Archives for August 22, 2017

Pfingsten Expands Packaging Platform

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Oliver Printing & Packaging, a portfolio company of Pfingsten Partners since May 2016, has acquired DISC Graphics.

DISC is a manufacturer of folding carton packaging, micro-fluted corrugated boxes and pressure sensitive labels that are used in the pharmaceutical, food and beverage, consumer products and health and beauty markets. The company is headquartered on Long Island in Hauppague, NY (www.discgraphics.com).Oliver Printing & Packaging is a manufacturer of marketing collateral, packaging and point-of-purchase displays used in the health and beauty, consumer goods, financial services, building products and specialty food and beverage end-markets. The company, led by CEO Dan Rodenbush, is headquartered near Cleveland in Twinsburg, OH (www.oliverprinting.com).

“The acquisition of DISC greatly strengthens our platform, bringing new markets, customers, capabilities and capacity,” said Mr. Rodenbush. “DISC is a highly complementary business with a similar customer-centric culture and market-leading production capabilities.” DISC will continue to operate from its current Hauppague, NY facility as part of the Oliver platform.

The buy of DISC is the second add-on acquisition for the company under Pfingsten ownership. In August 2017, Oliver acquired Pohlig Packaging, a Richmond, VA-based manufacturer of folding cartons, micro-fluted corrugated boxes and setup boxes that are used in the food and grocery, consumer products, automotive aftermarket and healthcare markets (www.pohlig.com).

“We are thrilled to join forces with Oliver and Pohlig,” said Don Sinkin, CEO of DISC. “Together, we will be able to better serve our combined customer base with additional resources, equipment and capabilities.”

Pfingsten invests in middle-market manufacturing, distribution and business services companies that have transaction values ranging from $15 million to $100 million, revenues from $20 million to $150 million, and EBITDA between $3 million and $12 million. Since completing its first investment in 1991, Pfingsten has acquired 132 such companies through five funds with total commitments of $1.3 billion. The firm is based in Chicago with representative offices in India and China (www.pfingsten.com).

© 2019 Private Equity Professional | January 4, 2019

“Unsustainable” Market Conditions Sustained for Another Quarter!

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The hallmarks of this extended seller’s market – unprecedented valuations and aggressive debt availability being driven by non-bank lenders – continued unabated in the second quarter of 2017, according to GF Data’s just-released August report.

201 private equity groups and other deal sponsors reported to the data tracking firm on 45 transactions completed in the $10 million to $250 million Total Enterprise Value (TEV) range, with valuations of 3-15x Trailing Twelve Months (TTM) Adjusted EBITDA.   The average valuation was 7.4x – the highest quarterly mark in the 15-year history of the data base.

“Valuations for the year-to-date averaged 6.9x, in line with last year’s average and continuing the steady upward movement of the past five years,” said Andrew Greenberg, GF Data’s CEO.  “While this market continues to fend off any expectations of cyclicality, it is also crystal clear what buyers are prepared to pay for.  The premiums for above-average financial quality, size and other desirable characteristics have never been higher.”

According to B. Graeme Frazier, IV, GF Data’s Co-Founder and Principal, average total debt averaged 4.2x for the quarter, also a high.  “There’s no sign of an ease up in leverage finance.  We’re seeing particularly strong debt utilization in deals with unitranche financing and in larger transactions being undertaken as add-on acquisitions rather than stand-alone platforms.”

“The three biggest contributors to increases in leverage multiples over the past several months are the significant capital debt providers need to deploy; the lenders’ fear of losing market share; and flight to quality. The data tends to support what we are seeing in the marketplace,” said Ben Marzouk, Managing Director and New York Group Head for Monroe Capital.

GF Data provides reliable external information for use in valuing and assessing M&A transactions to private equity firms, investors, lenders and other users.  The firm collects and publishes proprietary transaction information from private equity groups on a blind and confidential basis.  The pool of active contributors comprises 201 private equity firms, mezzanine groups and other financial sponsors. Data contributors and other subscribers receive four products: (1) a quarterly report containing high-level valuation, volume and leverage data; (2) a quarterly supplement offering detailed information on debt and capital structure trends; (3) a semi-annual supplement on indemnification cap, escrow and other details; and (4) continuous access, through GF Data’s secure website, to detailed valuation data organized by NAICS code.

For information on subscribing or on contributing data as a private equity participant, please contact Bob Wegbreit at [email protected] or at 610-616-4607.

GF Data is based near Philadelphia in West Conshohocken, PA (www.gfdataresources.com).

© 2017 Private Equity Professional | August 22, 2017

Brynwood Exits Back to Nature Foods

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Brynwood Partners has signed an agreement to sell Back to Nature Foods Company to publicly-traded B&G Foods for $162.5 million in cash. The transaction is expected to close by the end of September.

Brynwood acquired a controlling stake in Back to Nature in October 2012 through a joint venture with Mondelez International, a snack and food brands business that was spun off of Kraft Foods in 2012. In 2013, Mondelēz contributed the SnackWell’s brand to the joint venture.

