced services, specialized manufacturing, and value-added distribution. PNC Riverarch is a division of PNC Capital Finance which in turn is a subsidiary of The PNC Financial Services Group (NYSE: PNC). PNC Riverarch is based in Pittsburgh (www.pncriverarch.com).

© 2017 Private Equity Professional | February 24, 2017

LaSalle Acquires Orion Financial

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MetaSource, a portfolio company of LaSalle Capital, has acquired Orion Financial Group. Orion represents LaSalle Capital’s fourth add-on investment to the MetaSource platform since it acquired the company in November 2013.

Orion Financial Group provides real estate document recording services, including mortgage assignments, lien releases, and document retrieval services to mortgage servicers, investors, credit unions, and lenders. The company performs its real estate document recordings in all 3,600 US counties. Orion is based near Dallas in Southlake, TX (www.orionfgi.com).

The acquisition of Orion expands MetaSource’s service offering focused on mortgage quality control, compliance advisory, and technology-enabled workflow services. “MetaSource is widely regarded as a rapidly growing, respected leader in the mortgage services space and we look forward to contributing additional growth to the platform,” said Mike Wileman, CEO of Orion.

MetaSource is a provider of technology-enabled BPO services with a focus on the financial services, healthcare and retail industries. The company offers a range of services including document processing, customer care and content management. MetaSource is based south of Salt Lake City in Draper, UT (www.metasource.com).

“Adding Orion to the MetaSource family perfectly complements the compliance solutions line-up of our current portfolio,” said MetaSource CEO, Adam Östhed. “We are delighted to welcome Orion’s team of experts to MetaSource.”

LaSalle Capital makes control investments of $10 million to $20 million in companies with revenues from $20 million to $100 million and EBITDA greater than $3 million. Sectors of specific interest include food & beverage and outsourced business services. The firm is currently investing out of its second fund which held a final closing in May 2012 with $205 million in commitments. Fund II is the successor to the firm’s inaugural $125 million Fund I which closed in 2005. LaSalle Capital is based in Chicago (www.lasallecapitalgroup.com).

© 2017 Private Equity Professional | February 24, 2017

Carlyle Closes Latest Fund

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The Carlyle Group has raised $2.5 billion for its fourth distressed and special situations fund, Carlyle Strategic Partners IV (CSP IV). The fundraising effort is more than triple the size of the previous fund and closed at the hard cap.

The CSP team in New York and London invests in the debt and equity of companies in the US, Europe and Asia experiencing financial, operational or cyclical distress. The fund has the flexibility to invest throughout the capital structure of a company in bank loans, public debt, public and private equity.

“Carlyle Strategic Partners IV builds on the team’s demonstrated ability to find attractive investments, establish control or exert influence, and drive value through operational improvements to generate compelling risk-adjusted returns,” said Shary Moalemzadeh, Managing Director and Co-head of CSP. “With the support of the Carlyle network, CSP IV is poised to source an increasing number of proprietary deals across an array of industries where we have deep sector expertise.”

Carlyle Strategic Partners is part of Carlyle’s global credit platform. The credit platform resides within the Global Market Strategies segment, which had $29 billion in assets under management as of December 31, 2016, and has 149 investment professionals in New York, Washington DC, Los Angeles, Chicago, Hong Kong and London.

The current global economic and market environment is laying the groundwork for solid distressed control and turnaround investment opportunities.
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Since 2004, the group has raised approximately $4.8 billion and invested in companies including Metaldyne, an automotive supplier of components for engines and transmissions; Brintons, a specialized global carpet manufacturer; Service King, one of the largest independent US chains of auto body repair shops; and Akari, an elderly nursing and residential home care provider in the UK.

“The current global economic and market environment is laying the groundwork for solid distressed control and turnaround investment opportunities.  We believe our experience and approach positions us well to capitalize on the best of these opportunities during the cycle,” said Ian Jackson, Managing Director and Co-head of CSP.

