Archives for May 17, 2017

Palm Beach Invests in Neptune Research

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Palm Beach Capital has made an investment in Neptune Research and its sister company FloTex, providers of infrastructure repair and restoration services.

Neptune Research and FloTex (together NRI) provide materials that are used to repair, protect and reinforce pipes, pipelines and other civil infrastructures. The company’s products are made with moisture-curable and epoxy based carbon fiber, fiberglass, Kevlar and other aramid (a class of synthetic polymers) composite materials. NRI’s customer base includes companies in a variety of industries, including construction, industrial, marine, military, mining, municipalities, offshore, oil & gas, and petrochemical. NRI was founded in 1982 and is headquartered near Palm Beach in Riviera Beach, FL (www.neptuneresearch.com).

“This was an amazing opportunity for NRI to catapult to the next level and we couldn’t have picked a better partner than Palm Beach Capital. They have the knowledge and team to help us continue to revolutionize the composite infrastructure business,” said Chris Lazzara, NRI’s Chairman, President and Chief Executive Officer.

NRI originally developed its pipe repair systems for application within the marine industry. The company’s products caught the attention of the US Navy and in 1996 the company secured its first contract with the US government requiring NRI’s Syntho-Glass system to be carried aboard all Navy vessels. Since that time, the company has doubled every three years in size and revenues as the demand for its products continues to grow. To support this demand, NRI has introduced an average of one new product per year over the last four years, with each product focusing on the company’s participation in the evolution of leak repair and pipe reinforcement.

“We are excited to partner with Chris and the rest of the NRI team and to provide the support necessary for the company to realize the full, global potential of NRI’s revolutionary solutions and service offering,” said Michael Chalhub, a Partner at Palm Beach Capital. “NRI represents a unique opportunity for us to invest at an inflection point where such innovative solutions are so well-timed within the energy, infrastructure and composite industry.”

Palm Beach Capital makes control and non-control investments of $5 million to $50 million in companies with enterprise values from $20 million to $200 million and that have at least $20 million of revenue and a minimum EBITDA of $5 million. Sectors of interest include business services, business process outsourcing, transportation and logistics, and healthcare. Since founding in 2001, Palm Beach Capital has made investments in 42 companies and has approximately $325 million in total assets under management. The firm has offices in West Palm Beach and Tampa (www.pbcap.com).

The investment in NRI was made by Palm Beach Capital through its fourth investment fund, Palm Beach Capital Fund IV, LP.

© 2017 Private Equity Professional | May 17, 2017

O2 Expands Telecom Services Platform

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NTI Connect, a platform company of O2 Investment Partners, has acquired Fairhaven Integration Services, a provider of cable, telecom and IT engineering and installation services.

The NTI Connect group of companies provides specialized fiber optic technical services including fiber optic splicing, testing, connectivity and data center build-outs to fiber, wireless and broadband carriers, cable companies, data center operators and telecom companies.  NTI Connect is led by its CEO Brian James and is headquartered in the Chicago suburb of West Chicago (www.nti-connect.com).

The NTI Connect platform was established with the initial acquisitions of National Technologies (www.national-technologies.com) and NTI Fiber (www.ntifiber.com) in October 2015. The platform was expanded with the acquisition of CCSI Networks (www.ccsinetworks.com) in July 2016. The buy of Fairhaven now brings NTI Connect equipment integration competencies (engineer, furnish and install) that it can use to service cable companies, enterprise and telecom customers in the rapidly increasing demand for video content. Fairhaven was founded in 2003 by Jerry Hart, Andy Goldsworthy and Jason Willis and is based in Atlanta (www.fairhavenllc.com).

“We’re enthusiastic about our partnership with O2 and the NTI Connect team,” said Mr. Hart and Mr. Goldsworthy in a released statement. “We’re ready to take our business to the next level and we believe that by adding fiber and wireless network deployment services to our equipment integration services, as a team we now address all needs of leading telecom and data networks, making our business more relevant to the needs of our clients.”

Participating in this transaction with O2 is Brightwood Capital (www.brightwoodlp.com), The Private Bank (www.theprivatebank.com), and Alcentra Capital (www.alcentra.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. The firm is based in the Detroit suburb of Bloomfield Hills (www.o2investment.com).

Luke Plumpton, a Partner at O2 Investment Partners, led this transaction.

