Archives for May 12, 2017

Shore Buys Spine Assets from Cook

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IZI Medical Products, a portfolio company of Shore Capital Partners since May 2016, has acquired the vertebroplasty family of products from Cook Medical.

Vertebroplasty products are used in minimally invasive surgical procedures to stabilize spinal fractures and to stop the pain caused by the fracture. The acquired portfolio of products consists of needles, injectors and cements sold under the Duro-Ject Osteo-Site, Osteo-Force and Vertefix brands.

Vertebral compression fractures are often caused by osteoporosis, a disease of low bone strength that affects an estimated 10 million Americans, resulting in an estimated 700,000 spinal fracture cases annually that can cause pain, height loss, balance difficulties and a decreased quality of life. In the US, approximately 50 percent of women and 25 percent of men over the age of 50 will experience an osteoporosis fracture in their lifetime.

IZI Medical is a developer and manufacturer of medical consumable devices used in radiology, radiation therapy and image guided surgery procedures. The company sells to more than 1,000 domestic customers as well as internationally across 25 countries. IZI Medical is led by its CEO Greg Groenke and is headquartered near Baltimore in Owings Mills, MD (www.izimed.com).

“This is a transformative acquisition for IZI, and is consistent with the strategy we developed when we partnered with Greg Groenke and the management team at IZI a year ago,” said Don Pierce, a Partner of Shore Capital Partners. “This acquisition is an excellent fit with the broader strategy of building a leading platform serving the interventional radiology and oncology markets. This product family will extend IZI’s international sales reach and increase the depth of its product portfolio.”

Shore Capital Partners invests from $10 million to $30 million of equity per transaction in lower middle market healthcare related companies that have $5 million to $50 million of revenue and $1 million to $7 million of EBITDA. Sectors of particular interest include addiction treatment; dermatology; home health; interventional products; medical scribes (physician assistants); optometry/ophthalmology; physical therapy; psychiatrist practice management; urgent care; vein clinics; and wound care. Shore was founded in 2009 and is based in Chicago (www.shorecp.com).

Just last month, Shore held a first and final close of its second institutional private equity fund, Shore Capital Partners Fund II, LP, at the hard cap of $190 million. The firm’s earlier fund, Shore Capital Partners Fund I, LP, closed in June 2014 with $112.5 million of committed capital. Fund II, raised in less than three months, surpassed its original target of $150 million and was substantially oversubscribed with investor demand approaching $750 million.  With Fund II, Shore now manages a total committed capital base of approximately $350 million.

Cook Medical is part of the Cook Group, a privately held medical device manufacturer. The company has more than 2,400 employees and is headquartered in Bloomington, IN (www.cookmedical.com).

© 2017 Private Equity Professional | May 12, 2017

O2 Expands Countertop Platform

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Clio Holdings, a platform company formed in June 2016 by O2 Investment Partners and Oakland Standard Co. to consolidate the fragmented countertop supply and fabrication industry, has acquired Premier Surfaces.

Premier Surfaces is a fabricator and installer of custom countertops throughout the Southeast US with four locations in Georgia, Alabama and Tennessee. The company was founded in 2002 by Eric Tryon is based in Atlanta (www.premiersurfaces.com).

The acquisition of Premier Surfaces represents the sixth acquisition since Clio’s formation in June 2016. Clio now has more than $100 million in annual revenue, nearly 1,000 employees and has 17 locations across the US. Clio is headquartered in the Detroit suburb of Birmingham (www.clioholdings.com).

The first acquisition, prior to the formation of the Clio holding company, was the buy of Princess Marble by Oakland Standard in June 2016. Princess is a fabricator and installer of natural and manufactured stone products primarily serving metropolitan Minneapolis-Saint Paul (www.princessmarblegranite.com). In September 2016, Clio acquired Granite Source, a stone countertop fabrication and installation business serving metropolitan Washington DC, Virginia and Maryland (www.granitesource.net). Top Master was acquired in November 2016 and is a fabricator of countertops with six locations, primarily serving the Iowa, Kansas, Missouri and Nebraska markets (www.topmasterinc.com); Solid Surfaces was acquired in January 2017 and is the largest fabricator and installer of quartz, granite, and solid surface countertops in upstate New York (www.solidsurfacesny.com); and US Marble was acquired in March 2017 and is a nationwide supplier of custom bathroom surfaces with locations in Michigan and Tennessee (www.usmarble.com).

O2 Investment Partners makes control investments of $5 million to $75 million in companies with EBITDAs from $2 million to $10 million located anywhere in the US and Canada but has a preference for the Midwest and the Great Lakes regions. Sectors of interest include niche manufacturing, niche distribution, select service businesses, and certain technology businesses. O2 Investment Partners is based in the Detroit suburb of Bloomfield Hills (www.o2investment.com).

Oakland Standard invests in US and Canada-based companies that have less than $10 million of EBITDA. Sectors of interest include niche manufacturers, value-added distributors, general industrial and automotive, and building products. The firm is based in the Detroit suburb of Birmingham (www.oaklandstandard.com).

