Archives for August 7, 2017

How Supply Chain Initiatives Create Value and Enhance ROI for PE Firms

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Managing and operating partners are continually tasked with the job of improving EBITDA. An oft overlooked area usually ripe with optimization opportunity is the supply chain. Many times, it’s difficult to gain a clear big-picture supply chain view from one end to the other. The complexities can hide redundancies, outdated and inefficient practices and processes, and areas where technology could be implemented for overall benefit – including the bottom line.

Due Diligence: Identifying weaknesses
LynnCo uses IT-enabled transparency to seek out these inefficiencies that may be hard for private equity firms, manufacturers, and distributors to inherently notice or fully understand. It also helps draw a bigger picture, allowing you to see system flaws inside and outside a company. In fact, today’s supply chain management IT solutions deliver useable data, enabling agile and informed decision-making that can make the difference between being profitable and being defunct. Here are just a few of the benefits that can be realized from the application of LynnCo’s technology driven solutions:

  • Improved business-to-business (B2B) collaboration
  • Reduction of supply chain uncertainty
  • Prevention of lead-time fluctuations, disruptions, reduction, and prevention
  • End-to-end inventory visibility positioning — in motion, at rest, and at expected waypoints

Goals that Boost EBITDA
After you have identified your weaknesses, you should create actionable solutions to work towards keeping in mind five key improvement goals that boost EBITDA. Successfully addressing these can help streamline your system and reduce costs.

Consider these top five supply chain improvement goals:

  • Customer Service — Increase customer satisfaction while reducing inventory.
  • Supplier Accountability — Ensure supplier reliability and reduce risk.
  • Transportation — Reduce logistics costs and centralize a transportation solution.
  • Warehouse Overhead — Improve warehouse efficiency and reduce overhead.
  • Supply Chain Transparency — Deliver improved visibility across your divisions.

Value Creation: Improving ROI
What if your firm had a partner that could combine a consultative approach with the ability to operationalize tailor-designed solutions? LynnCo Supply Chain Solutions has proven success applying consulting, process engineering and operational rigor to portfolio companies whose supply chains are disrupted by the aftermath of an acquisition, reorganization or consolidation.
In order to rapidly ensure investors have in fact invested correctly, the experts of LynnCo’s Professional Service Group (PSG) provide an analytical assessment. In comparing metrics against the industry while remaining all-inclusive, a quantitative evaluation of performance is necessary. The three central stages of the investment assessment are: Analyze and Support, Implementation, and Accelerate Opportunities.

Analyze and Support: LynnCo’s PSG will perform an initial comprehensive supply chain health check and assess overall investment. This allows us to best understand the company’s priorities and develop a strategic roadmap, deliver a working capital performance review, and deliver a working capital performance review.

Implementation: The first 180 days will include implementing quick-hits of the supply chain health check, followed by training, mentoring, and developing existing new staff. As well as, facilitating change through skillful project management and establishing metrics, benchmarks, measurement systems, and KPI formulation.

Accelerate Opportunities: In this stage, we perform tactical execution of supply chain operational best practices, establish improvements to balance costs, and protect core revenue drivers. As well as, cultivate top-line growth and perpetuate bottom-line savings, initialize new growth ventures, and recapture lost opportunities.

Results
LynnCo’s PSG professionals examine a roadmap for establishing the efficient flow of products, people, and information in order to not only meet, but exceed the revenue requirements of private equity partners.

LynnCo Supply Chain Solutions is headquartered in Tulsa (www.lynnco-scs.com). For more information contact Lesli Dinsmore at [email protected].

© 2017 Private Equity Professional | August 7, 2017

Brynwood Acquires Cold Spring

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Brynwood Partners, through its seventh fund, has acquired Cold Spring Brewing Company from its current owner, the Lenore family.

Cold Spring is a beverage manufacturer that produces energy drinks, carbonated flavored waters and brews craft beers.  The company primarily manufactures products, both non-alcoholic and alcoholic beverages and beer, for other companies’ proprietary brands and retailers’ private labels.  Cold Spring also brews beer under its own brand, Third Street Brewhouse, for distribution locally in Minnesota and Wisconsin.

Cold Spring has $60 million in annual revenues and employs approximately 350 people. The company was founded in 1874 and is headquartered 80 miles northwest of Minneapolis in Cold Spring, MN (www.coldspringbrewery.com).

