Archives for April 2017

PNC Mezz Invests in Pizza Chain

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PNC Mezzanine Capital has made a $10.5 million subordinated debt investment to support growth initiatives of Grimaldi’s Pizzeria. The new capital will be used to open locations in new and existing markets, both domestically and internationally.

Grimaldi’s Pizzeria is an American pizzeria chain that is renowned for its coal-fired brick oven cooked pizzas. Grimaldi’s does not sell slices, only whole pies, and also sells calzones, salads and house-made cheesecakes. Since its founding in 1990, Grimaldi’s has expanded from its original, historic location under the Brooklyn Bridge, to nearly 50 locations in 14 states. The company is headquartered in Scottsdale, AZ (www.grimaldispizzeria.com).

Grimaldi’s was founded by Patsy Grimaldi in 1990 and Frank Ciolli, one of the first customers at the Brooklyn restaurant, purchased the Grimaldi’s Pizza name for $500,000 in 1998.

“We enjoyed working with PNC throughout the diligence process and are excited to leverage their investment experience to assist us in growing our company,” said Joe Ciolli, CEO of Grimaldi’s Pizzeria and the son of Frank Ciolli.

PNC Mezzanine was founded in 1989 and has made 151 investments in 83 companies, in support of 283 transactions. Sectors of interest include niche manufacturing, value added distribution, business services, and consumer services. Investments will typically take the form of second lien debt, subordinated debt or subordinated debt with warrants, and preferred stock with a dividend. Equity investments will be considered in conjunction with a mezzanine investment. The group is based in Pittsburgh (www.pncmezzanine.com).

Grimaldi’s Pizzeria has yet to open restaurant anywhere in Pennsylvania. Perhaps that will change soon.

© 2017 Private Equity Professional | April 28, 2017

CVC Acquires Swiss Watchmaker Breitling

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CVC Capital Partners has agreed to acquire an 80% stake in Breitling SA, a family-owned manufacturer of Swiss luxury watches and an internationally renowned premium brand. The transaction values the company at approximately €800 million or $873 million. Théodore Schneider, the company’s current owner, will re-invest capital from the transaction and he will own a 20% equity stake in the company.

Breitling specializes in the development and manufacture of high-performance watches that are sold worldwide in exclusive boutiques and via selected retailers. The company employs approximately 900 people and operates two Swiss manufacturing facilities, one in Grenchen (headquarters) and one in La Chaux-de-Fonds (www.breitling.com).

The company was founded by Leon Breitling in the Swiss Jura Mountains in 1884 and today Breitling is one of the last sizeable Swiss watch labels still owned by a family after a wave of consolidation from the 1990s led to the emergence of leaders Swatch Group, Richemont and LVMH. Breitling had revenues of approximately $423 million in 2016.

“Using our network and expertise, CVC will work to make this global, iconic brand even more renowned and help shape the future of one of Switzerland’s last independent watch manufacturers,” said Daniel Pindur, Senior Managing Director at CVC. “Specifically, we see significant growth potential for Breitling in both existing and new geographies by driving the digitization of the marketing and distribution channels in the company, helping to enrich the product and customer experience.”

“I am convinced CVC is the right partner to elevate Breitling to the next level,” said Mr. Schneider. “CVC’s expertise, track-record and international network will help unlock Breitling’s full potential.”

CVC Capital Partners currently manages over $50 billion of assets and funds managed or advised by CVC are invested in 52 companies worldwide. The firm, founded in 1981, is based in London and has a network of 24 offices and 340 employees throughout Europe, Asia and the United States (www.cvc.com).

“Breitling has a proud heritage, high brand awareness, and enjoys an excellent reputation as one of the finest watchmakers in the world,” said Alexander Dibelius, Managing Partner and Head of Germany at CVC. “We very much look forward to working with Théodore Schneider as we embark on Breitling’s next chapter of growth.”

The acquisition of Breitling will be made through CVC’s sixth fund, CVC Capital Partners VI, which closed with €10.5 of capital in 2013.

This transaction is expected to close by the end of June 2017.

© 2017 Private Equity Professional | April 28, 2017

Levine Leichtman Buys Ugly Houses

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Levine Leichtman Capital Partners (LLCP) has acquired HomeVestors of America from Franchise Brands LLC. HomeVestors’ senior management team partnered with LLCP on this transaction.

HomeVestors of America is a privately owned real estate company that sells We Buy Ugly Houses franchises to investors. The franchisees provide real estate services by buying homes in need of repair and homes that owners need to sell more quickly than usually can be done through a realtor. Typically, HomeVestors franchisees then renovate and sell or rent them, and franchisees hold the homes they purchase for six months on average.  The company has approximately 800 franchisees purchasing approximately 8,000 homes annually in 120 markets throughout the United States.

HomeVestors was founded in 1996 and is led by Co-President David Hicks. The company is headquartered in Dallas (www.homevestors.com). “We are excited to partner with David Hicks and the rest of the management team who have successfully led the growth of HomeVestors and solidified its position as the leading franchisor of real estate investment services,” said Lauren Leichtman, Co-Founder and CEO of LLCP. “We look forward to working with management as they continue to expand the franchise across the country.”