The Carlyle Group (NASDAQ: CG) invests in buyouts, growth capital, real estate and leveraged finance in Africa, Asia, Australia, Europe, North America and South America. Carlyle has expertise in various industries, including: aerospace, defense & government services, consumer & retail, energy, financial services, healthcare, industrial, real estate, technology & business services, telecommunications & media and transportation.  The firm employs approximately 1,600 people in 35 offices across six continents and is based in Washington, DC (www.carlyle.com).

© 2017 Private Equity Professional | February 24, 2017

CM Equity Exits PSS

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CM Equity Partners has agreed to sell its portfolio company Preferred Systems Solutions (PSS) to publicly-traded STG Group for a total consideration of approximately $119 million. This transaction is expected to close before the end of March. CM Equity Partners acquired PSS in September 2007.

PSS is a provider of software engineering & development; cyber security; cloud computing; systems engineering & technical assistance; business applications and financial management; and program and acquisition management services. Customers include the intelligence services, US Army, US Navy, Defense Logistics Agency, US Transportation Command, Defense Advanced Research Project Agency (DARPA), Federal Bureau of Investigation (FBI), and the Departments of Homeland Security and Transportation, among others. PSS is led by CEO Scott Goss and is headquartered in McClean, VA (www.pssfed.com).

“We are extremely pleased to become part of the STG Group as it will significantly increase our ability to provide an expanded set of advanced technology capabilities across the broad spectrum of critical national security programs,” said Mr. Goss. “The company’s commitment to outstanding customer support enables world class services in support of our country’s warfighters and the federal civilian workforce working daily to safeguard our country.”

CM Equity Partners makes control and minority investments of $5 million to $40 million in companies with $20 million to $200 million in revenues and $3 million to $20 million of EBITDA. Sectors of interest include federal services and aerospace & defense. The firm has made more than 70 acquisitions and investments since its founding in 1992. CMEP is associated with Carl Marks & Co., a private family investment office with merchant banking activities dating back to 1925. CMEP is based in New York (www.cmequity.com).

STG Group (OTC: STGG) is a provider of technology, cyber, and data services to more than 50 defense, intelligence, federal, and other national security agencies. The company was formerly known as Global Defense & National Security Systems and changed its name to STG Group, Inc. in November 2015. The company was founded in 1986 and is headquartered in Reston, VA (www.stg.com).

“We are excited to announce the next step in our transformation strategy for STG Group. With the acquisition of PSS, we are advancing our technological agility and ingenuity to meet the most complex and demanding national security challenges facing the US,” said STG President Phillip Lacombe.

Sagent Advisors, an investment bank with offices in New York, Chicago and McLean, VA (www.sagentadvisors.com), was the financial advisor to STG Group on this transaction.

© 2017 Private Equity Professional | February 24, 2017

Fireman Exits Skip Hop

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Fireman Capital Partners has sold its portfolio company Skip Hop, a designer and seller of baby and children’s products, to publicly-traded Carter’s for $140 million in cash plus additional payments based on performance. Fireman acquired a majority interest in Skip Hop in November 2013 for approximately $60 million.

Skip Hop designs and sells diaper bags, infant toys, nursery gear, bath, feeding and the ZOO line of toddler products. The company’s products are sold at over 5,000 locations in the US and Canada and in over 60 countries worldwide. Skip Hop was founded in 2003 by Ellen and Michael Diamant and is based in New York (www.skiphop.com).

“Fireman Capital’s track record in the consumer space and vision for our company was immensely helpful as we developed Skip Hop into the market leader it is today. We thank the firm for their support and look forward to further growth as part of the Carter’s team,” said Mr. Diamant.

“Skip Hop was a great investment for our firm, and we are thrilled to have been able to leverage our resources and operational expertise to help the company grow,” said Marla Sabo, Partner at Fireman Capital. “It has been a pleasure working with the entire Skip Hop organization and we are confident they have a bright future ahead under Carter’s leadership.”

Fireman Capital Partners invests from $50 million to $100 million of equity in consumer products companies with revenues between $25 million and $150 million and EBITDA from $20 million to $100 million. The firm was founded in 2008 by Chairman Paul Fireman, the former Chairman and CEO of Reebok International, and Managing Partner Dan Fireman and is based near Boston in Waltham, MA (www.firemancapital.com).