B&G Foods expects that after a six-month integration period, Back to Nature will generate annual revenues of approximately $80 million and adjusted EBITDA of approximately $17 million. This will result in a purchase price multiple of approximately 9.6 times adjusted EBITDA.

Back to Nature’s products include cereal, cookies, crackers, chocolate-dipped pretzels, granola, nuts & trail mix, soup, and juices. The company’s products are widely distributed in the grocery, natural, club, mass and other channels. The Back to Nature brand was founded in 1960 and the SnackWell’s brand was launched by Nabisco in 1992 as a line of reduced-fat and fat-free cookies and crackers.  Back to Nature is headquartered in Naples, FL (www.backtonaturefoods.com) (www.snackwells.com).

“We are delighted to announce the sale of Back to Nature to B&G Foods, a leading publicly-traded packaged foods company,” said Hendrik Hartong III, Chairman and CEO of Brynwood Partners.  “We are very pleased with the outcome of this transaction as we achieved a terrific result for both Brynwood and Mondelēz.”

During the term of Brynwood’s ownership of Back to Nature the company expanded its sales and profitability through product innovation, expanded distribution and operational improvements. “The unique joint venture with Mondelēz showcased Brynwood’s investment and operational strengths in consumer corporate carve outs,” added Mr. Hartong. “We appreciate the confidence Mondelēz has bestowed in our firm and we enjoyed working with them as a true partner in the joint venture.”

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).

“This exit reaffirms Brynwood Partners’ position as the leading lower middle market buyout firm for corporate carve outs in the consumer sector.  We are grateful to Mondelēz for the support that they provided to the partnership throughout the investment,” said Ian MacTaggart, President and COO of Brynwood Partners and Chairman of Back to Nature.

B&G Foods (NYSE:BGS) manufactures, sells and distributes a portfolio of branded shelf-stable and frozen foods across the United States, Canada and Puerto Rico. The company had revenues of approximately $1.4 billion in 2016 and is headquartered in Parsippany, NJ (www.bgfoods.com).

Houlihan Lokey (www.hl.com) was the financial advisor to Back to Nature.

© 2017 Private Equity Professional | August 22, 2017

JW Hill Buys Bandy Machining

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JW Hill Capital has acquired Bandy Machining, a maker of precision-machined aircraft hinges, from GKN Aerospace.

Bandy Machining manufactures complex, close-tolerance hinges that are used on numerous commercial and military platforms. The company’s expertise includes proprietary drilling processes that allow Bandy to manufacture long hinge lengths at very tight tolerances across a variety of materials including titanium, aluminum, stainless steel and bronze. Bandy produces over 100,000 hinges per year. The company, led by General Manager Steve Alexander, is headquartered near Los Angeles in Burbank, CA (click HERE for the Bandy website).

GKN is a British multinational automotive and aerospace components company headquartered near Birmingham in Redditch, UK (www.gkn.com).

JW Hill Capital invests in lower-middle market manufacturing, value-added distribution, and industrial service companies that have between $2 million and $10 million of EBITDA. The firm is led by its Managing Partner John Hill and is based in Newport Beach, CA (www.jwhill.com).

“We are excited about partnering with the team to build on the legacy of the Bandy brand,” said Mr. Hill. “We look forward to expanding the capabilities of the business to serve the aerospace hinge market.”

DA Davidson (www.dadavidson.com) served as the financial advisor to JW Hill Capital on this transaction.

© 2017 Private Equity Professional | August 22, 2017

Artemis Acquires StanChem

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Artemis Capital Partners has acquired StanChem, a specialty chemicals manufacturer from its CEO and owner Jack Waller.

StanChem develops and manufactures emulsion polymers, specialty adhesives, and intumescent coatings (substances that swells as a result of heat exposure) that are used in a wide range of markets including paints, paper and packaging, and building products. In addition to its specialty polymers business, StanChem produces and markets a line of flame retardant products – used with structural steel, concrete, wood, wallboard, plaster and other non-ferrous substrates – under the Albi brand name. StanChem, founded in 1968, has over 125,000 square feet of production space and is headquartered in East Berlin, CT (www.stanchem-inc.com) (www.albi.com).

“StanChem’s existing process technology is both formidable and flexible and we plan to further invest in our people, technology, and equipment to realize StanChem’s full potential as a world-class manufacturer in the specialty polymers industry,” said Stephen McGuff, StanChem’s Vice President of Operations. “After we have implemented our investment plans, we will have significantly increased the company’s capacity and capabilities.”

Artemis Capital Partners invests in companies with revenues of $5 million to $50 million and EBITDA of $1 million to $10 million. Sectors of interest include manufacturers of differentiated industrial technologies, including specialty chemicals and materials. The firm was founded in 2010 and is based in Boston (www.artemislp.com).

© 2017 Private Equity Professional | August 22, 2017