Levine Leichtman manages approximately $7 billion of capital through private equity partnerships, distressed debt and leveraged loan funds. The firm is based in Los Angeles with offices in Chicago, Dallas, New York, London and The Hague (www.llcp.com).

“I am delighted to partner with LLCP as HomeVestors seeks to advance in its next stage of growth. LLCP’s resources and experience as a leading franchise investor will be critical in the continued development of the company and I look forward to leveraging LLCP’s strategic and financial expertise,” said Mr. Hicks.

The investment in HomeVestors will be made out of Levine Leichtman Capital Partners Private Capital Solutions, LP.

© 2017 Private Equity Professional | April 28, 2017

L2 Buys Online Rug Seller

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L2 Capital has completed the acquisition of Winchester Carpet and Rugs, an online retailer of area rugs.

Winchester Carpet and Rugs is an online specialty retailer of area rugs and other complementary home décor items. The company has more than 180,000 SKUs and generates annual page views in excess of 46 million from consumers and professional interior designers throughout North America. Rugs Direct has approximately twenty-five employees and is headquartered near Washington, DC in Winchester, VA (www.Rugs-Direct.com).

“L2 Capital is a terrific partner for Rugs Direct due to their in-house operational and e-commerce expertise, as well as their external consumer product and direct-to-consumer marketing resources,” said David Craig, Co-Owner of Rugs Direct.

L2 Capital Partners is a lower middle market private equity family office that makes control and minority investments in companies that have revenues from $10 million to $75 million and EBITDA from $2 million to $8 million. Sectors of interest include technology enabled services; business services; e-commerce/direct marketing; consumer products; manufacturing; and environmental products. L2 Capital is headquartered in the Philadelphia suburb of Radnor, PA (www.L2Capital.net).

“We are very excited to be able to support such a successful company and group of managers,” said Bob Levine, Managing Partner of L2 Capital. “Together, with the assistance of the world-class board of directors we’ve assembled, we’re optimistic we’ll be able to build upon the company’s current growth trajectory.”

“This partnership places Rugs Direct in an outstanding position for growth and continued leadership in the home-décor market,” added Randy Kremer, Rugs Direct’s other Co-Owner. “We’ve learned a lot and have been very successful in our first 20 years of e-commerce. In partnership with L2, the sky’s the limit.”

Columbus, OH-based Oxer Mezzanine Partners (www.oxercapital.com) and Charlotte, NC-based Salem Investment Partners (www.salemip.com) provided debt financing and co-invested in the transaction.

Phoenix-based Dinan Capital Advisors (www.dinancompany.com) was the financial advisor to Rugs Direct.

© 2017 Private Equity Professional | April 28, 2017

Encore Exits Thanasi Foods

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Encore Consumer Capital has completed the sale of Thanasi Foods, marketer of the Duke’s and BIGS snack brands, to Conagra Brands. Encore invested as a minority partner in Thanasi Foods in 2015 to provide liquidity to some of the company’s early investors.

Thanasi Foods is a considered to be an innovator in the snacking sector and sells flavored sunflower and pumpkin seed products under the “BIGS” brand and smoked meat snacks under the
“Duke’s” brand. Duke’s Smoked Meats is a maker of premium meat snacks, including Duke’s, Smoked Shorty Sausages and Duke’s Brisket & Steak Strips. The brand produces its smoked meat products in small batches using whole ingredients, fresh never-frozen pork and chicken, 100% grass-fed beef, and authentic hardwood smoke pairings (www.dukesmeats.com). BIGS Seeds produces a line of premium, USA-grown seed snacks, including jumbo, fire-roasted in-shell sunflower seeds, sunflower seed kernels, and homestyle-roasted pumpkin seeds (www.BIGS.com). Thanasi Foods was founded in 2003 by Justin ‘Duke’ Havlick and is based in Boulder, CO (www.thanasifoods.com).

“Thanasi Foods’ founder and CEO Justin ‘Duke’ Havlick decided to bring on a strategic and financial partner in 2015 and we are honored that he chose Encore to help the company grow,” said Robert Brown, Managing Director of Encore Consumer Capital. “We could not be more proud of what he and the team have accomplished in building two premier brands in protein-based snacking – Duke’s smoked meat snacks and BIGS seeds.”

Encore Consumer Capital invests exclusively in consumer products companies that have revenues between $10 million and $100 million and where it can utilize its own consumer experience and the expertise of its operating partners at Encore Associates, a strategic advisory firm to the consumer products industry. The firm has raised nearly $600 million in equity capital and invested in 25 platform companies.  Encore was founded in 2005 and is headquartered in San Francisco (www.encoreconsumercapital.com).

“Encore provided strategic guidance to and unwavering confidence in our team to help us execute our vision,” said Mr. Havlick. “What started 13 years ago as a simple passion for fire roasting seeds and slow smoking meats, has grown into two terrific brands that are recognized in households across the US. This is an incredibly exciting time for our brands and our team, and we are looking forward to working with the Conagra Brands team on the next chapter in our journey to take Duke’s and BIGS to another level.”

Conagra Brands (NYSE: CAG) is one of North America’s leading branded food companies. Company owned brand names include Marie Callender’s, Reddi-wip, Hunt’s, Healthy Choice, Slim Jim and Orville Redenbacher’s. The company is headquartered in Chicago (www.conagrabrands.com).