“Skip Hop is a dynamic, market leading company with unique and innovative products. We are proud to have partnered with Michael and Ellen Diamant in helping extend the company’s product portfolio, build their distribution network, expand internationally and further its online presence. We wish them continued success,” said Dan Fireman.

Harris Williams & Co. was the financial advisor to Skip Hop. The transaction was led by Managing Director Brent Spiller, and Associates Marshall Printy and Zach Ledwith of Harris Williams & Co.’s Consumer Group. “We are extremely happy to have represented Skip Hop on its sale to Carter’s,” said Mr. Spiller. “Skip Hop is one of the most exciting brands within the infant and juvenile category with a passionate consumer following.  We are delighted to have paired Skip Hop with a long-term partner in Carter’s who shares Skip Hop’s passion for the brand and vision for the future. This transaction marks another important milestone in our firm’s extensive track record advising premier brands in the infant and juvenile sector.”

Carter’s (NYSE:CRI) is one of the largest branded marketers of apparel and related products exclusively for babies and young children. Company owned brands include Carter’s and OshKosh B’gosh. Carter’s products are sold in department stores, national chains and specialty retailers domestically and internationally and also through nearly 1,000 company-operated stores in the US and Canada and online. Carter’s was founded in 1865 by William Carter and is based in Atlanta (www.carters.com).

© 2017 Private Equity Professional | February 23, 2017

New Heritage Invests in Continental Services

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New Heritage Capital has made an investment in Continental Services, a food-service provider serving corporate clients in Michigan.

Continental provides its customers with a range of services, including corporate cafés, grab-and-go markets, vending, office coffee, and special event catering. The company was founded by Jim Bardy in 1989 and is headquartered in Detroit (www.ContinentalServes.com).

Mr. Bardy will continue to control day-to-day operations of the company and will be active in directing the company’s strategic growth. “We have found true partners in New Heritage who believe in Continental’s mission and will support our exciting plans for growth,” he said. “Heritage’s experience with backing founder-owned businesses will prove invaluable as we enter our next phase of expansion with a continued focus on delivering industry-leading service to our customers.”

“We are excited to partner with an industry leader like Continental that is at the forefront of quality, technology and innovation in food management and look forward to helping management execute on their plan via organic opportunities and the active pursuit of add-on acquisitions,” said Melissa Barry, a Partner at New Heritage.

New Heritage invests minority or majority equity in companies with minimum revenues of $30 million and at least $5 million of EBITDA. Sectors of interest include aerospace, business services, consumer products, distribution, education and training, food and beverage, healthcare and healthcare services, industrial and infrastructure, manufacturing, pet products and services, specialty chemical, and test and measurement. Heritage was founded in 2006 and is headquartered in Boston (www.newheritagecapital.com).

© 2017 Private Equity Professional | February 23, 2017

Kinderhook Adds On to Primeritus

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Primeritus Financial Services, a portfolio company of Kinderhook Industries, has acquired Global Investigative Services.

Global Investigative Services (GIS) is a provider of vehicle skip tracing services, heavy equipment recovery and investigative services to financial services companies. The company was founded in 1997 by partners Greg Hill and Danny Tolbert and is headquartered near Dallas in Rockwall, TX (www.gis-investigations.com).

“GIS has established itself as a strong player in the skip tracing and heavy equipment recovery arena and we look forward to working with their team to continue to drive innovation, compliance, efficiency as well as best in class service for Primeritus’ and GIS’ clients,” said Chris McGinness, SVP of Operations for Primeritus. “Primeritus has made a concerted effort to grow in the credit union space and the acquisition of GIS will compliment this side of our business nicely.”

In February 2012, Kinderhook formed Primeritus Financial Services in partnership with three automotive finance executives – Chuck Tapp, Phil Hanks and Cam Hitchcock – and acquired the assets of ASR Nationwide, a provider of collateral recovery services to financial institutions. The purchase of GIS is the sixth add-on acquisition completed by Primeritus under Kinderhook ownership. The five earlier acquisitions were Roquemore (January 2016), Repo Remarketing (February 2014), Renovo Services (October 2012), M. Davis Company (June 2012), and the platform acquisition of ASR Nationwide (February 2012). Today, Primeritus Financial Services is a national provider of repossession management, remarketing, title services and skip tracing services to the auto finance industry. The company is based in Nashville (www.primeritus.com).

