Archives for March 2, 2017

Graham Sells Tidel to Littlejohn

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Graham Partners has sold its portfolio company Tidel Engineering, a provider of cash management systems and robbery deterrent products, to Littlejohn & Co.

Tidel is a provider of smart safes that are used by customers to secure and automate their cash handling operations including validating, reconciling, storing, and dispensing cash. The company’s customers include quick-service restaurants, convenience stores, grocers, money service businesses, healthcare providers, and general retailers. Tidel is led by CEO Gary Landry and is based in the Dallas suburb of Carrollton (www.tidel.com).

Graham acquired Tidel in February 2015 and during its two-year ownership term Tidel’s EBITDA increased by over 150%. Under Graham’s ownership, Tidel brought on many new blue chip customers across a range of end markets, expanding to over 5,000 new locations.

“When we evaluated an investment in Tidel, we saw a unique opportunity with the company’s technology solution,” said Adam Piatkowski, Managing Principal at Graham Partners. “We conducted in-depth research during diligence – working closely with top industry experts – to recognize trends in cash usage and concluded that Tidel’s products were benefiting from the early stages of a long-term technological conversion towards smart safes.”

Graham Partners acquires companies with EBITDA between $5 million and $50 million and will invest in smaller companies as add-on acquisitions to existing portfolio companies. The firm is sponsored by the Graham Group, an industrial and investment concern with interests in plastics, packaging, machinery, building products and outsourced manufacturing. Graham Partners was founded in 1988 and is headquartered in Philadelphia (www.grahampartners.net).

“Smart safes offer compelling economics for all participants in the cash management ecosystem, including retailers, armored carriers and financial institutions. As such, the industry is poised for rapid growth in adoption. Given its reputation for quality and innovation, Tidel is remarkably well positioned to benefit from the ongoing growth and development of this market,” said Tony Miranda, Managing Director of Littlejohn.

Littlejohn makes control and non-control investments in middle-market companies that are undergoing a fundamental change in capital structure, strategy, operations or growth.  The firm invests from $50 million to $150 million of equity in middle market companies that have annual revenues of $100 million to $800 million.  Littlejohn invests across a range of industries and acquires manufacturers, distributors, and service providers.  The firm is currently investing from Littlejohn Fund V, LP, which has $2 billion in capital commitments.  Littlejohn is based in Greenwich, CT (www.littlejohnllc.com).

© 2017 Private Equity Professional | March 2, 2017

Highlander Buys RoadWorks

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Lund International, a portfolio company of Highlander Partners, has acquired RoadWorks Manufacturing, a maker and distributor of aftermarket accessories for the heavy truck market.

RoadWorks offers a full line of heavy truck exterior accessories, along with interior accessories such as accent strips and trim pieces. Products include stainless steel bumpers; tank saddle covers; stainless hub covers; LED lights; sleeper shock covers; license and vanity plate frames; grills; center hood trims; wiper arm covers; and cab and sleeper panels. The company was founded in 1994 and is headquartered 60 miles northwest of Indianapolis in Lafayette, IN (www.roadworksmfg.com).

Lund International is a designer, manufacturer and marketer of branded automotive aftermarket accessories for passenger cars, light trucks, and heavy trucks. Its products include vent visors, hood shields, floor mats, tonneau covers, storage boxes, and running boards, among others. Company owned brand names include Lund, AVS, Belmor, AMP Research, Rampage, Bushwacker, Roll-N-Lock, TonnoPro and Stampede. Lund is based northeast of Atlanta in Buford, GA (www.lundinternational.com).

“This acquisition, Lund’s eighth since Highlander acquired the company in 2011, reconfirms our strategy of executing complementary add-on acquisitions that enhance and expand Lund’s existing business and product offerings,” said Jeff Hull, Chairman of Lund and President and Managing Partner of Highlander. “Consistent with prior acquisitions, we plan to leverage the strength of our brands and distribution capabilities to ensure both RoadWorks and our current heavy truck brand, Belmor, reach an even broader audience and grow our presence in the heavy truck category.  We are continuing to evaluate M&A opportunities and expect to make additional acquisitions going forward.”

Highlander has stated that all operations of RoadWorks will continue to be conducted from the company’s facility in Lafayette and that its employees will join the Lund International team.

“We believe that Lund is a perfect fit for our business and look forward to contributing to its continued success,” said Susan Linson, RoadWorks’ Owner and CEO. “Lund’s broad reach into the major automotive markets, including its current presence in the heavy truck segment, will help to enhance RoadWorks’ position in the marketplace and presents us with access to significant new channels for growth.”

Highlander Partners makes investments in middle market businesses in targeted industries in which the principals of the firm have significant operating and investing experience. Sectors of interest include healthcare, basic manufacturing, food, and building materials. The firm has over $1.2 billion in capital under management and is based in Dallas (www.highlander-partners.com).