Houlihan Lokey provided strategic and financial advisory services to Thanasi Foods.

© 2017 Private Equity Professional | April 27, 2017

IGP Buys Royal Die & Stamping

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Industrial Growth Partners has acquired Royal Die & Stamping in partnership with the company’s management team.

Royal Die & Stamping (RDS) is a supplier of high-precision electrical connectivity components used in automotive, electrical, life safety and telecommunications applications. Using complex metal alloys the company designs and manufactures battery terminals, eyelet terminals, fuse components, lead frames, and other electrical connectivity-focused products.

RDS was founded in 1938 by Ole Jensen and originally produced metal stampings used in radio and television sets. The company is headquartered in the Chicago suburb of Carol Stream (www.royaldie.com).

According to Industrial Growth Partners (IGP), the company is poised to benefit from secular trends driving more electrical content in automobiles, which have enabled RDS to outperform its core end markets over the past decade. The transaction creates a platform for RDS to accelerate growth in the global automotive market, expand into adjacent markets and pursue selective global acquisition opportunities.

“IGP’s deep experience in the manufacturing sector and over twenty years of experience in helping family-owned businesses like Royal successfully transition to becoming private equity-backed made the firm an ideal equity partner for us,” said Erik Freitag, President of RDS. “We look forward to leveraging the firm’s expertise to strengthen our position in our core markets and to help expand our business globally and into new markets.”

Industrial Growth Partners invests in North American-based manufacturing and manufacturing services companies that have histories of profitability and revenues of up to $250 million. Sectors of specific interest include industrial components and equipment; electronic equipment; process instrumentation and controls; analytical instruments; fluid control, filtration and pumps; specialty chemicals; energy equipment and services; plastics and synthetic materials; healthcare and safety equipment; manufacturing services and testing; and aerospace and defense components. IGP was founded in 1997 and is based in San Francisco (www.igpequity.com).

The buy of Royal Die & Stamping is the fourth platform investment for IGP’s fifth fund.

© 2017 Private Equity Professional | April 27, 2017

Corinthian Buys Eastern Wholesale Fence

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Corinthian Capital has acquired Eastern Wholesale Fence Co., a manufacturer and distributor of residential and commercial fence products.

Eastern Wholesale Fence (EWF) supplies a full line of wood, vinyl, and chain-link fences; aluminum and steel ornamental products; welded mesh, guide rail, and post and rail fences. Company owned brand names include EverStrong, Grand Illusions, System21, Eastern White Cedar, Eastern Ornamental, and Eastern Chain-Link. EWF was founded in 1971 by Peter Williams, Sr. and is headquartered on Long Island in Medford, NY (www.easternfence.com). Post-closing, Peter Williams, Jr. remains as Eastern’s CEO and he has a meaningful ownership stake in the business. Peter Williams, Sr. has retired from the day-to-day operations of the company.

“We are excited to be backing a strong, well-established management team at Eastern Fence, led by long-time CEO Peter Williams, Jr.,” said C. Kenneth Clay, Executive Managing Director of Corinthian Capital.

Corinthian Capital targets investments in North America-based niche market leaders in the manufacturing, distribution, service and consumer products segments that have revenues between $50 million and $250 million and EBITDA between $10 million and $30 million. The firm was founded in 2005 and is based in New York with an additional office in Boston (www.corinthiancap.com).

The DAK Group was the exclusive investment banker and financial advisor to EWF, initiating and managing the transaction. The DAK Group team included President Alan Scharfstein, Managing Director Steve Raymond, and Director Ari Fuchs. “With this transaction Eastern Wholesale Fence’s founders have been able to monetize the exceptional business that they have built, while gaining a strategic partner to help them accelerate their industry leadership position,” said Mr. Scharfstein. The DAK Group is headquartered in Rochelle Park, NJ with additional offices in New York and Philadelphia (www.dakgroup.com).

© 2017 Private Equity Professional | April 27, 2017

Windjammer Buys Vital Records

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Windjammer Capital Investors has acquired Vital Records Control in partnership with CEO Danny Palo and other members of the company’s senior management team.

Vital Records Control (VRC) provides information management services including offsite records storage, open-file records storage, climate controlled storage, release of information services (on-site or off-site), vaulting services for media backups, electronic vaulting, destruction services including mobile shredding, imaging services including microfilming, records inventorying/indexing services, and packing services on-site at the customer’s location.

VRC services hundreds of Fortune 500 companies and thousands of regional, state, and local companies throughout the country with a concentration in the southeastern US. The company, founded in 1988, is headquartered in Memphis (www.vitalrecordscontrol.com).

“VRC’s management team built a well-respected business in its markets which has grown steadily over the past 25 years,” said Jeff Miehe, Managing Director at Windjammer. “VRC’s high levels of customer service and its leading technology platform have enabled it to develop leading positions in mid-size markets throughout the Southeast.  We are extremely excited about the opportunity to partner with CEO Danny Palo and VRC’s management team.”