“We are delighted to join Primeritus’ team, which is the industry leader in recovery, skip tracing and remarketing services,” said Greg Hill, President of GIS.

Financing for this transaction was provided by Twin Brook Capital Partners, the middle market direct lending subsidiary of Angelo, Gordon & Co. (www.twincp.com).

Kinderhook makes control investments in companies with transaction values of $25 million to $150 million in which the firm can achieve financial, operational and growth improvements. The firm makes investments in non-core divisions of public companies, management buyouts of entrepreneurial-owned businesses, troubled situations, and existing small capitalization companies lacking institutional support. Kinderhook was founded in 2003 and is based in New York (www.kinderhook.com).

© 2017 Private Equity Professional | February 23, 2017

Wellness Pro Joins North Castle

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North Castle Partners, an investor in consumer businesses that promote healthy, active and sustainable living, has added Jay Galluzzo, co-founder and former CEO of Flywheel Sports, as a Managing Director of the firm.

“We welcome Jay to his new role as a managing director of North Castle. While working with Jay in his role as an NCP Operating Advisor, we recognized the value that he would bring as a North Castle investment professional based on his record as an entrepreneur, passion for the healthy living space and nose for new investment opportunities,” said Chip Baird, North Castle CEO and Founder.

Mr. Galluzzo has nearly 20 years of experience as an entrepreneur, executive and investor.  Since joining North Castle in 2016 as an operating advisor, he has been involved in sourcing and managing a number of investments. As a co-founder of Flywheel Sports, an operator and franchisor of stationary bike fitness clubs, he led the company from its launch in 2010 through its sale in 2014 to the Benvolio Group and Catterton Partners. During and after his time at Flywheel, he also led early stage investments in emerging brands including DreamDry and Montauk Brewing, and has served in an executive, advisory or board capacity for businesses including The Warnaco Group, Neuehouse and Qor performance apparel.

North Castle makes control investments in consumer-driven product and service companies located in North America with enterprise values ranging from $50 million to $500 million. Sectors of interest include beauty and personal care; consumer health; fitness, recreation and sports; home and leisure; and nutrition.  The firm’s current portfolio includes HydroMassage, Strengthen Lengthen and Tone, Curves International/Jenny Craig, Barry’s Bootcamp, Palladio Beauty Group, Mineral Fusion, Red Door Spas, Sprout Organics, SmartyPants, Brooklyn Boulders, Ibex Outdoor Clothing, and Turnbridge.

North Castle held a final closing for North Castle Partners VI, LP with $300 million of committed capital in August 2016. The new fund was oversubscribed and reached its close in just over six months of fundraising.

North Castle is headquartered in Greenwich, CT (www.northcastlepartners.com).

© 2017 Private Equity Professional | February 23, 2017

 

 

HKW Buys Walden Farm

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PANOS Brands, a portfolio company of Hammond, Kennedy, Whitney & Company (HKW), has acquired Walden Farms, a provider of branded calorie-free foods.

Walden Farms’ products span several categories and include salad dressings, syrups, coffee creamers, and sauces. The company was founded in 1972 and is headquartered in Linden, NJ (www.waldenfarms.com).

“Walden Farms represents exactly what we were looking for in an add-on acquisition,” said John Carsello, an HKW Partner. “The loyal customer base, strong financial profile, and health and wellness attributes of the brand resonated with us.”

PANOS Brands manages a portfolio of specialty food and beverage brands that includes dairy products, rice crackers, snacks, ready-to-eat meals, cooking ingredients, ginger cookies, cooking pastes, soy-based cheese, soy and rice beverages, baking ingredients, and many other items. Company owned brand names include Andrew & Everett, KA-ME, MI-DEL, Sesmark, Amore and Chatfield’s. PANOS, led by President and CEO Steven Grossman, was founded in 2006 and is based in Rochelle Park, NJ (www.panosbrands.com).

