Archives for September 15, 2017

MSD Partners Acquires Ring Container

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MSD Partners has agreed to buy Ring Container Technologies, one of the largest plastic container manufacturers in North America, from Carl Ring and his family.

Ring Container is a blow molder of high-density polyethylene (HDPE) and polyethylene terephthalate (PET) plastic bottles that are sold to the food service, retail food and other end-use markets. Since its founding in 1968, the company has become one of the largest plastic container manufacturers in North America. Ring employs more than 700 people throughout its headquarters and manufacturing locations in 17 cities across the US, Canada and the UK. The company is headquartered 35 miles east of Memphis in Oakland, TN (www.ringcontainer.com).

Upon closing of the transaction in the fourth quarter, Ring will continue to be led by CEO Ben Livingston and his executive team, who will retain their ownership interests. Rapac, a wholly-owned subsidiary of Ring and the largest recycler of polystyrene in the US and a provider of engineered resins for a variety of end-use applications, is included in the acquisition.

“Ring fits seamlessly with MSD Partners’ strategy to invest for the long term in companies that are stable, in industries that are thriving, and in management teams that are able to generate growth,” said Kevin Brown, a Managing Director in the Private Capital Group at MSD Partners. “Everything at Ring is best in class – from the way the teams execute projects, to the overall financial profile. We look forward to growing with this team.”

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.

The buy of Ring is the latest control investment by MSD Partners and follows its recently completed acquisition of Hayward Industries, an Elizabeth, NJ-based manufacturer of residential and commercial pool equipment and industrial flow control products, in partnership with CCMP Capital Advisors and Alberta Investment Management Corporation.

“Throughout the due diligence process, we maintained a commitment to identifying a new, long-term owner who appreciated Ring’s culture and other qualities that have been fundamental to our growth into an industry leader,” said Carl Ring, Chairman. “MSD Partners not only is an organization that we respect, but it is a seamless fit with our culture and the best possible owner to move our company forward.”

“The acquisition comes at a perfect time for Ring,” said Ben Livingston, CEO of Ring. “MSD Partners believes fully in what we are doing, and will provide the needed capital so that we can continue to invest in innovation, best-in-industry technology platforms, and world-class manufacturing.”

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 with an additional office in London (www.msdprivatecapital.com).

Ring Container was advised by BMO Capital Markets.

© 2017 Private Equity Professional | September 15, 2017

Continental Buys Satellite Vending

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Continental Services, a portfolio company of New Heritage Capital, has acquired Satellite Vending Company, a subsidiary of VendTek Wholesale Equipment. This is the first add-on acquisition completed by Continental since being acquired by New Heritage in February 2017.

Satellite Vending is a provider of vending, micro-market and office coffee services to more than a hundred businesses, universities and institutions throughout Southeast Michigan. The company’s state-of-the-art vending machines are all connected via cellular technology which provides the company with a 24 hour live view of the machines from a desk top computer, allowing Satellite to respond quickly to vending replenishment and service needs. Satellite Vending was founded in 1961 and is based 33 miles northwest of Detroit in Wixom, MI. Click HERE for the Satellite Vending webpage.

Continental provides its customers with a range of services, including corporate cafés, grab-and-go markets, vending, office coffee, and special event catering. The company serves more than 700 small and medium-sized businesses, blue-chip corporations, colleges, universities, business and industrial sites, and hospitals and medical centers.   Continental was founded by Jim Bardy in 1989 and is headquartered in Detroit (www.ContinentalServes.com).

“The acquisition of Satellite represents the first of many potential add-on acquisitions for Continental,” said Melissa Barry, a Partner of Heritage. “We look forward to continuing to support the company as they work towards further growth and geographic expansion.”

“Satellite Vending is a perfect complement to Continental’s refreshment services operations,” said Steve LaPorte, President of Continental’s Refreshment Services Division. “Joining forces with Satellite also enhances our ability to reach more customers with our diverse on-the-go refreshment service options.”

New Heritage invests minority or majority equity in companies with minimum revenues of $30 million and at least $5 million of EBITDA. Sectors of interest include aerospace, business services, consumer products, distribution, education and training, food and beverage, healthcare and healthcare services, industrial and infrastructure, manufacturing, pet products and services, specialty chemical, and test and measurement. Heritage was founded in 2006 and is headquartered in Boston (www.newheritagecapital.com).

© 2017 Private Equity Professional | September 15, 2017

AEI Completes Buy of CDI

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AE Industrial Partners (AEI) has closed its acquisition of publicly-traded CDI Corp., a provider of engineering, information technology, and staffing services, for approximately $157 million.

CDI (NYSE: CDI) is a provider of engineering, information technology, and staffing services to customers in multiple industries, including aerospace, chemicals, energy, industrial equipment, infrastructure, and technology, as well as municipal and state governments and the US Department of Defense. According to the most recent financial information available, the company has TTM revenues of $818 million and a negative TTM EBITDA of $8 million. CDI is headquartered in Philadelphia (www.cdicorp.com).

“We are excited to partner with CDI’s leadership team and market-leading brand,” said Michael Greene, Managing Partner of AEI. “We believe that the company’s capabilities and reputation, combined with AEI’s deep operating expertise in engineering, IT solutions, and human capital management, will allow the company to expand and strengthen its relationships and its value proposition to key customers.”

