Archives for August 8, 2017

Arsenal to Buy Cyalume

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Publicly-traded Cyalume Technologies has signed an agreement to be acquired by Arsenal Capital Partners for $45 million. The all-cash transaction is expected to close in September 2017. For the trailing twelve months ending March 2017 the company’s revenue was $38.9 million with an EBITDA of $9.4 million.

Cyalume Technologies designs and manufactures non-pyrotechnic tactical products used in military, law enforcement, and safety applications. The company’s products include chemical lights for army, navy, air force, coast guard, military police, fire, and special operations; training and tactical ammunition alternatives; and light sticks for police, fire, and homeland security officials. Cyalume’s specialty products division manufactures chemical products – ranging from simple raw ingredients to finished product formulations to complex high performance polymers – that are used in the pharmaceutical, medical products, cosmetic and commercial markets.

Cyalume, headquartered in Ft. Lauderdale, has manufacturing facilities in West Springfield, MA and Bound Brook, NJ as well as a subsidiary, Cyalume Technologies SAS, located near Marseille in Aix-en-Provence, France (www.getcyalume.com) (www.cyalume.com).

“Cyalume has a strong brand and long-term relationships with blue chip customers,” said Sal Gagliardo, an Industry and Operations Partner at Arsenal. “Given its robust portfolio of technologies, we expect that Cyalume will serve as a platform for further acquisitions in the specialty chemicals and performance polymers sector.”

Arsenal invests in middle-market specialty industrial and healthcare companies that have $100 million to $500 million in enterprise value.  Industries of specific interest include specialty industrials and healthcare companies. Arsenal has $1.7 billion of committed capital under management. The firm was founded in 2000 and has offices in New York and Shanghai (www.arsenalcapital.com).

“Our investment in Cyalume represents an opportunity for Arsenal to leverage its industry knowledge and operating expertise in the formulated materials sector to support the company’s strategy,” said Roy Seroussi, a Principal at Arsenal.

Miami-based investment bank Cassel Salpeter & Co. (www.casselsalpeter.com) was the financial advisor to Cyalume.

© 2017 Private Equity Professional | August 8, 2017

Soundcore Sweeping Up

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Sweeping Corporation of America, a portfolio company of Soundcore Capital Partners since February 2017, has acquired Reilly Sweeping.

Reilly Sweeping provides parking lot and street sweeping services to municipal and business customers located across Pennsylvania, Ohio, Maryland, Washington DC, Delaware, Virginia and New Jersey. The company was founded by Gerald Reilly in 1971 and is based near Philadelphia in Fairless Hills, PA (www.reillysweeping.com).

Sweeping Corporation of America (SCA) provides street, parking lot and construction site sweeping, catch basin cleaning and several ancillary services including pavement maintenance and snow management to state, municipal, commercial, industrial and residential customers throughout the Southeast region of the US. SCA was founded in 1988 and is headquartered in Nashville (www.sweepingcorp.com).

According to SCA, Reilly Sweeping is the Mid-Atlantic region’s largest sweeping provider. “Reilly Sweeping is one of the most respected companies in our industry,” said SCA’s President and CEO Christopher Valerian. “With a majority of its operations contiguous to our existing locations, Reilly solidifies our leading position in these markets and further expands our platform for additional growth opportunities.”

With the acquisition of Reilly Sweeping, SCA now operates a fleet of 350 units through 21 locations, forming the largest independent power sweeping company in the United States. “The addition of Reilly Sweeping brings a multi-state, best-in-class company into our platform and meshes with our buy and build strategy in the power sweeping space. I am very pleased with the progress we have made in acquiring great companies with proven leadership, and look forward to continuing to scale the business,” said Feliks Zarotsky, Managing Partner of Soundcore.

The buy of Reilly Sweeping is the third add-on acquisition completed by SCA since being acquired by Soundcore. The first, Sani-Tech Jetvac Services, a sister company of SCA, was acquired in February 2017 simultaneous with the platform acquisition of SCA. Sani-Tech provides storm and wastewater services, including pipeline clearing, cleaning, vacuuming and video inspection; and the second add-on acquisition was Sky Sweeping, a Louisville-based provider of parking lot, street and industrial sweeping services in the Ohio, western Pennsylvania and southeastern Indiana regions, that was acquired in April 2017.

“Once we identified family-owned and -operated Reilly Sweeping as the next acquisition for our SCA platform, we worked closely with the Reilly brothers – Patrick, Sean and Michael – and existing management to ensure a timely, seamless transition amongst the Reilly Sweeping team and its loyal customers. We are very excited to partner with the team, and to support their continued growth and success as we actively expand our SCA reach,” said Jarrett Turner, Soundcore’s Managing Partner.

Soundcore Capital Partners invests from $2 million to $60 million of control equity in lower middle market companies that are headquartered in the US or Canada. Typical targets will have from $1 million to $10 million in EBITDA. Sectors of interest include services, specialty distribution, and valued added manufacturing. Soundcore was founded in 2015 and is based in New York (www.soundcorecap.com).

© 2017 Private Equity Professional | August 8, 2017

Aperion Adds to Tri Con

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Tri Con Works, a provider of landfill related environmental services and a portfolio company of Aperion Management since 2014, has acquired Diamondback Works, a provider of specialty construction services to the petrochemical industry.

Diamondback Works provides remodel and renovation services including steel erection, process pipe field fabrication and installation, structural foundations, and design & build services. The company, led by President David Chovanec, was founded in October 2000 and is based near Houston in La Porte, TX (no website found).

Tri Con Works is an environmental services provider specializing in the construction and maintenance of landfill gas monitoring, collection and recovery systems, as well as leachate systems.  Landfill gas such as methane is a by-product of the disposal of municipal solid waste in landfills and can lead to the release of greenhouse gases into the atmosphere. The monitoring, collection and recovery of landfill gas is a vital part of waste management from an environmental and safety perspective, and the related conversion of landfill gas into energy is a significant contributor of renewable fuel. Leachate systems collect contaminated liquid materials that have drained from landfills or other stockpiled materials. Tri Con Works was founded in 1998 and is headquartered in Houston (www.triconworks.com).

The acquisition of Diamondback will expand Tri Con’s service offerings beyond its existing environmental services focus. “We are excited to partner with David Chovanec and his team at Diamondback Works,” said Gary Smith a Co-President of Tri Con. “The partnership will create additional opportunities for employees and it will enhance our capabilities to service our customers as well as secure new customers.”

Aperion Management invests in small to mid-size businesses valued between $15 million and $150 million. The firm was founded in 2006 and is headquartered in New York (no website found).

Cadence Bank (NYSE: CADE) (www.cadencebank.com) and Graycliff Partners (www.graycliffpartners.com) provided financing for the transaction.

© 2017 Private Equity Professional | August 8, 2017