“Walden Farms has a premium brand name, broad product offering, and established presence at retail, which makes the company an ideal fit with PANOS,” said Mr. Grossman. “We look forward to creating incremental demand for Walden Farms products with increased exposure, formulation enhancements, and new product introductions.”

PANOS brands was acquired by HKW in January 2016 from High Road Capital Partners which in turn had purchased the company in January 2010 from Koninklijke Wessanen, an Amsterdam-based multinational food company with a focus on organic and natural food products (www.wessanen.com).

Hammond, Kennedy, Whitney & Company invests in companies with revenues between $20 million and $200 million and EBITDAs between $5 million and $20 million. Since 1982, HKW has completed 53 platform management buyouts of small middle-market companies throughout North America as well as 57 add-on acquisitions. The firm was founded in 1903 and is headquartered in Indianapolis with an additional office in New York (www.hkwinc.com).

Walden Farms was represented by Mazars USA (www.mazarsusa.com) in this transaction.

© 2017 Private Equity Professional | February 22, 2017

Arsenal Builds Accella

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Accella Performance Materials, a manufacturer of polyurethanes and recycled rubber products, has agreed to purchase certain assets of the North American spray polyurethane foam (SPF) business of Covestro.

The assets being acquired are located in Covestro’s facility located north of Houston in Spring, TX. This facility includes both commercial and production operations and has approximately 40 employees who will continue in their current positions.

Covestro was formed in 2015 when Bayer spun out its materials science division as an independent company. Today, Covestro is a producer of polymers and high-performance plastics and its products range from raw materials for polyurethanes to high-performance polycarbonates and precursors for paints, coatings, adhesives and sealants. The company is headquartered in Leverkusen, Germany (www.covestro.com/en).

Accella, acquired by Arsenal in 2012, is a manufacturer of custom formulated polyurethane systems and recycled rubber products. The polyurethane business is focused on formulations for spray, pour and cast applications involving foams, coatings, adhesives, sealants, and elastomers. The recycled rubber products business manufactures recycled tire crumb, equine matting, athletic flooring, and playground surfacing. The company has eight production facilities across the United States, one in Europe and one in China and is headquartered in the St. Louis suburb of Maryland Heights (www.accellacorp.com).

“This combination further strengthens Accella’s position as the leading independent polyurethane systems house in North America, and will enhance the value Accella brings to market with expanded technology, leading brands and great people. We are committed to support the ongoing growth of Accella and invest in strategies that will further transform the business,” said John Televantos, a Partner at Arsenal Capital.

Arsenal Capital Partners invests in middle-market specialty industrial and healthcare companies that have $100 million to $500 million in enterprise value.  Industries of specific interest include specialty industrials and healthcare companies. Arsenal has $1.7 billion of committed capital under management. The firm was founded in 2000 and has offices in New York and Shanghai (www.arsenalcapital.com).

“This acquisition will significantly improve Accella’s position in the spray polyurethane foam market and is another strategic step with our positive track record combining the best polyurethane based companies in the industry. The addition of a well-rounded product technology portfolio and a team of highly regarded industry experts will highly complement our current spray polyurethane foam business,” said Andy Harris, president and CEO of Accella.

© 2017 Private Equity Professional | February 22, 2017

Brynwood Sells Lightlife Foods

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Brynwood Partners has agreed to sell Lightlife Foods to publicly traded Maple Leaf Foods for $140 million.  The transaction is expected to close by the end of March 2017.

In September 2013, Brynwood formed Lightlife Foods to acquire Lightlife, one of ConAgra Foods’ brands with products that included vegetarian-based burgers, hotdogs, sausage, jerky and other meatless frozen and refrigerated items. The acquisition included the Lightlife manufacturing operation in Turners Falls, MA. Lightlife Foods has approximately 100 employees and is headquartered near Boston in Braintree (www.lightlife.com).

