Archives for June 19, 2017

CCMP and MSD to Acquire Hayward

by

Hayward Industries has entered into an agreement to be acquired by CCMP Capital Advisors, MSD Partners, and Alberta Investment Management Corporation. The transaction is expected to close in the third quarter of 2017.

Hayward Industries is a manufacturer of residential and commercial pool equipment and industrial flow control products. The company’s products include pool and spa equipment such as pumps, filters, heaters, cleaners, salt chlorinators, automation equipment, lighting, and safety products. The company is headquartered in Elizabeth, NJ (www.hayward.com).

Hayward was founded in 1925 and has been owned by the Davis family since 1964. The company has grown over the years through both organic product development and strategic acquisitions that have built its product offering and expanded its geographical reach and the company now sells its products worldwide. The most recent add-on was in July 2016 when the company acquired Kripsol Group – a maker of pumps, filters, ladders, lights, salt chlorinators, and controls – based southwest of Madrid in Yuncos, Spain. Hayward has achieved an average annual revenue growth rate above 10% since the Davis family purchased control.

“I am extremely proud of the accomplishments realized by our team in positioning Hayward as a leading provider of pool equipment throughout the world. As I approach retirement, I am very confident this next generation of ownership will carry on the Hayward tradition and that our legacy is in excellent hands,” said Robert Davis, Co-Chairman of the Board of Hayward.

Clark Hale, the current President and CEO of Hayward, and his management team will retain an ownership interest in the business. “We are thrilled to partner with Clark and his team to acquire Hayward, which has built an outstanding leadership position and brand loyalty in the pool equipment market. Since the purchase of control of Hayward by the Davis family in 1964, the company has grown from a regional pool equipment supplier to a global leader with a track record of product innovation and world class supply chain and manufacturing capabilities,” said Mark McFadden, a Managing Director at CCMP.

CCMP specializes in middle market buyouts and growth equity investments of $100 million to $500 million in North America and European companies. The firm typically invests $100 million to $500 million of equity per transaction in companies with enterprise values of $250 million to $2 billion. Sectors of interest include consumer/retail, industrial, chemicals/energy, and healthcare. CCMP is headquartered in New York with additional offices in Houston and London (www.ccmpcapital.com).

“We are delighted to have the opportunity to partner with Hayward’s management in this seminal event in the company’s distinguished history, and we are pleased to be trusted with the stewardship of the business in the next chapter of its evolution,” said Kevin Brown, a Managing Director in the Private Capital Group at MSD Partners. “Hayward is a perfect fit with MSD Private Capital Group’s strategy of investing in companies that can deliver stability and growth over the long term, and we look forward to supporting its continued growth.”

MSD Partners invests across a range of asset classes. For direct investments in operating companies the firm looks to invest at least $100 million in business that have enterprise values of $200 million to $1 billion or more and EBITDA in excess of $25 million. Industries of interest include business and tech-enabled services, light industrial and industrial services, value-added distribution, healthcare services, media and entertainment, and consumer products. MSD Partners was formed in 2009 by the principals of MSD Capital to enable a select group of investors to invest in strategies that were developed by MSD Capital, a family office formed to manage the capital of Michael Dell and his family. MSD Partners is headquartered in New York (www.msdprivatecapital.com).

Alberta Investment Management Corporation (AIMCo) is one of Canada’s largest and most diversified institutional investment fund managers that manages an investment portfolio of approximately $100 billion – with a $4 billion private equity allocation – for a range of public sector pensions, endowments and government funds. AIMCo is headquartered in Edmonton (www.aimco.alberta.ca).

Houlihan Lokey is serving as financial advisor to CCMP, MSD Partners, and AIMCo on the transaction, with Bank of America serving as co-advisor. Bank of America, Jefferies, Morgan Stanley, and Nomura are providing financing to support the transaction. Goldman Sachs is the financial advisor to Hayward.

© 2017 Private Equity Professional | June 19, 2017

BV Invests in Hero K12

by

BV Investment Partners has made an investment in Hero K12, an education software provider. The investment from BV will be used to pursue Hero K12’s growth and acquisition strategy that will expand the company’s product line and geographic reach.

Hero K12 provides software and systems that allow school districts to capture and collect data that allows educators to replace traditional discipline policies with initiatives that emphasize and recognize positive behaviors. The goal of Hero’s products is to decrease absences and suspensions in order to improve students’ test scores and reduce teachers’ time spent on discipline. The company’s software is used in K-12 schools across districts in 42 states in the US. Hero K12 is headquartered in Miami Lakes, FL (www.herok12.com).