Tecum Capital Partners is also an investor in Clio Holdings and has provided both mezzanine debt and an equity co-investment to support the company’s strategy. Tecum invests from $3 million to $15 million of subordinated debt and equity in companies that have revenues of $8 million to $100 million and EBITDA of at least $2 million. The firm is based in the Pittsburgh suburb of Wexford (www.tecum.com).

© 2017 Private Equity Professional | May 12, 2017

KPS to Acquire TaylorMade

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KPS Capital Partners has signed an agreement to acquire the TaylorMade Golf Company from Adidas for total consideration of $425 million. Half of the purchase price will be paid in cash and the balance paid over time under a secured note and through contingent considerations.

TaylorMade is a designer and manufacturer of golf equipment including drivers, fairway woods, hybrids, irons, wedges, golf balls and accessories. The company is led by CEO David Abeles and is headquartered in Carlsbad, CA (www.taylormadegolf.com).

“TaylorMade is one of the preeminent golf equipment brands worldwide, with leading-edge products that consistently provide consumers a distinct performance advantage over the competition,” said David Shapiro, a Managing Partner of KPS. “We look forward to working with David Abeles, his management team and all TaylorMade employees around the world to build on this great platform by driving growth both organically and through strategic acquisitions.”

TaylorMade was founded in 1979 by Gary Adams in a leased 6,000 square foot building near Chicago in McHenry, IL. The company began with three employees and sold only one item, a newly invented 12-degree loft metalwood. The metalwood was unique in its steel construction – replacing persimmon as the primary material from which modern drivers are manufactured – and adopted the nickname “Pittsburgh Persimmon”. TaylorMade was independently owned until 1984 when Salomon, a French a sports equipment manufacturing company known for its ski products, acquired the company. In 1997 Adidas acquired Salomon.

In 2012, TaylorMade had total revenues of $1.5 billion. Last year, total revenues were approximately $970 million. In August 2016, Adidas’ biggest competitor, Nike, announced that it would exit the golf equipment business. In September 2016, Golfsmith, the world’s largest golf retailer, filed for Chapter 11 bankruptcy. Golf participation has been on a slow and steady decline for two decades and participation among millennials has been particularly weak.

KPS Capital Partners is the manager of the KPS Special Situations Funds, a group of private equity funds with approximately $5.6 billion of assets under management that invests in restructurings, turnarounds and other special situations. KPS targets manufacturing and industrial companies that are going through a period of transition or experiencing operating or financial difficulties.  The firm’s portfolio companies have aggregate annual revenues of approximately $6 billion, operate 98 manufacturing plants in 23 countries, and employ over 42,000 people worldwide.  KPS Capital Partners is headquartered in New York (www.kpsfund.com).

“This is the beginning of an exciting new era for TaylorMade, and our entire management team is excited to partner with KPS in this next phase of our growth and continued development of our brands, business and people,” said Mr. Abeles. “Given their strategic vision, operational resources and significant access to capital, KPS is the ideal partner to help TaylorMade build upon its strong momentum.”

Completion of this transaction is expected later in 2017.

© 2017 Private Equity Professional | May 12, 2017

NewSpring Closes Fourth Growth Equity Fund

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NewSpring Capital has held a final close of NewSpring Growth Capital IV, LP at $280 million, the largest growth fund the firm has ever raised. The new fund was backed by existing and new investors, including family offices, insurance companies, public pension plans, fund of funds, financial institutions, and university endowments.

NewSpring Growth Capital invests in growth-stage companies across the business services, enabling technology, and information technology sectors. Typical companies will be located in the Mid-Atlantic, have revenues from $5 million to $50 million, a high growth profile, sustainable gross margins, and recurring revenue. To date, the new fund has committed capital to four companies: Circonus, a provider of IT monitoring and analytics; Interactions, a provider of speech and natural language technology; ReviMedia, a provider of lead generating marketing services; and Snagajob.com, a search engine for hourly job seekers and employers.

In tandem with the closing, NewSpring Growth has added Prashanth (PV) Boccasam, an experienced entrepreneur and investment professional as a new Operating Partner. Most recently, Mr. Boccasam was a Partner with Novak Biddle Venture Partners, a DC-area private equity firm, and has served on several growth-stage company boards of directors, including Appian Corporation, a provider of business process management software, and WealthEngine, a provider of predictive marketing analytics.

“In addition to PV’s operating acumen, he will be based in the metro-Washington, DC area which strengthens our presence in the southern end of the Mid-Atlantic region and enables us to further reinforce NewSpring’s brand in the DC, Northern Virginia and Maryland markets,” said Marc Lederman, NewSpring General Partner and a co-founder of the firm.

NewSpring Growth Capital is part of NewSpring Capital, a provider of equity and mezzanine capital across a number of private equity strategies. The firm has offices near Philadelphia in Radnor, PA; near Baltimore in Towson, MD; and in Chicago (www.newspringcapital.com).

© 2017 Private Equity Professional | May 12, 2017