Archives for April 19, 2017

Milestone Exits Quintus

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Quintus Technologies, a portfolio company of Milestone Partners, has been acquired by Kobe Steel, Ltd. for $115 million. Milestone first invested Quintus Technologies in April 2009.

Quintus Technologies specializes in the design, manufacture, installation, and support of high pressure systems (Isostatic presses) used for sheet metal forming and densification of advanced materials and industrial components in the aerospace, automotive, energy, and medical implants industries. Isostatic presses apply high pressure from all directions at high temperature or room temperature to press-sinter and form metal, ceramic and carbon materials. The presses are widely applicable in the manufacture of high-performance products, such as aircraft parts, power generation turbine blades and semiconductor materials. Quintus Technologies has 188 employees and is headquartered near Stockholm in Västerås, Sweden (www.quintustechnologies.com).

Kobe Steel operates through three divisions – Materials (steel, welding, aluminum and copper); Machinery (industrial machinery, construction machinery and engineering); and Electric Power Supply. Kobe Steel has head offices in Kobe and Tokyo, Japan and employs approximately 36,000 people (www.kobelco.com).

Milestone Partners invests from $5 million to $40 million in leveraged buyouts and recapitalizations of lower middle market businesses that have revenues of $15 million to $150 million, EBITDA of $3 million to $20 million, and valuations of $15 million to $150 million. The firm prefers niche-market leaders that provide high-margin products or services. Milestone Partners was founded in 1995 and is located in Radnor, PA (www.milestonepartners.com).

© 2017 Private Equity Professional | April 20, 2017

Prospect Partners Sells Velvac

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Prospect Partners has sold its portfolio company Velvac, acquired in August 2005, to publicly-traded Eastern Company for $39.5 million plus certain future earn-out payments. Velvac had net sales of $58.7 million for fiscal year 2016.

Velvac is a manufacturer and supplier of exterior mirror and vision systems and other component parts for the truck, recreational vehicle and specialty vehicle industries. The company has more than 3000 SKU’s and sells its products both directly to OEMs, and through distributors to the OEM recreational vehicle and truck market and aftermarket. Velvac is led by CEO Jeff Porter and is based west of Milwaukee in New Berlin, WI (www.velvac.com). At closing, Velvac became an independent subsidiary of The Eastern Company and Mr. Porter continues to lead the business.

Velvac is also an innovator of vision systems for commercial vehicles and motorhomes. The company introduced its first camera-enabled vision system in 2006 and now sells approximately 45,000 camera enabled units annually. Velvac recently introduced its Road-iQTM 360-degree view camera, recording and communication system and announced TrailerLink, a new product that supports trailer-to-tractor video and data communications (www.road-iq.com).

“Jeff Porter was a great CEO partner who built a first-class operating team and deftly guided the company into new product markets, new distribution channels, and a strong position in every segment it entered,” said Prospect Partners’ Principal Erik Maurer.

During the term of its ownership, Prospect completed two add-on acquisitions for Velvac: In March 2009 it acquired K-10 Enterprizes (based in Mission, TX) a supplier of blind-spot safety mirror systems for heavy-duty trucks; and in December 2013 it acquired the assets of the ViewMaster mirror product line from the Mirror Lite Company (Rockwood, MI). ViewMaster mirrors are used on vehicles in the refuse market, as well as other heavy and medium-duty trucks.

“Velvac has been a highly rewarding investment for Prospect Partners,” said Rick Tuttle, a Founding Principal of Prospect Partners. “It has been an honor to partner with a terrific management team, provide capital support for select strategic acquisitions, and be part of Velvac’s exciting transition from an RV-centric supplier to the leading player in multiple attractive niche markets.”

Prospect Partners focuses exclusively on management-led leveraged recapitalizations and acquisitions of niche market leaders with revenues of less than $75 million.  Areas of interest include niche manufacturing, distribution, and specialty service markets. Since 1998, Prospect Partners has built 48 platforms by investing in more than 140 businesses. The firm has $470 million of capital under management and is based in Chicago (www.prospect-partners.com).

“Prospect Partners has been tremendous to work with these past 11 years,” said Mr. Porter. “They supported our management team in good times and bad. Their support during the depths of the Great Recession laid the groundwork for our emergence from the downturn as a much stronger competitor and propelled Velvac to rapid growth these last seven years. The professionalism and integrity exhibited by the Prospect Partners team during their investment period was unmatched.”