“BV identified a strategic interest in the EdTech market several years ago and the opportunity to invest in Hero evolved out of our relationship with Alan Mendelson, CEO of our existing portfolio company Plasco ID,” said Justin Harrison, Managing Director of BV. “We are thrilled to have the opportunity to partner with the management team of Hero K12. They have demonstrated a tremendously healthy and scalable model for success with Hero, and they have clear plans for building an all-encompassing EdTech business. Their portfolio strategy will broaden their service offering, focusing on the whole-child, and creating learning environments that allow all children to grow and succeed at school. We look forward to supporting them in Hero K12’s next phase of growth.”

BV Investment Partners makes investments in companies active in the information and business services, and communications industries. Since its founding in 1983, the firm has invested over $2.9 billion in more than 89 companies.  In April 2017, BV Investment Partners held a first and final close for BV Investment Partners Fund IX, LP at its $750 million hard cap, well above its $600 million target.  Fundraising for Fund IX began in mid-January 2017. The firm’s earlier fund closed in September 2014 at its hard cap of $487 million. BV Investment Partners is headquartered in Boston (www.bvlp.com).

“The EdTech marketplace continues to experience significant transformation, as schools increase their reliance on technology,” said Mark MacDonald, President and CEO of Hero, “More than ever, educators need proven, scalable software solutions to create positive, connected school environments.  We have a world-class team of industry executives at Hero K12, who bring operating, strategic and marketing expertise to our group of portfolio companies. Our partnership with BV Investment Partners gives us access to additional funding and we are excited to scale our activities more aggressively.”

© 2017 Private Equity Professional | June 19, 2017

New PE Firm Launched in Chicago

by

HC Technologies, a Chicago-based financial trading firm, has today launched a new private equity arm, HC Private Investments (HCPI).

HCPI will make investments between $5 million and $25 million in lower-middle market manufacturing companies ranging in size from $10 to $100 million in enterprise value. Sectors of interest include consumer and industrial. HCPI’s investments can take the form of control equity, growth equity, structured equity and junior debt (www.hcprivateinvest.com).

HCPI is led by John Kelly and Matthew Moran. Mr. Kelly was previously a Vice President with The Tokarz Group Advisers and Mr. Moran was a Vice President at Wind Point Partners.

“I am delighted to be expanding our investment capacity with the launch of HCPI,” said Joe Niciforo, Managing Principal of HC Technologies. “I have known John and Matt for years, and have always been impressed by their investing acumen and disciplined approach.  Under their leadership we anticipate an extremely selective, but expeditious investment process geared toward helping companies reach their full potential through post-investment value creation.”

“We are excited to partner with HC Tech’s dynamic investment platform as it expands beyond the public markets into private equity,” said Mr. Kelly. “We are seeing a tremendous opportunity in the lower-middle market, where businesses have historically lacked the necessary strategic resources to realize their full potential.  Our investment approach focuses on identifying high-quality companies in the consumer and industrial sectors and leveraging our deep network of experienced industry executives to partner with business owners and execute defined growth strategies.”

“As a patient and flexible financial partner, we believe we are well positioned to capitalize on the numerous opportunities in the marketplace and are encouraged by our strong pipeline of potential investments currently under review,” said Mr. Moran.

HC Technologies is a trading firm specializing in the foreign exchange and futures markets. The firm was founded in 2007 by Joe Niciforo and Charlie Carey and has offices in Chicago, London and New York (www.hctech.com).

© 2017 Private Equity Professional | June 19, 2017

Alpine Hits Fund VI Hard Cap

by

Alpine Investors has held a final close of its sixth fund, Alpine Investors VI, LP, at its hard cap with $532 million of capital commitments.

Alpine specializes in investing in high growth, founder-owned, lower middle market companies in the software and business services sectors. Typical targets will have from $5 million to $15 million of EBITDA. Since founding in 2001, Alpine has now raised over $1.4 billion of committed capital though six funds. The firm is based in San Francisco (www.alpine-investors.com).

Fundraising for Alpine VI officially launched at year end – the fund’s Form D was filed with the SEC on December 19th, 2016 – and was quickly oversubscribed. Fund VI has commitments from endowments, family offices, foundations, gatekeepers and pension plans.

“We are thrilled to have built such a wonderful base of high-caliber and like-minded investors,” said Graham Weaver, Managing Partner of Alpine. “We are excited to continue our strategy of delivering outstanding returns to our limited partners and building long-term relationships with our CEOs and management teams over multiple funds.”

Acalyx Advisors (www.acalyx.com) served as Alpine’s placement agent. “Alpine’s CEO-in-Residence strategy allows the firm to buy high quality businesses in need of institutional management, where competition is relatively scarce. This approach clearly resonated with investors,” said Jennifer Cho Rinehart, CEO of Acalyx Advisors.

© 2017 Private Equity Professional | June 19, 2017