Fifth Third Securities was the financial advisor to RoadWorks on this transaction.

© 2017 Private Equity Professional | March 2, 2017

Sentinel Acquires cabi

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Sentinel Capital Partners has acquired cabi, a direct sales marketer of designer ready-to-wear women’s apparel, from Irving Place Capital and J.H. Whitney & Co. which had acquired the company from its  founding investors in 2012.

cabi, also known as Carol Anderson by invitation, is one of the largest social-selling apparel companies. The company sells affordably-priced designer clothing through a network of approximately 3,500 independent stylists who conduct private shows in the homes of more than 78,000 hostesses. cabi is led by CEO Lynne Coté who joined the company in July of 2013. The company was founded in 2002 by clothing designer Carol Anderson and 11 other investors and is headquartered in Los Angeles (www.cabionline.com).

“We are very excited about our investment in cabi,” said Jim Coady, a Partner at Sentinel. “Its unique business model has a demonstrated ability and consistent record of generating strong growth, and cabi’s value proposition to its network of stylists, hostesses, and clients is one of the most compelling we have seen.”

Sentinel Capital Partners invests in management buyouts, recapitalizations, corporate divestitures, and going-private transactions of businesses with EBITDAs up to $65 million. Sentinel targets eight industry sectors: aerospace & defense, business services, consumer, distribution, food & restaurants, franchising, healthcare services, and industrials. Sentinel Capital Partners is headquartered in New York (www.sentinelpartners.com).

“As consumer behavior shifts away from traditional retail environments, we feel that cabi is revolutionizing the shopping experience for women,” said Ms. Coté. “Our entrepreneurial culture, growing base of highly-trained, committed, and close-knit stylists, and distinctive home show experience are the foundation of our value proposition. Our partnership with Sentinel will help drive cabi’s next level of growth.”

Irving Place invests in buyouts, recapitalizations and growth capital opportunities. The firm focuses on making control or entrepreneur-driven investments. Since its formation in 1997, Irving Place Capital has been an investor in 60 companies and manages over $4 billion, including its current $2.7 billion institutional fund. The firm is based in New York (www.irvingplacecapital.com).

J.H. Whitney invests in small and middle market companies that are active in the consumer, healthcare, specialty manufacturing, and business services sectors. The firm was founded in 1946 and is based in New Canaan, CT (www.whitney.com).

© 2017 Private Equity Professional | March 2, 2017

Quad-C Closes Sale of Curvature

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Quad-C Management has sold its portfolio company Curvature, a provider of IT services and a seller of new and used network hardware, to Systems Maintenance Services (SMS), a portfolio company of Partners Group. Partners Group acquired SMS from Thomas H. Lee Partners in August 2016.

Quad-C invested in Network Hardware Resale in November 2012. The company’s name was changed in July 2014 to Curvature to convey a more all-inclusive sales model aside from third-party hardware sales. In November 2014, Curvature acquired third-party maintenance and support services provider CSU Industries.  Today, Curvature procures, maintains and upgrades IT equipment and provides support services to multi-vendor networks and data centers. The company has more than 10,000 customers, including some of the largest telecommunications carriers and top financial services firms. Curvature is led by its CEO Mike Sheldon and is headquartered in Santa Barbara (www.curvature.com).

“Over the course of our partnership with Quad-C, Curvature has transformed from a networking equipment vendor to a balanced IT services company,” said Mr. Sheldon. “Quad-C supported us throughout this process as we diversified our hardware offering, expanded into third-party maintenance and managed services, opened offices in Japan and India and completed the company’s first acquisition.”

Quad-C invests from $35 million to $125 million of equity in companies with enterprise values of $75 million to $400 million. Sectors of interest include business services, consumer, general industrial, healthcare, specialty distribution and transportation and logistics. The firm was founded in 1989 and is headquartered in Charlottesville (www.quadcmanagement.com).

“We feel extremely fortunate to have partnered with Mike Sheldon and his team over the past four years,” said Steve Burns, Managing Partner at Quad-C. “We are proud of what the company was able to accomplish with the significant investments in new business lines, people, service infrastructure and geographic span under our ownership and pleased to complete another successful owner-operator recap.”

SMS is a provider of IT hardware infrastructure and support services through more than 100 service centers across North America, Europe and Asia-Pacific, covering equipment from all the major IT original equipment manufacturers. In 2015, SMS had revenues of approximately $245 million. The company has approximately 900 engineers on its staff and is headquartered in Charlotte (www.sysmaint.com).

Partners Group is a global private markets investment management firm with over $40 billion of assets under management in private equity, private real estate, private infrastructure and private debt. The firm is headquartered in Zug, Switzerland, and has over 700 employees across 18 offices around the globe (www.partnersgroup.com).

© 2017 Private Equity Professional | March 2, 2017