“We are pleased to announce the sale of Lightlife to publicly-traded Maple Leaf Foods, a leading consumer packaged protein company,” said Hendrik Hartong III, Chairman and CEO of Brynwood Partners.  “The sale of Lightlife to a high-caliber strategic buyer like Maple Leaf Foods is an excellent outcome for Brynwood.  We acquired Lightlife from ConAgra Foods and the sale to Maple Leaf Foods reaffirms our position as the leading lower middle market buyout firm for corporate carve outs.”

Brynwood Partners is an operationally-focused private equity firm that makes control investments in consumer focused lower middle-market companies. The firm has $725 million of capital under management. The firm was founded in 1984 and is based in Greenwich, CT (www.brynwoodpartners.com).

Piper Jaffray & Co. (www.piperjaffray.com) was the investment advisor to Lightlife and Maple Leaf Foods was advised by Centerview Partners (www.centerviewpartners.com).

© 2017 Private Equity Professional | February 22, 2017

Huron Keeps Building Sciens

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Huron Capital’s security services portfolio company Sciens Building Solutions has acquired W.W. Gay Fire & Integrated Systems.

W.W. Gay is a provider of fire detection and fire suppression systems, as well as data/security and electrical services. The company serves the healthcare, military/government, education/institution, commercial and industrial/utility end markets.  W.W. Gay has been owned and operated since 1991 by Nandu Paryani who will continue to lead the business locally as a division of Sciens. W.W. Gay is based in Jacksonville (www.wwgfp.com).

In September 2015, Huron formed Sciens in partnership with Terry Heath, a former Siemens executive, to pursue a buy-and-build investment strategy in the fire detection and security services sector. Mr. Heath’s experience at Siemens included 18 years in the Building Technologies division, where he focused on building fire and security detection systems.

“I have known Terry Heath for many years as he is a very well-regarded executive in the fire industry,” said Mr. Paryani. “I am excited to work with him and the Huron Capital team as we look to grow W.W. Gay and the Sciens platform.”

Acquisition targets for San Francisco-based Sciens include US or Canadian companies that have a minimum of $15 million in annual revenues and are active in providing fire detection services to commercial buildings, universities, hospitals, and other large, non-residential buildings.

The buy of W.W. Gay is the second add-on completed by Sciens. In September 2016 the company acquired Boca Raton-based WSA Systems-Boca (WSA) which designs, installs and maintains fire detection and fire suppression systems in commercial, institutional, and government facilities. WSA was owned and operated by Brad Golub and Joe Del Pizzo, both of whom remain active in the business and WSA continues to operate in its regional market of Southern Florida as a division of Sciens.

Huron invests up to $70 million per transaction in middle market companies that have revenues up to $200 million and EBITDAs of $5 million or more. Sectors of interest include specialty manufacturing, business services, consumer goods & services, and healthcare. The firm is led by its senior partners Brian Demkowicz, Michael Beauregard, John Higgins and Peter Mogk. Huron was founded in 1999 and has offices in Detroit and Toronto (www.huroncapital.com).

Last month, Huron closed the firm’s fifth fund, The Huron Fund V, LP, with $550 million of capital commitments. The new fund closed at its hard cap and in excess of its $500 million target. The final close was reached after just three months of marketing and was oversubscribed with over $1 billion of demand.

© 2017 Private Equity Professional | February 22, 2017

May River Adds On to Hunt Valve

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Hunt Valve Company, a portfolio company of May River Capital, has acquired Precision Technology, a maker of linear motion actuators. This is the first add-on acquisition for Hunt Valve since being acquired by May River in February 2016. At closing, Precision Technology will be rebranded Hunt Valve Company – Actuator Division.

Precision Technology designs, manufactures and supplies severe environment linear motion actuators used in automation, machinery, material handling and positioning applications. The company’s specializes in electro-mechanical actuation with a range of rod-less and rod-style linear actuators, screw jacks, linear tables, and other motion control products. Company owned brand names include Wiesel and Victory. Precision Technology has a 50,000 sq. ft. manufacturing and headquarters facility in Roanoke, VA (www.pt-usa.net).
Hunt Valve’s customers operate in the primary metals (steel and aluminum), energy (nuclear, hydro, and downstream oil & gas), and process chemicals sectors. The company’s products are also used in US Navy nuclear-powered vessels, including all submarines and carriers in operation as well as the Virginia Class, Ford Class and soon-to-be-in-production Ohio Replacement (Columbia Class). Hunt Valve is led by President and CEO Brad Sterner who joined the company in November 2015. The company is headquartered southwest of Youngstown in Salem, OH (www.huntvalve.com).

