Archives for March 21, 2017

Marlin Has Quick Close

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Marlin Equity Partners has held first and final closings of Marlin Equity V, LP with $2.5 billion of capital commitments, and Marlin Heritage II, LP with $750 million of capital commitments. Both of the new funds were oversubscribed and closed at their hard caps and surpassed their respective targets of $2.0 billion and $500 million in less than five months. The combined $3.25 billion of new capital marks the largest pool of capital raised by the firm since it was established in 2005.

“The successful closings of Fund V and Heritage II allow us to further capitalize on the investment opportunities we are currently seeing in the middle and lower middle markets, and clearly reflect the strength of our differentiated approach to growing and transforming businesses through operational best practices,” said David McGovern, the Managing Partner of Marlin. “We are proud to have built a successful global organization that is supported by a top-notch institutional investor base of long-standing existing and new limited partners, and a talented team of professionals with deep domain expertise across our core industries.”

Marlin invests in businesses that have revenues of $10 million to $2 billion and uses an operationally-focused investment strategy to create value. Specific sectors of interest include software, technology, healthcare IT, business services and industrial technology. Fund V will target investments in middle market companies in North America and Europe, and Heritage II will target investments in lower middle market companies in North America. Marlin is headquartered in Los Angeles with an additional office in London (www.marlinequity.com).

“We are extremely grateful for the overwhelming support from our limited partners throughout an accelerated and oversubscribed fundraising process.  We believe our operationally-focused investment approach gives us the ability to consistently navigate all economic cycles and resonates well among investors amidst a highly competitive market,” said Peter Spasov, a Partner of Marlin.

In July 2016 Marlin held a first and final closing of Marlin Heritage Europe, LP with €325 million of total capital commitments.  The establishment of the Heritage Europe Fund was a natural progression for Marlin since the firm has been investing in European businesses since 2006 and opened a London office in January 2013. This fund was exclusively offered to existing investors in Marlin’s lower middle market focused Heritage Fund platform and closed at its hard cap in just over two months and closed above its initial €200 million target. In total, Marlin has now closed eight private equity funds since its inception in 2005 and has more than $6.7 billion of capital under management.

Credit Suisse Securities (USA) was Marlin’s advisor and exclusive placement agent in the formation of Fund V and Heritage II. Bruce Ettelson, Karin Orsic and Katie St. Peters of Kirkland & Ellis served as legal counsel.

© 2017 Private Equity Professional | March 21, 2017

Parthenon Building in FinTech

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Parthenon Capital Partners and M2 Group Holdings have partnered with John Moody, the Co-founder and former President of Matrix Financial Solutions, to acquire and build a new financial technology services company in the retirement plan, bank trust and wealth management sectors.

Mr. Moody has more than 30 years of experience with financial services companies and he founded and built Matrix into one of the leading custodian and mutual fund trading providers in the industry. In 2011, Matrix was sold to Broadridge Financial Solutions (NYSE: BR) and Mr. Moody remained with the company until exiting it earlier this year. “The opportunity to continue to drive innovation in technology enabled administration has never been better given the changing regulatory framework,” said Mr. Moody. “Moreover, we are pursuing this opportunity at a time of critical importance for Americans to invest and save in smarter and more cost efficient ways.”

Parthenon invests in middle market companies with enterprise values of $35 million to $500 million that are active in financial services, healthcare services and business services. The firm was founded in 1998 and has 23 investment professionals. Parthenon has offices in Boston and San Francisco (www.parthenoncapitalpartners.com).

“This partnership complements Parthenon’s longstanding industry effort in asset management technology,” said Brian Golson, Managing Partner and Co-CEO of Parthenon Capital. “After 10 years of looking for ways to work together, we’re pleased to have the opportunity to collaborate with John. He’s a talented and experienced leader with an outstanding vision for the sector.”

Parthenon is joined in this investment by M2, a newly formed operating company focused on financial services. The principals of M2 and Parthenon have worked together for more than 10 years.

© 2017 Private Equity Professional | March 21, 2017

Argosy Acquires Marox

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Sussex Wire, a portfolio company of Argosy Private Equity since May 2012, has acquired Marox Corporation. Marox’s entire management team will remain with the business post-closing.