Windjammer makes control investments of $50 million to $200 million in middle market businesses with EBITDAs from $10 million to $50 million. Sectors of interest include niche manufacturing, value-added distribution and business services.  Windjammer is currently investing from its $726 million Windjammer Senior Equity Fund IV, which closed in March of 2013.  The firm was founded in 1990 and is based in Newport Beach, CA and Waltham, MA (www.windjammercapital.com).

VRC is the seventh platform investment in Windjammer’s Senior Equity Fund IV.  The firm is actively seeking add-on acquisitions for VRC in the document storage, shredding, and imaging sectors.

“We’re enthusiastic about our new partnership with Windjammer and their support of our customer-focused approach to the market,” said Mr. Palo. “We look forward to leveraging Windjammer’s resources to help accelerate our growth into new and adjacent markets, strengthen our position in existing markets, and provide our customers with additional services related to their information governance needs.  Windjammer’s operational and strategic resources will be extremely valuable as we embark on the next phase of growth for our company.”

© 2017 Private Equity Professional | April 27, 2017

Insight Buys Soup Biz from TreeHouse

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TreeHouse Foods has entered into an agreement to sell its Soup and Infant Feeding business to Riverbend Foods, a newly formed platform company of Insight Equity. The transaction is expected to close in the second or third quarter of 2017.

The Soup and Infant Feeding (SIF) business is a maker of private label condensed and ready-to-serve soup, baby food and gravy packaged in cans, glass jars and Tetra Recart formats (Tetra Recart is a type of packaging shaped as a rectangular cube that takes up to 40% less space than cans and glass jars). Total revenues of the business were approximately $210 million in 2016. SIF is based in Pittsburgh.

TreeHouse Foods acquired the SIF business and its Pittsburgh facility from Del Monte Foods in 2006. Approximately 400 hourly and 60 salaried employees will transition from TreeHouse Foods to Riverbend. TreeHouse Foods will retain its Tetra aseptic carton business, which includes broth and other products that are produced in another location.

“The acquisition of Soup and Infant Feeding presents a unique opportunity to acquire a food manufacturing platform with numerous attractive growth opportunities,” said Jack Waterstreet, Partner at Insight Equity. “We believe the business has opportunities in its existing categories as well as attractive adjacent categories, and we are delighted to welcome the Soup and Infant Feeding business to our portfolio.”

Insight Equity makes control investments in middle market, asset intensive companies across a range of industries and specializes in partnering with companies in complex and challenging situations, including corporate divestitures, aggressive growth opportunities, restructurings, and transitions from private family ownership.  The firm is based near Dallas in Southlake, TX and also has an office in New York (www.insightequity.com).

TreeHouse Foods (NYSE: THS) is a manufacturer of packaged foods and beverages with more than 50 manufacturing facilities across the United States, Canada, and Italy that focuses primarily on private label products for both retail grocery and food away from home customers. The company had revenues in 2016 of $6.2 billion and is headquartered in Oak Brook, IL (www.treehousefoods.com).

Harris Williams & Co. served as the financial advisor to TreeHouse Foods.

© 2017 Private Equity Professional | April 26, 2017

CIVC Adds-on with Masterpiece Buy

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Magnate Worldwide, a portfolio company of CIVC Partners and Magnate Capital Partners, has acquired Masterpiece International.

Masterpiece International provides customs brokerage and international logistics services through 15 offices located in major international shipping hubs throughout the US. Masterpiece was founded in 1989 and has developed a leading market position in fine arts logistics, serving museums, art galleries, art fairs and private collectors. The company also has a separate general freight division which offers a variety of services including reconciliation, customs brokerage, as well as cargo and freight logistics for vehicles, boats, textiles, crude oil, tradeshows, and perishables.

Masterpiece International is headquartered in New York (www.masterpieceintl.com) with additional facilities in Boston; Newport; JFK Airport; Philadelphia; Washington, DC; Atlanta; Miami; Chicago; Dallas; Houston; Seattle; San Francisco; Los Angeles; Gulf Port, MS; and West Palm Beach.

Magnate Worldwide was formed in December 2014 by CIVC and Magnate Capital Partners to build an asset-light transportation and logistics company focused on the North American premium transportation and international freight forwarding markets. Today, as a result of numerous acquisitions, Magnate Worldwide operates through four subsidiaries: (1) TrumpCard (acquired in August 2015) provides specialized logistics services, including deferred and time-definite airfreight, next day air, and other domestic and international expedited services; (2) Premium Transportation Logistics (acquired in March 2017) provides expedited domestic ground and freight brokerage services for customers with time-critical logistics needs; (3) MWW Logistics provides expedited cross-border services into and out of Mexico; and (4) Somerset Marine Lines (acquired in October 2015) provides international air and ocean freight forwarding services. The company is headquartered in the Chicago suburb of Oakbrook (www.magnateworldwide.com) (www.trumpcardinc.com) (www.ptlllc.com) (www.somersetmarine.com).

“Masterpiece expands Magnate Worldwide’s international freight forwarding network and complements our existing suite of high-value logistics services. We are now better positioned than ever to meet the full range of our customers’ door-to-door international and domestic logistics needs,” said Thomas Gilgen, President of Magnate Worldwide’s international division.