The buy of Precision Technology complements Hunt Valve’s severe duty, fluid power engineering products used by military and industrial customers. “The acquisition of Precision Technology’s assets extends our expertise as we move into the motion control segment and allows us to capitalize on the change from hydraulic and pneumatic to electro-mechanical actuation technologies in applications requiring heavier loads, longer run lengths, faster speeds and precise positioning,” said Mr. Sterner. “An example of this trend is the use of electro-mechanical actuation to replace hydraulics in severe duty applications aboard the US Navy’s new Ford Class aircraft carriers.”

“Precision Technology’s product lines will allow Hunt to serve a variety of industrial blue chip customers, along with naval boat contractor Huntington Ingalls Industries and the US Navy,” said Steve Griesemer, a Partner at May River. “We expect these capabilities to enhance our product offerings and allow us to provide better service to our customers, accelerating the company’s profitable growth.”

May River Capital invests from $10 million to $40 million of equity in companies with revenues of at least $15 million and EBITDA between $3 million and $15 million. Sectors of interest include manufacturing, commercial services, supply chain and value-added distribution. Control investments are preferred but the firm will consider significant minority investments. May River was founded in January 2012 by Chip Grace, Dan Barlow and Steve Griesemer and is headquartered in Chicago (www.mayrivercapital.com).

© 2017 Private Equity Professional | February 21, 2017

Club Buy of Blue Nile Closes

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An investor group comprised of Bain Capital Private Equity, Bow Street and Adama Partners has completed the take private acquisition of online jeweler Blue Nile.

Blue Nile sells engagement rings, wedding rings, and other fine jewelry and also provides educational materials and online tools that allow consumers to be in greater control and better understand the jewelry shopping process. The company sells its products online through its website and through five company stores (“webrooms”) located in Garden City, NY; White Plains, NY; Tysons Corner, VA; Portland, OR; and Bellevue, WA. Blue Nile was founded in 1999 and is headquartered in Seattle (www.bluenile.com).

“Blue Nile is a unique business with a strong platform in an industry that is rapidly evolving and migrating online,” said Ryan Cotton, a Managing Director at Bain Capital Private Equity.  “We are excited to partner with Bow Street, as well as with Adama Partners who brings a great deal of industry experience, in order to help Blue Nile continue to lead the transformation of the customer purchase experience in engagement rings and fine jewelry.”

“Blue Nile has disrupted and transformed the way consumers shop for and purchase diamonds and fine jewelry by creating price transparency while simultaneously providing value to suppliers,” said Blue Nile Chairman, CEO and President Harvey Kanter.  “As we enter the next phase of growth, Blue Nile will continue to expand our vision and focus on putting the customer first by reaching them the way they prefer to shop whether it’s a computer, mobile device, or in one of our webrooms.”

Bain Capital Private Equity was founded in 1984 and invests in the consumer and retail; financial and business services; healthcare; industrials; and technology, media and telecommunications sectors. The firm has offices in New York and Boston (www.baincapitalprivateequity.com).

Bow Street is an investment manager that partners with institutional investors and family offices to invest opportunistically in both public and private companies. The firm was founded by Howard Shainker and Akiva Katz in 2011 and is based in New York (www.bowstreetllc.com).

Adama Partners, formerly known as Isidor, is an investor in the diamond, gemstone and jewelry industry. The company is a valued added investor through its experience with supply analytics, product sourcing, pricing, manufacturing, branding and distribution. The firm as founded by Ori Levy and Oren Schneider in 2008 and is based in New York (www.adamapartners.com).

Goldman Sachs & Co. provided debt for the transaction and BofA Merrill Lynch was the financial advisor to Blue Nile.

© 2017 Private Equity Professional | February 21, 2017