Marox is a CNC manufacturer of a variety of medical components and assemblies, and aerospace components and fasteners, including spinal implants, pins, screws, plates and instruments. The company can provide prototyping as well as full-scale production of parts made from titanium, PEEK (an engineered plastic that can be used for implantable devices), stainless steel, cobalt chrome, aluminum, and other synthetic polymers. The company was founded in 1951 and has a 46,000 sq. ft. manufacturing facility in Holyoke, MA (www.marox.com)

Sussex Wire utilizes cold forming and roll-forming processes to manufacture highly engineered, micro-miniature precision metal and specialty alloy components that are used in the medical device, healthcare consumables, aerospace, defense, consumer electronics, semi-conductor and hermetic assembly market sectors. The company’s manufacturing techniques allow it to shape metal wire and special alloys at room temperatures which is more cost-effective than traditional machining, stamping, metal injection molding and casting methods. Sussex Wire was founded in 1973 and is based in Easton, PA (www.sussexwire.com).

“The combination of Sussex Wire and Marox brings together two great companies with long histories of success,” said Jack Nugent, a Partner at Argosy Private Equity. “Together, Sussex Wire and Marox will have increased manufacturing capabilities and more engineering horsepower to solve our customer’s most difficult challenges.”

Argosy invests from $5 million to $15 million in lower middle market companies that have revenues of $10 million to $100 million and EBITDA margins of 10% or greater.  Sectors of interest include manufacturing, business services, and value-added distribution.  The firm was founded in 1990 and is headquartered in the Philadelphia suburb of Wayne, PA (www.argosycapital.com).

“We’re excited by what the unique benefits of having CNC machining and cold forming capabilities under one roof will bring to MAROX and Sussex Wire’s customers,” said Tim Kardish, the CEO of Sussex Wire. “MAROX and Sussex Wire are complementary organizations with shared value propositions of proactive customer service, engineering innovation and state of the art manufacturing technology.”

© 2017 Private Equity Professional | March 21, 2017

Carlyle Buys Arctic Glacier from H.I.G.

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The Carlyle Group has acquired Arctic Glacier Group Holdings from H.I.G. Capital. This transaction was completed by Carlyle through Carlyle Global Partners, its long-duration investment fund that can own assets over a longer time horizon than traditional private equity funds.

Arctic Glacier is a producer, marketer and distributor of packaged ice to consumers in Canada and the United States, primarily under the brand name of Arctic Glacier Premium Ice. The company operates 46 production plants and 52 distribution facilities across Canada and the northeastern, central and western United States servicing more than 75,000 retail accounts. Arctic Glacier also licenses its trade names and technology to independently owned companies in Canada and the United States under franchise and license agreements. The company is led by CEO Fred Smagorinsky and is based in Winnipeg, Manitoba (www.arcticglacierinc.com).

H.I.G. Capital acquired Arctic Glacier in June 2012 through a court-supervised recapitalization of the business. “H.I.G. Capital has fully supported the execution of our strategy and made significant investments in our business over the course of its ownership. Our management team is excited to begin the next phase of our growth trajectory by partnering with The Carlyle Group,” said Mr. Smagorinsky. “Carlyle’s long-term investment vision, supportive resources and collaborative approach will be tremendous assets for Arctic Glacier as we pursue our mission of becoming the top packaged ice company in North America.”

“Arctic Glacier is a great fit for Carlyle Global Partners due to its leading market positions, strong customer relationships and outstanding management team,” said Tyler Zachem, Managing Director and Co-head of Carlyle Global Partners. “We look forward to partnering with the Arctic Glacier team to support the company’s growth strategy.” Arctic Glacier is the fifth investment for Carlyle Global Partners which closed in 2014 with $3.6 billion of capital commitments.

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).

H.I.G. specializes in providing capital to small and medium-sized companies and invests in management-led buyouts and recapitalizations of manufacturing or service businesses. H.I.G. has more than $20 billion of capital under management. The firm was founded in 1993 and is based in Miami with additional offices in Atlanta, Boston, Chicago, Dallas, New York, San Francisco, London, Hamburg, Madrid, Milan, Paris, and Rio de Janeiro (www.higcapital.com).

The Carlyle Group was advised by Credit Suisse and Ernst & Young. H.I.G. was advised by Piper Jaffray.

© 2017 Private Equity Professional | March 21, 2017