Archives for July 27, 2017

WestView Invests in Abacus Group

by

WestView Capital Partners has made a minority growth investment in Abacus Group, a provider of managed IT services.  Abacus will continue to be majority-owned and operated by the company’s senior management team.

Abacus Group is a provider of managed IT services to the financial services industry with a specific focus on hedge funds and private equity funds. Abacus Group was founded in 2008 and is based in San Francisco with additional offices in the major financial hubs of New York, Boston, Greenwich, Dallas, Charlotte, Los Angeles, and London. Abacus Group is led by its co-founder and CEO Chris Grandi (www.abacusgroupllc.com).

The company added 51 new clients in the first half of 2017 and continues to grow at a rapid pace. “We see a significant opportunity in front of us right now,” said Mr. Grandi. “Investment managers rely heavily on technology but don’t want to be in the IT business. They are searching for best-of-breed providers, like Abacus, who take over their day to day IT needs while ensuring their environment is highly secure and available. Our partnership with WestView will provide us with additional capital and resources to continue to evolve the Abacus platform and execute on our long-term growth strategy.”

WestView Capital Partners makes majority and minority investments of $10 million to $50 million in lower middle market growth companies.  Sectors of interest include healthcare services, business and technology services, software, industrial/manufacturing, and consumer/retail.  Target companies will have operating profits between $3 million and $20 million.  WestView manages approximately $1 billion in capital across three funds and is headquartered in Boston (www.wvcapital.com).

“We look forward to supporting Abacus’ management as they continue to capitalize on the growing opportunity for outsourced IT solutions within the financial services sector,” said Rick Williams, Managing Partner at WestView who will join the board of Abacus. “The company’s outstanding reputation and best-in-class offering coupled with a high-touch approach to customer service has enabled it to expand rapidly within the sector.”

Abacus Finance (not affiliated with Abacus Group) was the Administrative Agent and Sole Lead Arranger of senior secured credit facilities to support WestView’s investment in Abacus Group. “We have enjoyed a long-term relationship with Abacus Finance, and once again they took the time to fully understand the cash flow needs of the business and provided a financing solution to support growth,” said WestView Principal Greg Thomas. Abacus Finance team members involved in the transaction included Sean McKeever and Brian Green.

“Abacus Group is an established leader in the managed IT services industry serving the hedge fund and financial institutions market,” said Tim Clifford, President and CEO of Abacus Finance. “We were extremely impressed with the senior management team and are excited to be their financing partner as they embark on the next stage of growth. As in other transactions, our success was a function of our speed, cash-flow flexibility, and certainty of close – key aspects of what we call our Total Partnership Approach.”

Abacus Finance provides cash flow senior financing to private equity-sponsored, lower-middle market companies that have EBITDA between $3 million and $15 million. Debt facilities can be as large as $60 million with a typical hold size ranging from $10 million to $30 million.  Abacus was formed in June 2011 and is an affiliate of New York Private Bank & Trust which was founded in 1850.  Abacus is based in New York (www.abacusfinance.com).

New York-based Drake Star Partners (www.drakestar.com) was the financial advisor to Abacus Group on the transaction.

© 2017 Private Equity Professional | July 27, 2017

Arlington Adds Two Pieces to Avalign

by

Avalign Technologies, a portfolio company of Arlington Capital Partners, has completed the acquisitions of Thortex and Millennium Surgical. Arlington Capital acquired Avalign, a manufacturer of orthopedic implants and instruments, from RoundTable Healthcare Partners in June 2015.

Thortex is a provider of porous coatings, metal injection molding services, CNC machining, finishing and assembly services to medical device OEMs. Thortex is one of the only companies in the world able to provide porous coating for use in titanium and cobalt-chrome orthopedic implants. The company was founded in 1990 and has a 40,000 square foot facility in Portland, OR (www.thortexinc.com).

Millennium is a distributor of specialty surgical instruments to hospital and ambulatory surgical center customers. The company has more than 17,000 branded SKUs across a variety of clinical areas including neurosurgery, ophthalmics and orthopedics. Millennium is based near Philadelphia in Narberth, PA (www.surgicalinstruments.com).

“Thortex and Millennium nicely complement and expand the manufacturing technologies and services that Avalign offers and provide us with the ability to continue gaining share with our customers,” said Forrest Whittaker, CEO of Avalign Technologies.

Avalign Technologies is a provider of coatings and is a full-service precision manufacturer of implants, specialty instrumentation, cutting instruments, and delivery systems used in the orthopedic medical device and specialty surgical markets. The company operates under five divisions: Precision Machined Instruments; Implants; Cutting Instruments; German Specialty Instruments; and Cases & Trays. Avalign Technologies is headquartered north of Chicago in Bannockburn, IL (www.avaligntech.com).

“The incorporation of Thortex and Millennium into the Avalign platform adds new and proprietary capabilities which enhance Avalign’s strategic position in the marketplace,” said Matt Altman, a Managing Partner at Arlington Capital. “The increased scale and breadth of services and technologies provided by these acquisitions will accrue to the benefit of Avalign’s customers and bolster Avalign’s already impressive growth.”

Arlington Capital Partners has $2.2 billion of committed capital and invests in buyouts and recapitalizations of companies valued from $50 million to $500 million. Sectors of interest include government services and technology; aerospace and defense; healthcare; and business services and software.  The firm is investing out of its fourth fund which closed in July of 2016 with $700 million of capital. Arlington Capital is based in Chevy Chase, MD (www.arlingtoncap.com).

“The proprietary technologies developed by both Thortex and Millennium represent truly unique offerings in the market,” said Malcolm Little, a Principal at Arlington Capital. “We are pleased to complete these acquisitions and continue to pursue additional opportunities to strategically scale our business.”