The Eastern Company (NASDAQ:EML) is a manufacturer of custom-engineered components and products, including industrial hardware, security products and metal castings that are used in the heavy and medium truck, mining, commercial laundry, electronics, military and industrial markets. The company, headquartered in Naugatuck, CT, operates from 13 locations in the US, Canada, Mexico, Taiwan and China (www.easterncompany.com).

“We are delighted to add Velvac to our portfolio of businesses,” said August Vlak, President & CEO of Eastern. “Velvac represents an excellent fit for Eastern and helps us expand our presence in the truck and motorhome markets. This transaction also adds a new growth platform, with significant potential to expand margins in the future.”

© 2017 Private Equity Professional | April 19, 2017

Silver Oak Acquires Legacy Farms

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Silver Oak Services Partners has acquired Legacy Farms in partnership with the company’s management team.

Legacy Farms is a fresh vegetable and fruit grower, shipper, and wholesaler to grocers and foodservice providers in the Western US.  The company specializes in dry vegetables such as bell peppers, tomatoes, and squash, and also offers a selection of fresh fruits.  Legacy Farm operates 11 branded trucks serving the Southern California area and, including third party providers, runs over 50 trucks per day. The company has a 100,000 square foot distribution center and headquarters located near Los Angeles in Buena Park, CA (www.legacyproduce.com).

“We’re at an exciting point in Legacy Farms’ evolution, and we realized that a value-added partner with additional capital resources could help us execute on our growth strategy,” said Wally Sinner, CEO of Legacy. “Silver Oak’s distribution experience and track record of executing growth strategies alongside their management partners made them logical partners for us.  We look forward to working with them as we focus on expanding our capacity, making additional investments in our business and executing add-on acquisitions.”

Silver Oak was attracted to the produce sector given the highly-perishable nature of the product, the recurring demand from customers, and the recession-resistant nature of the sector. “Legacy is well known in the industry for its customer service, product quality and reliability, and we’re excited to partner with such an experienced management team,” said Greg Barr, Managing Partner at Silver Oak. “We believe there are many organic and acquisition growth opportunities for the business, and we look forward to building upon Legacy’s impressive historical track record.”

Silver Oak Services Partners makes control investments of $10 million to $30 million in companies with revenues from $15 million to $150 million and EBITDAs from $4 million to $20 million. As the firm name implies, sectors of interest include business, healthcare, and consumer services.  Silver Oak was founded in 2005 and is based in the Chicago suburb of Evanston (www.silveroaksp.com).

Legacy Farms is actively looking for add-on acquisition opportunities in the Western US. Please contact Greg Barr or David Friedman of Silver Oak for additional information.

© 2017 Private Equity Professional | April 19, 2017

Beekman Forms New Movie Platform

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The Beekman Group, through Beekman Investment Partners III LP, has acquired certain assets from AMC Entertainment Holdings (NYSE: AMC) and Carmike Cinemas to create a new movie circuit that will operate under the brand New Vision Theatres.

New Vision is now a 16-unit theatre circuit with 184 screens including 66 “3D” screens with locations in nine states. Most of the theatres are multiplexes with 12 or more screens, and many have expanded food and beverage options, including hot food and full bars. New Vision focuses on first-run content but also provides alternative content such as live sporting events and concerts. The company is headquartered near New York in Westfield, NJ (www.newvisiontheatres.com).

The Beekman Group pursued this transaction in partnership with industry executives Dale “Bud” Mayo and Charles Goldwater. Mr. Mayo and Mr. Goldwater along with other members of the operating team co-invested in New Vision with Beekman.  “The Beekman team identified the exhibitor industry as a stable, attractive segment for reasonably priced out-of-home entertainment and has evaluated numerous platform opportunities over the past few years,” said John Troiano, Beekman’s Managing Partner. “New Vision represents a compelling platform given its size, geographic breadth, and the ability to partner with such a complement of talented operators led by Bud Mayo and Chuck Goldwater.”