© 2017 Private Equity Professional | May 17, 2017

Onex Sells USI Insurance Services

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Onex Corporation has completed the sale of USI Insurance Services to KKR and Caisse de dépôt et placement du Québec (CDPQ) at an enterprise value of $4.3 billion.

USI Insurance Services is one of the largest insurance brokerages in the US with approximately 140 offices and more than 4,400 employees offering property and casualty, employee benefits and personal risk insurance products and services. The company was founded in 1994 and is headquartered in Valhalla, NY (www.usi.com).

The Onex Group acquired USI in December 2012 with an equity investment of $610 million, of which Onex’ share was $170 million. With this sale, Onex has now received total proceeds of $2.1 billion, including a prior distribution of $181 million in 2015, resulting in a gross multiple of invested capital of 3.4 times and a 34% gross rate of return. Onex’ portion of the sale proceeds was $563 million, including carried interest of $65 million.

Onex Corporation makes private equity investments through the Onex Partners and the ONCAP families of funds. Onex has more than $25 billion of assets under management and is based in Toronto with additional offices in New York, New Jersey and London (www.onex.com).

KKR (NYSE:KKR) makes private equity, fixed income and other investments in companies in North America, Europe, Asia and the Middle East.  The firm was founded in 1976 and in addition to its New York headquarters the firm has offices in Menlo Park, San Francisco, Houston, Washington DC, London, Paris, Hong Kong, Tokyo, Beijing, Mumbai, Dubai and Sydney (www.kkr.com).

CDPQ is a Quebec-based institutional investor that manages funds primarily for public and para-public pension and insurance plans. As at December 31, 2016, it held C$270 billion in net assets. CDPQ invests globally in major financial markets, private equity, infrastructure and real estate (www.cdpq.com).

© 2017 Private Equity Professional | May 17, 2017

ACON Closes Fourth US PE Fund

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Middle market investor ACON Investments has held a final closing of ACON Equity Partners IV, LP (AEP IV) at the hard cap of $1.07 billion. The new fund’s original target was $850 million.

AEP IV received commitments from existing ACON investors as well as several new limited partners. The fund’s investors include public and private pensions, sovereign wealth funds, insurance companies and other institutional investors from North America, Asia, and Europe.

ACON invests from $20 million to $150 million of equity capital in middle-market companies. The firm pursues a theme-based investment strategy by focusing on industries and businesses at key inflection points in their development and pursues these opportunities in partnership with established management teams. The firm was founded in 1996 and has offices in Washington, DC (headquarters); Los Angeles; Mexico City; Sao Paulo; and Bogota (www.aconinvestments.com).

ACON has already closed its first two investments for AEP IV: in November 2016 it acquired BioMatrix Specialty Pharmacy, a Florida-based specialty pharmacy platform company with a focus on both infused and oral specialty drugs; and earlier, in February 2016, it acquired in a public-to-private transaction Florida-based APR Energy, a provider of large-scale power generation services through a fleet of mobile power generation equipment.

Evercore Private Funds Group was ACON’s global placement agent for this fundraise and Hogan Lovells served as ACON’s primary fund counsel.

© 2017 Private Equity Professional | May 17, 2017

New MD at Insignia Capital

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Lower middle-market investor Insignia Capital Group has promoted Tiffany Obenchain to Managing Director.

“Tiffany is an outstanding member of the Insignia team and plays an instrumental role in all aspects of our firm,” said David Lowe, CEO and Partner of Insignia. “Tiffany consistently exhibits the kind of tenacity and charisma that we value highly at Insignia. She is a proven professional who embodies our core values at all times. We look forward to her continued success.”

Ms. Obenchain joined Insignia in 2014 and is responsible for deal origination, evaluation and execution. Earlier in her career she was with Lake Capital, where she focused on investments in service-based companies, and HarbourVest Partners, where she focused on direct co-investments in growth equity, buyout and mezzanine transactions. Ms. Obenchain began her career as an investment banking analyst at JPMorgan. She has a BA from Northwestern University and an MBA from Harvard Business School.

Insignia Capital Group invests in lower middle-market companies that have from $5 million to $30 million of EBITDA. Sectors of interest include business services, consumer, and healthcare. The firm is based near San Francisco in Walnut Creek, CA (www.insigniacap.com).

© 2017 Private Equity Professional | May 17, 2017