© 2017 Private Equity Professional | July 27, 2017

ORIX and Aperion Building RoadSafe

by

RoadSafe Traffic Systems, one of the nation’s largest providers of traffic control and pavement marking services, has acquired Beth’s Barricades. ORIX Capital Partners (ORIX CP) acquired RoadSafe in February 2016 from Falcon Investment Advisors and Aperion Management. Aperion continues to have a minority equity interest in the company.

Beth’s Barricades provides contractors, municipalities and developers throughout Pennsylvania and Maryland with traffic control services and products which include traffic signals, message and arrow boards, speed trailers, truck-mounted attenuators and steel barriers along with smaller items such as channelizers and signs. The company, led by President Beth Nury, was founded in 2005 and is based north of Pittsburgh in Gibsonia, PA. The company has additional facilities in York and Watsontown, PA (www.bethsbarricades.com).

RoadSafe Traffic Systems is the largest and only national provider of pavement marking, sign installation, and traffic control services and equipment to roadway construction, and railroad and utility industries in the US. The company operates from 50-plus locations, enabling it to serve projects of any size in over 40 states. RoadSafe is led by CEO David Meirick and is headquartered in Chicago (www.roadsafetraffic.com).

The acquisition of Beth’s Barricades will enable RoadSafe to increase its presence in Pennsylvania. The management team and workforce of the company are expected to join RoadSafe which will now have nearly 1,900 employees.

This is the second add-on acquisition for RoadSafe since being acquired by ORIX CP. In October 2016, RoadSafe acquired Protection Services Inc. (PSI) which offers traffic control and pavement marking services to private contractors, federal agencies, state transportation departments, governmental entities and utilities. The company is based just outside of Harrisburg in Lemoyne, PA (www.protectionservices.com).

“The acquisition of Beth’s Barricades, in addition to the acquisition of PSI, presents a unique opportunity for RoadSafe to expand and leverage its footprint in the Northeast, create economies of scale and open new business opportunities for its services,” said Christopher Suan, Senior Managing Director for ORIX CP. “Due to strong federal and state funding, Pennsylvania is one of the leading states in infrastructure spending. RoadSafe is well-positioned to work with its partners in the region to improve infrastructure.”

ORIX CP (www.orixcapitalpartners.com) invests from $50 million to $150 million of equity capital per transaction in North America based middle-market companies.  The group will invest across a range of industries and special situations. Areas of specific interest include business services, retail, consumer, industrials, telecommunications and technology. ORIX CP is led by President and CEO Yoshiteru “Terry” Suzuki, who previously served as Co-CEO of Cerberus Japan from June 2002 to March 2015, along with Mr. Suan.

Aperion Management, which has been an investor in RoadSafe since its inception in 2007, invests in small to midsize businesses valued between $15 million and $150 million. The firm is based in New York (no website found).

© 2017 Private Equity Professional | July 27, 2017

MPE Adds to Polytek

by

Polytek Development, a portfolio company of MPE Partners, has acquired Raw Material Suppliers, a distributor of private label RTV (room temperature vulcanization) silicone, urethane, mold release, and adhesive products.

Raw Material Suppliers was founded by Steve Levine in 1984 and is headquartered near San Diego in San Marcos, CA. With the closing of the transaction, Mr. Levine will serve as a senior sales executive of Polytek (www.rawmaterialsuppliers.com)

Polytek is a manufacturer of specialty polymers including polyurethane elastomers and casting resins, silicones, epoxies, and latex. These products are used primarily in mold making and casting applications in industrial, construction, entertainment, fine arts, and technology sectors. Polytek, led by CEO Jonathan Kane, is headquartered north of Philadelphia in in Easton, PA (www.polytek.com).

“We saw a great fit between Polytek and Raw Material Suppliers and believe the synergies between the two will accelerate the growth of the combined company,” said Graham Schena, Principal at MPE.

MPE invests in lower middle market companies that are valued from $25 million to $150 million and have EBITDAs between $5 million and $20 million. Sectors of interest include high-value manufacturing and industrial services. The firm has offices in Cleveland and Boston (www.mpepartners.com).

Atlanta-based Genesis Capital (www.genesis-capital.com) was the financial advisor to Polytek.

© 2017 Private Equity Professional | July 27, 2017

Private Advisors Hits Hard Cap

by

Private Advisors has closed its oversubscribed seventh private equity fund at the hard cap of $350 million. Similarly, the group’s earlier fund closed with $350 million in commitments in June 2015.

Fund VII will invests in lower-middle market buyout, growth and distressed private equity funds (typically less than $750 million in size), and will also make select equity co-investments and secondary investments.

Fund VII’s investor base includes institutional investors such as pension plans, foundations, endowments, insurance, and family offices. Private Advisors’ employees and its parent organization, New York Life Insurance Company, also made meaningful capital commitments.

“We are grateful to our limited partners for their continued support as almost 70 percent of the Fund VII came from existing investors.  We are also very excited to gain many new investors and further expand our limited partner base outside the US,” said Chris Stringer, President of Private Advisors.

“We are pleased to have already committed over 50 percent of the Fund VII to high quality and access constrained investments, and we continue to see compelling opportunities ahead,” said Todd Milligan, Partner on the private equity team. “We believe our broad investment platform and longstanding dedication to the small company market provide distinct sourcing, relationship and diligence advantages for our partners.” Private Advisors has invested in the lower middle market since 1997.

Private Advisors is an affiliate of New York Life Insurance Company and is based in Richmond, VA with additional offices in New York, Cleveland and Austin (www.privateadvisors.com).

© 2017 Private Equity Professional | July 27, 2017