The entire Masterpiece team – including co-founders David Epstein and David Cohen and President of Fine Arts John O’Halloran – will remain in place following the transaction and will continue with the company post-closing. “We are thrilled to be joining Magnate Worldwide,” said Mr. Epstein. “Magnate’s focus on best-in-class service ensures that we will continue to exceed customer expectations, and its broad logistics offering will allow us to provide an even more comprehensive range of solutions to our valued customers.”

CIVC 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).

Magnate Capital Partners is led by its CEO and Founder Daniel Para and is based in Oakbrook Terrace, IL (www.magnatecp.com).

Magnate Worldwide continues to seek additional add-on acquisitions of companies that operate in the North American premium transportation and international freight forwarding markets. Contact either Daniel Para ([email protected]) or Mike Welch ([email protected]).

© 2017 Private Equity Professional | April 26, 2017

Oaktree Exits AdvancePierre Foods

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Tyson Foods has agreed to acquire AdvancePierre Foods, a portfolio company of Oaktree Capital Management, for a total enterprise value of $4.2 billion, including $3.2 billion of equity value and $1.1 billion of assumed AdvancePierre debt.

Oaktree acquired Pierre Foods out of bankruptcy during the 2008 recession and two years later merged it with Oklahoma-based Advance Foods and its sister company Advance Brands to form AdvancePierre. In July 2016, the company was taken public by Oaktree. Funds affiliated with Oaktree still own approximately 42 percent of the outstanding shares of AdvancePierre common stock.

AdvancePierre Foods (NYSE: APFH) is a national producer and distributor of value-added, convenient, ready-to-eat sandwiches, sandwich components and other entrées and snacks to foodservice, retail and convenience store providers. The company offers a broad line of products across all day parts including: ready-to-eat sandwiches, such as breakfast sandwiches, peanut butter and jelly sandwiches and hamburgers; sandwich components, such as fully cooked hamburger and chicken patties, and Philly steaks; and other entrées and snacks, such as country-fried steak, stuffed entrées, chicken tenders and cinnamon dough bites.

AdvancePierre Foods had revenues of $1.6 billion in 2016 and has more than 4,500 employees. AdvancePierre is led by President and CEO Christopher Sliva and is headquartered in Cincinnati (www.advancepierre.com).

Tyson Foods is one of the world’s largest food companies with leading brands such as Tyson®, Jimmy Dean®, Hillshire Farm®, Sara Lee®,  Ball Park®, Wright®, Aidells® and State Fair®. It’s a recognized market leader in chicken, beef and pork as well as prepared foods, including bacon, breakfast sausage, turkey, lunchmeat, hot dogs, pizza crusts and toppings, tortillas and desserts. The company supplies retail and foodservice customers throughout the United States and approximately 115 countries. Tyson Foods was founded in 1935 by John W. Tyson, whose family has continued to lead the business with his son, Don Tyson, guiding the company for many years and grandson, John H. Tyson, serving as the current Chairman of the Board of Directors. The company is headquartered in Springdale, AR (www.tysonfoods.com).

Yesterday, Tyson announced that it was exploring the sale of its Sara Lee® Frozen Bakery business, the Kettle business and Van’s®. These businesses produce frozen desserts, waffles, breakfast bars and soups, sauces and sides. Rothschild is acting as Tyson Foods’ financial advisor on these sales. “Tyson is always prudently evaluating opportunities to leverage our strengths to drive future growth, whether by divesting non-core, non-protein focused assets – as announced yesterday – or by acquiring companies like AdvancePierre that enhance our capabilities in growing categories.  We believe that AdvancePierre and Tyson are a natural strategic fit and together will accelerate growth for customers by delivering on-trend, high quality products consumers love,” said Tom Hayes, president and CEO of Tyson Foods.

Oaktree Capital Management makes investments in distressed debt, corporate debt (including high yield debt and senior loans), control investing, convertible securities, real estate and listed equities.  The firm has over 900 employees and $100 billion in assets under management and is headquartered in Los Angeles (www.oaktreecapital.com).

This transaction is not subject to a financing condition.  Tyson has secured committed bridge financing from Morgan Stanley Senior Funding to complete the transaction and retire the assumed debt of AdvancePierre.

Morgan Stanley & Co. is the financial advisor to Tyson and Davis Polk & Wardwell is serving as Tyson’s legal advisor.  Credit Suisse Securities (USA) and Moelis & Company are serving as financial advisors to AdvancePierre and Skadden, Arps, Slate, Meagher & Flom is serving as AdvancePierre’s legal advisor.

© 2017 Private Equity Professional | April 26, 2017

Stonebridge Acquires Cast-Crete

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Stonebridge Partners has acquired Cast-Crete USA, a maker of precast concrete products used in residential and commercial construction.

Cast-Crete USA is a manufacturer of branded precast concrete lintels, sills, scuppers (used in water control applications), and thresholds used exclusively in concrete block construction of residential and commercial buildings. Cast-Crete considers itself to be the largest manufacturer of precast lintels and sills in the nation. A lintel is a decorative or structural horizontal block that spans the space or opening between two vertical supports and is often found over portals, doors, windows and fireplaces. Cast-Crete sells its products throughout the Southeast United States. The company has been family owned and operated since founding in 1955 and is based in near Tampa in Seffner, FL (www.castcrete.com).