“We are pleased to announce the acquisition of Cold Spring,” said Henk Hartong III, Chairman and CEO of Brynwood Partners.  “The well-run facilities and exciting growth plans for the company represent a great investment opportunity for Brynwood Partners. While Cold Spring will be operated as a standalone company, we believe it will benefit greatly from the scale and national distribution and manufacturing foot print of Brynwood Partners’ Harvest Hill Beverage Company investment.”

Harvest Hill Beverage Company was formed by Brynwood VII in July 2014 to acquire the Juicy Juice brand from Nestlé. In March 2015, Harvest Hill acquired American Beverage Corporation (ABC) from Wessanen, a publicly-traded food and beverage company based in Holland.  With the ABC acquisition, the company added the Little HUG juice brand and Daily’s Cocktails brand. In October 2016, Harvest Hill acquired Faribault Foods’ juice pouch manufacturing facility in Elk River, MN. Then, in December 2016, the company acquired the Nutrament energy drink brand from Nestlé.  In February 2016, Brynwood acquired Sunny Delight Beverages from J.W. Childs Associates and in May 2017 merged the company into Harvest Hill.  Today, Harvest Hill operates seven manufacturing facilities located across the US and continues to grow its branded, private label and co-manufacturing businesses both organically and through strategic add-on acquisitions.  Harvest Hill is headquartered in Stamford, CT (www.harvesthill.com).

“On behalf of Brynwood Partners, I would like to express my sincere gratitude to the Lenore family for working with us on this transaction,” said Ian MacTaggart, President and COO of Brynwood Partners.  “This marks Brynwood VII’s sixth investment in the beverage sector and is a significant investment for our firm.  We look forward to supporting Cold Spring’s loyal employees and growing its operations in Cold Spring, MN, where it has resided for 143 years and plays such an important role in the community.”

Brynwood Partners is an operationally-focused private equity firm that makes control investments in consumer focused lower middle-market companies. The firm has $725 million of capital under management and is based in Greenwich, CT (www.brynwoodpartners.com).

Cascadia Capital (www.cascadiacapital.com) was Cold Spring’s financial advisor on this transaction.

© 2017 Private Equity Professional | August 7, 2017

Swander Pace Adds to Captek Softgel

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Captek Softgel International, a portfolio company of Swander Pace Capital since December 2015, has acquired J+D Labs Pharma Manufacturing.

J+D Labs is a contract manufacturer of more than 1,000 formulations of softgels, capsules, tablets and powders. The company has more than 300 employees and has a 135,000-square-foot facility which can fulfill orders ranging from 100,000 to one million softgels, capsules and tablets.

J+D Labs was founded in 1989 by husband and wife Kiran and Hema Majmudar and was named after their sons Jay and Dev. The company is based north of San Diego in Vista, CA (www.jdlabs.com).

Captek Softgel is a contract manufacturer and distributor of softgels for vitamin, mineral and supplement (VMS) brands. The company currently services more than 200 brands in 20 countries. Captek Softgel has encapsulation lines that operate 24/5 and are capable of producing over three billion softgels annually. The company’s facility has approximately 163,000 square feet of production, analytical laboratory, pilot laboratory, and warehousing space and is FDA registered, audited and compliant. Captek is led by its CEO David Wood and is headquartered south of Los Angeles in Cerritos, CA (www.capteksoftgel.com).

“We have long regarded J+D Labs’ reputation and the significance of what they bring to the table as a leader in the industry,” said Mr. Wood. “J+D Labs’ extensive experience manufacturing a wide-range of softgels, specialized tablets, capsules, and powder formulations was a perfect complement to Captek’s offerings.”

Swander Pace invests in middle-market consumer products companies including branded and non-branded manufacturers, marketers, and distributors that sell through a range of retail and institutional channels. The firm generally targets companies that have up to $500 million in revenues.  The firm has raised over $1.3 billion of equity capital through five private equity funds and has led investments in more than 45 consumer products companies.  Swander Pace was founded in 1996 and has offices in San Francisco; Bedminster, NJ; and near Toronto in Oakville, ON (www.spcap.com).

© 2017 Private Equity Professional | August 7, 2017