Previously, Mr. Mayo was the Co-founder, Chairman and CEO of Digital Cinema Destinations from its founding in 2010 through the sale of the company in 2014 to Carmike. He was also Co-founder, Chairman and CEO of Cinedigm from its founding in 2000 to 2010. “New Vision is a significant platform in an industry that has an exciting slate of new movie releases on the horizon, such as “The Fate of The Furious” this weekend followed by Disney, Marvel and Star Wars franchise releases. We look forward to working with Beekman to execute our strategies to deliver more value and quality services to New Vision customers including expanded food and beverage programs, investments in facilities including recliners, and additional content in the theaters,” said Mr. Mayo, who has become the Chairman of New Vision.

Mr. Goldwater was most recently the Vice President – Strategic Initiatives of Carmike Cinemas and has held various senior positions over his career at Digital Cinema Destinations, Cinedigm, Digital Cinema Initiatives, and Loews Cineplex. “We are focused on customer service, providing our guests with everything they are accustomed to and more. Our management, especially our GMs and teams in the theatres, has years of experience in creating a local and customized experience in our theaters, and in partnership with Beekman whose principals also have significant industry expertise, we are committed to deliver that experience to our New Vision Theatre guests,” said Mr. Goldwater, who has become the CEO of New Vision.

The Beekman Group makes control investments from $5 million to $25 million in privately held companies, family businesses in transition, operating divisions of large companies or small public companies looking to privatize. Typical acquisitions have revenues from $10 million to $200 million and enterprise values of $10 million to $100 million.  The Beekman Group was founded in 2004 and is based in New York (www.thebeekmangroup.com).

According to The Beekman Group, New Vision will be a platform for consolidation of additional theatre acquisitions as opportunities arise. New Vision is the fourth platform investment in Beekman Investment Partners III LP, Beekman’s third which closed in January 2015.

© 2017 Private Equity Professional | April 19, 2017

MDP Joins with Ex-Nielsen Head

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Madison Dearborn Partners has partnered with John Lewis, the former Global President of Nielsen, to pursue investment opportunities in the information services sector.

“John is a successful operator with a deep understanding of what it takes to build and cultivate a strong franchise in information services,” said Scott Pasquini, a Managing Director at Madison Dearborn. “His operating expertise complements our capabilities well and we are excited to add John’s contributions to the long-term success of our information services investments.”

Nielsen (NYSE:NLSN) is a global information, data, and measurement company. In 2016 the American Marketing Association ranked Nielsen the top market research company in the United States. Nielsen operates in over 100 countries and employs approximately 44,000 people worldwide. Total revenues were $6.3 billion in 2016 and the company is headquartered in New York (www.nielsen.com).

“I’ve long admired Madison Dearborn’s approach and I am pleased to be
formally aligned with them.”

Mr. Lewis was with Nielsen from January 2006 until June 2016, most recently as the company’s Global President. During his time at the company he completed and successfully integrated more than 10 strategic acquisitions. Prior to Nielsen, Mr. Lewis was CEO of Knowledge Networks, a venture capital-backed early stage company where he succeeded the founding CEO and led its transformation into a more differentiated provider of specialized market research. Previously, he led the Consumer Products division at The NutraSweet Company. He earned a bachelor’s degree from Princeton University and an MBA from Northwestern University’s Kellogg School of Management.

Mr. Lewis will assist Madison Dearborn in identifying and developing businesses with differentiated capabilities in data and business analytics. “We are thrilled to be working with John as we look to secure compelling investment opportunities in this exciting sector,” said Zaid Alsikafi, a Managing Director at Madison Dearborn and co-head of the firm’s TMT Services team. “Madison Dearborn’s expertise and resources, coupled with John’s background, create a unique proposition with which to source and grow cutting-edge businesses focused on data analytics.”

“I’ve long admired Madison Dearborn’s approach and I am pleased to be formally aligned with them to help identify attractive investment opportunities in the data and business analytics sector,” said Mr. Lewis. “Madison Dearborn and I share a common conviction around the compelling opportunities this evolving field presents, as new ways of ingesting and analyzing data are developed to support the critical needs of consumer-facing businesses across a range of industry verticals.”

Madison Dearborn invests in privately held or publicly traded companies in the following sectors: financial and transaction services; business and government services; health care; basic industries; consumer; and telecom, media and technology services. In August 2016 the firm closed its seventh buyout fund at $4.4 billion. Madison Dearborn was founded in 1992 and is based in Chicago (www.mdcp.com).

© 2017 Private Equity Professional | April 19, 2017