Archives for October 4, 2017

Snow Phipps Acquires DecoPac

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Snow Phipps Group has acquired DecoPac, a direct-to-store distributor of decorative baking products used by bakeries, professional cake decorators and baking enthusiasts across the US, Europe and Canada.

DecoPac is a supplier of branded and licensed cake and cupcake decorating products. The company holds licenses to use some of the world’s most recognizable entertainment brands and professional sports leagues which includes popular characters and properties from Disney, Nickelodeon, Mattel, DreamWorks, Marvel Comics, LucasFilm, Warner Bros., Star Trek, Peanuts and professional sports such as from the NHL, NBA, NFL, and MLB.

DecoPac’s products include cake decorating kits, cake decorations, print-on-demand cake decorating systems, pre-cut fondant shapes, pre-rolled fondant sheets, edible cake decorations, food colorings and candles (fondants are edible icings used to decorate or sculpt cakes and pastries).

DecoPac also uses proprietary internet-based technology to enable the ordering of customized baked goods with short turnaround times through in-store kiosks and online ordering software. This includes a proprietary, print-on-demand service called PhotoCake which allows bakeries to print edible customized images onto baked goods. The company was formed in 1982 as an internal supplier of cake decorations to McGlynn’s Bakery stores, a family-owned bakery founded in 1919. DecoPac is headquartered near Minneapolis in Anoka, MN and has an additional facility in the UK (www.decopac.com) (www.cake.com).

As part of the Snow Phipps transaction, Michael McGlynn, DecoPac’s current CEO, has been named non-executive Co-Chairman of the Board and DecoPac’s current President, John Anderson, has been promoted to CEO. “The McGlynn family has been in the bakery business for nearly 100 years starting from our origins as a retail bakery in Minneapolis. The decision to partner with a private equity firm is one that our family members took very seriously,” said Mr. McGlynn. “We are confident that Snow Phipps is the right partner for us given their consumer investing experience and its many resources available to bolster DecoPac’s continued growth. We look forward to a successful partnership with Snow Phipps and I and several of my family members are excited to remain significant shareholders in the business.”

Snow Phipps makes control investments in companies primarily located in North America with enterprise values ranging from $100 million to $500 million that require equity investments ranging from $40 million to $100 million. The firm has $1.5 billion of assets under management and was co-founded by Ian Snow and Ogden Phipps in April 2005. Snow Phipps is headquartered in New York (www.snowphipps.com).

“DecoPac represents an opportunity for Snow Phipps to partner with a long-tenured management team that has demonstrated the ability to serve as a market-leading, value-added distributor of bakery-decorating solutions with a unique, technology-focused business model,” said Sundip Murthy, Partner at Snow Phipps. “As retailers continue to invest in their in-store bakery footprints, there is strong demand for top-tier supply chain quality and service. DecoPac is distinctly positioned to help its customers drive profitable growth.”

Snow Phipps Operating Partner Peter Shea will serve as the non-executive Co-Chairman of the Board. “DecoPac represents an opportunity for Snow Phipps to participate in the rapid growth surrounding the in-store bakery,” said Mr. Shea. “The McGlynn family has done an outstanding job providing best-in-class supply chain service and solutions for bakery operators. We are excited to participate in the next phase of the company’s development.”

© 2017 Private Equity Professional | October 4, 2017

SK Capital Expands Team

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SK Capital Partners has added two new team members with the hirings of Edward Donkor as a Principal and Simon Dowker as Director of Business Development.

Prior to joining SK Capital, Mr. Donkor was a Principal at Pine Brook Partners, where he was active in sourcing and executing a variety of energy related investment opportunities as well as holding active board-level responsibilities for several of Pine Brook’s portfolio companies. Before joining Pine Brook, he was an investment professional at First Reserve and an investment banker in the industrial and services group at Credit Suisse. Mr. Donkor has a BA in economics and computer science from Macalester College.

“We are excited to have Edward join the SK Capital team. He brings highly leverageable experience and relationships, particularly in oilfield and related segments of the chemicals sector,” said Managing Director Jack Norris.

Mr. Dowker was formerly a Managing Director at PJT Partners where he focused on the global chemicals sector.  From 2011 to 2016 he worked at Jefferies where he was the head of European chemicals coverage. Mr. Dowker, who has a degree in chemical engineering from Cambridge, started his career at UBS in London, Johannesburg and Dubai, where he focused on transactions in the chemicals and industrials sectors.

“In this newly created business development role, we believe Simon’s deep industry knowledge and relationships in our target sectors will augment our existing sourcing efforts to generate incremental opportunities in both corporate carveouts and entrepreneurial transitions,” said Managing Director Aaron Davenport.