AEI invests in the aerospace, power generation and specialty industrial sectors with a specific focus on technical manufacturing, distribution and supply chain management, MRO (maintenance, repair and overhaul) and industrial service-based businesses.  Typical company targets will have from $50 million to $500 million of revenue. The firm is headquartered in Boca Raton (www.aeroequity.com).

Houlihan Lokey was the financial advisor to CDI and Lincoln International was the financial advisor to AEI. Kirkland & Ellis provided legal counsel to AEI.

© 2017 Private Equity Professional | September 15, 2017

Monomoy Closes on Buy of West Marine

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Monomoy Capital Partners has completed its take private of West Marine, an omni-channel specialty retailer, for approximately $337 million. Monomoy acquired West Marine through its third fund, Monomoy Capital Partners III LP, which close in June 2016 with $767 million of capital.

West Marine (NASDAQ:WMAR) is the largest specialty retailer of boating supplies and accessories, with more than 249 stores located in 37 states and Puerto Rico. The company carries more than 175,000 aftermarket products, ranging from rope (its original product – see below), to the latest in marine electronics, technical apparel, footwear and accessories. In addition to its retail stores and Port Supply wholesale divisions, the company also sells through its mail order and an e-commerce divisions. The company, led by CEO Matt Hyde, has more than 4,000 employees and is headquartered south of San Jose in Watsonville, CA (www.westmarine.com).

In 2016 West Marine had total revenues of $702 million and an EBITDA of $37 million which equals a 9.1x purchase price multiple and .48x multiple of 2016 revenues.

Randy Repass, Chairman of the Board, founded the company in a garage in 1968 as a mail order seller of nylon rope under the name West Coast Ropes. The fledgling company opened its first store in Palo Alto in 1975 and began stocking other boating supplies such as anchors and fenders. In 1977, the company acquired some of the assets of Boston-based West Products, then a well-known mail-order business, and changed its name from West Coast Ropes to West Marine Products. In 1987, the company introduced its first master catalog— 330 black-and-white pages packed with boating gear. The company went public in 1993 and merged with one of its oldest competitors, E&B Marine, in 1996.  In 2003 West Marine acquired the retail and catalog divisions of long-time competitor BoatUS.

“We are excited to welcome West Marine to the Monomoy portfolio,” said Daniel Collin, Monomoy’s Co-Chief Executive Officer. “We have long admired West Marine and the unique value the company provides for its loyal customers and world class associates. We look forward to working with the company’s management team to ensure that West Marine continues to lead the industry.”

Monomoy makes control investments of debt and equity in companies with at least $150 million in sales, $15 million of EBITDA, and enterprise values of up to $500 million. Sectors of interest include industrial, distribution, and consumer. The firm is headquartered in New York (www.mcpfunds.com).

Monomoy’s acquisition of West Marine marks the firm’s third middle market investment of 2017, following the February 2017 acquisitions of Asheboro, NC-based Klaussner Furniture Industries, a manufacturer and distributor of furniture and furniture components; and Friedrich Holdings, a San Antonio, TX-based manufacturer of air-conditioning products for consumers and commercial end users.

Bank of America and Pathlight Capital provided financing to back the buy of West Marine. Guggenheim Securities was the financial advisor to West Marine and Jefferies was the financial advisor to Monomoy. Kirkland & Ellis provided Monomoy with legal counsel and Grant Thornton provided financial and accounting diligence.

© 2017 Private Equity Professional | September 15, 2017

Andy Greenberg Joins TM Capital

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Andrew Greenberg has joined TM Capital as a Senior Advisor. Mr. Greenberg, who is also the CEO of GF Data, will be based in TM’s New York office.

“We’re very pleased to welcome Andy to the TM Capital team,” said Jim Grien, President and CEO of TM Capital. “Andy brings us decades of transactional experience and a wealth of relationships for which the TM Capital platform is well matched. Most importantly, Andy shares our firm’s unrelenting commitment to client care and pursuit of extraordinary outcomes. His leadership role in many transformative M&A and financing engagements spanning a wide range of industrial and consumer clients speaks volumes for Andy’s expertise and creativity.”

“I’ve known TM Capital for some time as a firm distinguished by the esprit de corps fostered by its partners, by its disciplined focus in selected industry areas, and by its ability to produce superior outcomes for clients in those industries. I’m delighted to be part of the team,” said Mr. Greenberg.

TM Capital advises clients on mergers and acquisitions, debt and equity financings, minority and majority recapitalizations, restructurings, and advisory services including takeover defense, fairness opinions and solvency opinions, and valuations. The firm’s industry specialties include business services, consumer and retail, healthcare, industrial, technology, and technology-enabled services.

Mr. Greenberg is a frequent contributor to Private Equity Professional and is also the CEO of GF Data, a collector and publisher of confidential data on private equity-backed transactions in the $10 million to $250 million value range. Prior to joining TM Capital, Mr. Greenberg oversaw M&A practices at Brown Brothers Harriman, Commerce Capital Markets and Fairmount Partners.  Mr. Greenberg holds an AB from Brown University and a JD from Harvard University.

TM Capital is a partner-owned investment banking firm based in New York, Boston and Atlanta, which has completed over 300 transactions with a combined value in excess of $20 billion since its founding in 1989. The firm is a member of Oaklins, a mid-market investment bank with over 700 professionals in over 60 major financial center offices (www.tmcapital.com).

© 2017 Private Equity Professional | September 15, 2017