Stonebridge Partners invests in companies with purchase prices between $30 million and $200 million. Sectors of interest include niche manufacturing industries, including building products, infrastructure, specialty packaging and specialty manufacturing. The firm was founded in 1986 and is based in White Plains, NY. During their three decades of activity, Stonebridge has invested over $625 million of capital in 60 separate acquisitions (www.stonebridgepartners.com).

Washington Partners was the financial advisor to Cast-Crete USA on this transaction. “Washington Partners contacted us given our very successful prior deal in a similar space and thought our experience would be a great match with Cast-Crete and the management team,” said Stonebridge’s Co-Managing Partner, Michael Bruno. “From the introduction to the seller, site visits, negotiations, and throughout the closing, the entire deal team at Washington Partners provided the timely assistance we needed from them. They demonstrated a rare understanding of the relationship that occurs between the buyer and seller, especially in a complex deal like this. Washington Partners was a pleasure to deal with and we look forward to working with them again in the future.”

Washington Partners provides intermediary services such as mergers, acquisitions, divestitures, valuations, and transaction consulting for lower-middle market business owners. The firm was founded in 1999 and is based in Tampa (www.washingtonpartners.com).

© 2017 Private Equity Professional | April 26, 2017

Littlejohn Capital Buys Maysteel

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Littlejohn Capital has acquired Maysteel Industries, a maker of sheet metal enclosures, from Revolution Capital Group which acquired the company in November 2013.

Maysteel specializes in designing, engineering and manufacturing custom OEM sheet metal enclosures, electrical cabinets and metal fabricated assemblies. The company’s product are used in the alternative energy, kiosk, gaming, security, medical, utility, industrial drive and automation, and self-serve/vending machine industries. Maysteel was founded in 1936 and has a 240,000 square-foot manufacturing facility and headquarters in Allenton, WI (northwest of Milwaukee) and a 96,000 square-foot manufacturing facility in Monterrey, Mexico (www.maysteel.com).

“This is very exciting news for the company, its employees, and customers,” said Kevin Matkin, Chief Executive Officer of Maysteel.  “The Littlejohn Capital team has a long and successful track record of building industrial companies like ours.  They understand our business and share our vision of building an even stronger company and we are confident we have the right partner to support our strategic growth initiatives.”

Littlejohn Capital is the family office of Angus Littlejohn Jr., co-founder of Littlejohn & Co., where he currently serves as Chairman. The family office makes control investments of $5 million to $15 million ($30 million including co-investment partners) in transactions with $20 million to $75 million of total enterprise value. Typical targets are small to mid-sized private companies that are undergoing strategic, operational or generational transition and that have EBITDA between $2.0 million and $12.5 million. Sectors of interest include manufacturing, fabrication, processing, logistics, materials, and services. Littlejohn Capital is based in Savannah, GA (www.littlejohncapital.com).

“Maysteel and its management team has differentiated itself as a value-added supplier and we look forward to investments in the company that will leverage its metal fabrication engineering technology,” said Angus Littlejohn Jr., Founder and Chairman of Littlejohn Capital. “The company operates in a fragmented market and we look forward to expansion in its core segments as well as adjacent markets with new products.”

“Since our acquisition in 2013, Maysteel has experienced significant growth, which is a testament to our ability to partner with management teams and commit to sustained financial and operational improvements,” said Revolution Capital Group’s Founder and Managing Partner, Robert Loring Jr.

Revolution Capital Group has offices in Tampa, New York, London and Los Angeles (www.revolutionpe.com). Aman Bajaj, Managing Director, led the transaction for Revolution Capital Group.

© 2017 Private Equity Professional | April 25, 2017

Arsenal Exits Flowchem

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Arsenal Capital Partners has agreed to sell its portfolio company Flowchem to specialty chemical company KMG for $495 million. Flowchem’s adjusted EBITDA was approximately $43 million over the past twelve months resulting in a 11.5x purchase price multiple.

Flowchem, acquired by Arsenal in December 2013, is a provider of drag-reducing agents, related support services, and equipment to midstream crude oil and refined fuel pipeline operators.  The company was founded in 2001 and is based northwest of Houston in Waller, TX (www.flowchem-dra.com).

Drag-reducing agents, also known as DRAs, are specialty chemicals injected into midstream pipelines to reduce friction near the pipeline walls and within the turbulent fluid flowing through the pipeline network. By lessening fluid turbulence in pipelines, DRAs optimize pipeline flow and lower pipeline operating costs by increasing throughput capacity and reducing operating pressure.

Flowchem’s products include DRAs for light, medium or heavy crude oil, as well as DRAs engineered for refined fuel products. As the second largest DRA provider globally, Flowchem serves more than 50 pipeline operators worldwide, as well as midstream service providers and distributors.

“Flowchem has demonstrated impressive organic growth as it continues to provide unique solutions to the global oil pipeline industry. The company is strongly positioned for continued growth and the KMG platform will enable Flowchem to further support its customers and the market’s needs,” said John Televantos, Arsenal Partner and Co-Head of Arsenal’s Specialty Industrials Group.

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).