SK Capital specializes in the specialty materials, chemicals and healthcare sectors and typically invests equity of $100 million to $200 million in each portfolio company. SK Capital’s portfolio companies generate revenues of approximately $6 billion annually and employ approximately 8,700 people. The firm has more than $1.9 billion of assets under management and is based in New York (www.skcapitalpartners.com).

© 2017 Private Equity Professional | October 4, 2017

Pfingsten Acquires Lumenier

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Pfingsten Partners has acquired Lumenier, a designer, manufacturer and online retailer of drone equipment, components and replacement parts for racing, enthusiast, commercial, consumer and military applications.

Lumenier products include motors, propellers, antennas, airframes, batteries, electronics and other drone-related components sold under the Lumenier brand as well as other third-party brands. The company’s products are sold through various distributors, third party online retailers and through the company’s own online retail website. Lumenier is headquartered in Sarasota, FL (www.lumenier.com) (www.getfpv.com).

Pfingsten invests in middle market manufacturing, distribution and business services companies that have transaction values ranging from $15 million to $100 million and EBITDA between $3 million and $12 million. Since founding in 1989, Pfingsten has acquired 121 such companies through five funds with total commitments of $1.3 billion. The firm is based in Chicago with additional representative offices in India and China (www.pfingsten.com).

“The strong commitment of our new partners is critical to support our ambitious growth plan,” said Tim Nilson, Lumenier CEO. “Pfingsten’s conservative capital structure and capabilities in China will allow Lumenier to accelerate our investments in manufacturing capacity and continue our rapid growth.”

The buy of Lumenier closed on September 29, 2017 and is the fourth platform investment for Pfingsten’s $382 million fifth fund which closed in March 2016.

“We look forward to supporting Tim Nilson and the entire Lumenier team in the next stage of the company’s evolution by making investments in people, production capacity and new products,” said Phillip Bronsteatter, a Principal at Pfingsten. “Lumenier has leading brand recognition in the racing and enthusiast segments of the drone market and they are well positioned to benefit from the rapidly growing commercial segment.”

FPG Advisory (www.fpgadvisory.com), a provider of transaction advisory services and private equity capital based in New York, was the financial advisor to Lumenier.

© 2017 Private Equity Professional | October 4, 2017

High Road Closes Sale of Crown to PPG

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High Road Capital Partners has closed on the sale of The Crown Group, a provider of coating services to companies operating in the automotive, agricultural and heavy truck markets, to publicly-traded PPG Industries.

The Crown Group provides coatings for electrocoat, powder coat, and liquid applications to the automotive, agriculture, construction, heavy truck and alternative energy industries. The company also provides assembly, warehousing, and sequencing services, as well as component finishing operations and inventory management. The Crown Group has 11 facilities in the Michigan cities of Detroit, Livonia, and Shelby Township; Asheboro, NC; Franklin, GA; East Moline, IL; Fort Wayne, IN; Greenville and Spartanburg, SC; Portland, TN; and Waterloo, IA. The Crown Group has approximately 950 employees and is headquartered near Detroit in Warren, MI (www.thecrowngrp.com).

The Crown Group has been a portfolio company of High Road Capital Partners and Charter Oak Equity since May 2013 and during the ownership term Crown nearly doubled both its facilities and employees.

“During our four-year ownership of Crown, revenue grew by more than 80 percent and EBITDA more than doubled,” said Bill Connell, a Partner at High Road. “Partnering with an exceptional management team, led by Frank Knoth, we expanded Crown’s products, services and footprint, enabling the company to become increasingly important to their blue-chip customer base. Crown’s success underscores High Road’s acumen in taking smaller niche companies to the next level.” Mr. Connell led the High Road team, supported by Bill Hobbs, Operating Partner.

The sale of Crown, which closed on October 2, 2017, marks the first exit for High Road’s second fund which closed at its hard cap of $320 million in December 2013. High Road invests in manufacturing, service, or value-added distribution businesses with revenues of $10 million to $100 million and EBITDAs of $3 million to $10 million.  High Road has completed 43 transactions – 17 platform investments, 20 add-on acquisitions and six exits – since its founding in 2007.  High Road is based in New York (www.highroadcap.com).

Charter Oak Equity, which co-invested in Crown alongside High Road in May 2013, invests in niche manufacturing, value-added distribution, and service companies ranging in size from $25 million to $150 million of enterprise value.  Charter Oak was founded in 2006 and is based in Westport, CT (www.charteroak-equity.com).

PPG Industries, the buyer of Crown, is a Fortune 500 company and global supplier of paints, coatings, specialty materials, and fiberglass. The company has annual revenues of nearly $15 billion and is headquartered in Pittsburgh (www.ppg.com).

Houlihan Lokey (www.HL.com) was the financial advisor to Crown and Thompson Hine (www.thompsonhine.com) provided legal counsel.

© 2017 Private Equity Professional | October 4, 2017