KMG is a global producer and distributor of specialty chemicals through three business segments: electronic chemicals, wood treating chemicals, and industrial lubricants. The company has annual revenues of approximately $300 million and is headquartered in Fort Worth, TX (www.kmgchemicals.com).

Capital for this acquisition, which is expected to close by mid-June 2017, is being provided to KMG by KeyBank, HSBC Bank USA, and HSBC Securities.

© 2017 Private Equity Professional | April 25, 2017

New Water Merges Kayak Companies

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KL Outdoor, maker of Sun Dolphin kayaks, and GSC Technologies, maker of Future Beach kayaks, are being combined to form a single company by New Water Capital which acquired KL Outdoor in December 2016 and GSC Technologies on April 7, 2017.

KL Outdoor manufactures kayaks, stand-up paddle boards, canoes, paddle boats, hunting blinds, sleds and portable restrooms and related accessories under the Sun Dolphin, Evoke, Extent and Third Coast (all related to the company’s watersports segment), Terrain (outdoor hunting products) and Five Peaks (portable restroom products) brands. The company, led by President Tom Harris, is based in Muskegon, MI (www.kloutdoor.com).

GSC Technologies is a designer and manufacture of kayaks and watersports equipment; storage and organization products; folding tables and chairs; utility shelving systems and cabinets; closet systems; refuse and recycling products; and a variety of other household products. GSC brands – which include Future Beach, Equinox, Patriot, Heritage, and Viper – are carried by several blue-chip mass and specialty sporting goods retailers. The company has manufacturing and distribution facilities in the US, Canada, and China and is headquartered near Montreal in Saint-Jean-sur-Richelieu, QC (www.gsctechnology.com).

“This merger will create the largest kayak company in the world,” said Mark Becker, a Partner at New Water Capital.  The merger will result in a company with increased capacity to accommodate fast growing customer demands, a broader product offering and brand portfolio, strengthened financial standing and multiple product shipping points. “The combination will create, we believe, the only vertically-integrated kayak manufacturer with rotational molding, thermoforming, and blow molding technologies as well as injection molding capabilities,” added Mr. Becker.

“Our two companies are a natural fit, with products and areas of expertise that complement one another and provide a tremendous opportunity to expand into new product lines in the rapidly growing outdoor water sports market,” said Robert Farber, GSC president.

New Water invests in lower middle market companies with revenues between $30 and $300 million.  Sectors of interest include consumer products, retail, and industrial manufacturing & services. The firm closed its first private equity fund at the hard cap of $406 million in July 2015. New Water was founded in September 2014 and is based in Boca Raton (www.newwatercap.com).

© 2017 Private Equity Professional | April 25, 2017

Validor Buys Boehm Pressed Steel

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Validor Capital has acquired Boehm Pressed Steel Company, a third generation family owned business.

Boehm Pressed Steel is a manufacturer of deep drawn metal parts and stampings that are used in the appliance, automotive, conveyer, mining, HVAC, industrial equipment, and railroad industries. The company, led by President Robert Boehm, was founded in 1918 and is based in the Cleveland suburb of Valley City, OH (www.boehmstampings.com).

Boehm Pressed Steel is a successful, multi-generational family business but did not have a family-member successor in place to operate or run the business. The shareholders of the company wanted to implement a plan for an exit strategy, while ensuring the company could operate and grow once the shareholders were no longer involved in the business. As a result, MelCap Partners (www.melcap.com), a middle market investment bank located in Medina, OH, was engaged to achieve these goals.

“MelCap kept the issues in focus to help Boehm achieve the desired end result. Through MelCap’s patience and sound advice, the shareholders were able to reach their goals through this sale process,” said Mr. Boehm.

Validor Capital makes control investments of up to $20 million in privately held US-based small to middle market manufacturing, industrial, and business services companies. Typical target companies will have revenues of $10 million to $100 million and EBITDA of up to $10 million. Validor is led by its Managing Partner Matthew Kaufman and is based in Boca Raton (www.validorcap.com).

© 2017 Private Equity Professional | April 25, 2017

Blackford Acquires Ellison Bakery

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Blackford Capital has acquired Ellison Bakery, a manufacturer of bakery products sold to the industrial market, food service industry, and retail and private label sectors.

Ellison Bakery was founded by Donald Ellis in a family garage in 1945 and supplied baked goods to restaurants and grocery stores in the Ft. Wayne area. The company grew quickly and later became the exclusive manufacturer for Archway Cookies in Indiana, Kentucky and Wisconsin. Today, Ellison bakes and sells cookies, snack bars, crunch and inclusion products (e.g., chocolate chip pieces, brownie pieces, and pie crust pieces). Ellison has over 100 employees and operates out of a 115,000 sq. ft. facility located in Fort Wayne, IN (www.ebakery.com).

This transaction also marks the retirement of Rob Ellis, who stepped down as CEO 6 years ago and had remained with Ellison as the CFO. Mr. Ellis’ sons, Jon and Jeremy Ellis, have grown the business tremendously over the past four years and will continue to be active in the business post-transaction.

“We’re excited the Ellis family decided to entrust the future of Ellison Bakery with Blackford Capital. Ellison has established itself as a premier industrial bakery and is known for its high quality and extreme flexibility in supporting a wide range of customers,” said Martin Stein, Founder and Managing Director of Blackford Capital. “The Ellis brothers had been looking for a financial partner that would help continue the legacy they had built with their father. We’re honored to play a part in Ellison’s next chapter and we look forward to investing in the business, the employees, and the community as we continue the story of growth at Ellison.”

“We’re excited to benefit from the strategic experience and capital that Blackford brings and look forward to working with the entire team to execute our aggressive plans for growth,” said Todd Wallin, President of Ellison Bakery. “The Ellis family selected Blackford Capital as partner because of its shared values, aggressive growth strategy, and commitment to developing the existing team at Ellison.”

This transaction is the ninth by Blackford’s Michigan Prosperity Fund, which invests primarily in Michigan-based companies, as well as neighboring states. Ellison Bakery represents the fund’s first acquisition outside of Michigan. Other portfolio companies in the fund include: Custom Profile (Grand Rapids), Mopec (Oak Park), Grand Transformers (Grand Haven), Burgaflex (Fenton), Dickinson Press (Grand Rapids), Grand Equipment Company (Hudsonville), Quality Aluminum Products (Hastings), and Davalor Mold Company (Chesterfield).

Blackford Capital invests in middle-market manufacturing, distribution, and service companies in both mature and growing industries. Target companies will have revenues of $20 million to $100 million and EBITDAs of $2 million to $20 million. Blackford currently has 14 portfolio companies located across the United States. The firm has offices in Grand Rapids, MI (headquarters) and Santa Monica, CA (www.blackfordcapital.com).

Generational Capital Markets (www.gencm.com) was the financial advisor to Ellison Bakery on this transaction. Debt financing was provided by Comerica Bank (www.comerica.com).

© 2017 Private Equity Professional | April 24, 2017

Petra Exits Midwest Automotive Designs

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Midwest Automotive Designs, a portfolio company of Merion Investment Partners, Petra Capital Partners and Pegasus Capital Group, has been sold to publicly-traded REV Group (NYSE: REVG). Midwest Automotive Designs specializes in second stage value-added assembly, or “up-fitting,” of luxury vans, trucks and RVs.

Midwest Automotive Designs custom-builds RV’s (recreational vehicles) and LCT bus (limousine, charter and tours) on the Mercedes-Benz Sprinter chassis and the newly introduced Dodge ProMaster chassis. The company sells its products through an independent dealer network. Since its inception in 2003, the company has grown to over 130 employees with combined manufacturing and office space of over 100,000 square feet and annual revenue of approximately $45 million.  The company is headquartered in Elkhart, IN (www.midwestautomotivedesigns.com).

“One of our key strengths is our ability to rapidly design, engineer, and commercialize new products,” said Tim Gray, President of Midwest Automotive Designs. “Our combination with REV makes all of the sense in the world. We are excited to tap into REV’s technical resources and nationwide dealership footprint.”

REV Group (formerly Allied Specialty Vehicles) was formed in 2010 by American Industrial Partners merging of four of its portfolio companies: Collins Industries (buses and ambulances), E-One (firetrucks), Halcore Group (emergency and rescue vehicles), and Fleetwood Enterprises (RVs). Numerous add-on acquisitions have been completed under AIP’s ownership and today the company has annual revenue of over $2 billion. The company went public in late 2016 under the symbol REVG (NYSE) and is headquartered in Milwaukee (www.revgroup.com).

The acquisition of Midwest Automotive Designs enhances REV’s product offerings in both its Recreation and Commercial segments through the RV and bus divisions, by adding a selection of Class B RVs and multiple products for the LCT bus markets, respectively. “The addition of top quality custom shuttle buses, limousines and executive transportation vehicles is complementary to our existing commercial vehicle line of products,” said John Walsh, President of REV’s bus division. “All of these products add to an already solid line of luxury vehicles under our Krystal and Federal brands.”

Merion, Petra and Pegasus acquired Midwest Automotive Designs in September 2014. During the investment period, the company grew revenues and EBITDA at a CAGR of 32% and 24% respectively.

Merion Investment Partners is a licensed SBIC and a provider of $4 million to $20 million of mezzanine and equity capital to lower middle market companies that have revenues greater than $10 million and EBITDA greater than $2 million.  Sectors of interest include business services, specialty manufacturing, healthcare, profitable technology companies with proven products and markets, and e-commerce. The firm was founded in 2003 and is based near Philadelphia in Wayne, PA (www.merionpartners.com).

Petra Capital Partners provides subordinated debt and preferred stock to companies for expansion, acquisition, buyout, refinancing or recapitalization.  The firm invests up to $20 million in companies that have a minimum of $10 million in revenue and positive EBITDA.  Sectors of interest include business services, healthcare and information technology services companies.  The firm is based in Nashville (www.petracapital.com).

Pegasus Capital Group invests in private companies and corporate divestitures located across North America that have $2 million to $15 million of operating cash flow and EBITDA margins greater than 10%. Sectors of interest include industrials, chemicals, packaging, agricultural products, and aerospace & defense. The firm is based in Santa Monica, CA (www.pegasusmgmt.com).

© 2017 Private Equity Professional | April 24, 2017