October 24, 2017
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Archives for October 24, 2017

Stellex Takes Aim at Automotive

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Stellex Capital Management has partnered with Bruce Swift, an executive with over 30 years of senior management experience in the automotive industry, to pursue an acquisition strategy in the manufacturing and automotive space.

Stellex invests from $25 million to $100 million per transaction in companies experiencing some form of financial, operational or industry-driven distress. Target companies will typically have an enterprise value of $50 million to $500 million and will be located in the United States or Europe. Sectors of interest include automotive, aerospace, building products, defense, industrial equipment, metal fabrication and transportation.

“Our primary focus areas are the manufacturing and industrial service businesses where we have significant experience investing over several economic cycles and maintain longstanding relationships with key industry participants,” said Ray Whiteman, a Managing Partner of Stellex.

In July 2017, Stellex closed its debut fund, Stellex Capital Partners LP, at $870 million, exceeding its $750 million target. Stellex’s founding partners – Ray Whiteman and Michael Stewart – have worked together for over 14 years. Prior to forming Stellex in 2014 they were both partners of The Carlyle Group and co-heads of Carlyle Strategic Partners.

From 2005 to 2012, Mr. Swift was the Chief Executive Officer of Diversified Machine, a vertically-integrated supplier of chassis and powertrain components and modules to automotive OEMs and Tier 1 suppliers. Diversified Machine was a portfolio company of Carlyle Group from 2005 to 2011 until its sale to Platinum Equity. During his tenure at Diversified Machine, the company realized six-fold growth through organic growth and add-on acquisitions.

“We are excited about teaming with an experienced executive like Bruce and leveraging his expertise in the space as we initiate a search for acquisitions that align with our investment acumen and goals. We have known Bruce for over a decade, since Ray and I partnered with him to build Diversified Machine,” said Michael Stewart, a Managing Partner of Stellex. “We plan to deploy at least $100 million of equity into this strategy with Bruce.”

Prior to Diversified Machine, Mr. Swift was President of Metaldyne Driveline Division, an $800 million business unit of Metaldyne Performance Group, comprised of 19 manufacturing facilities in five countries with 3,600 employees. Metaldyne produces and sells components for use in powertrain and safety-critical platforms worldwide. Mr. Swift also held a number of executive purchasing positions at Ford Motor Company and began his career in the automotive industry at Honda of America, where he was responsible for the North American supply base expansion and localization of vehicle parts and systems.

“I am looking forward to collaborating with Ray, Mike and the Stellex team in identifying attractive opportunities within the automotive space and applying my experience in the industry to help support and grow these investments,” said Mr. Swift.

Stellex Capital Management has offices in New York and London (www.stellexcapital.com).

© 2017 Private Equity Professional | October 24, 2017

Ridgemont Invests in Service Management Group

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Ridgemont Equity Partners has made an investment in Service Management Group, a provider of a consumer and brand data.

Service Management Group (SMG) is a market research company that provides data on customer experience, employee engagement and brand research to more than 450 brands in the restaurant, retail, grocery, convenience, travel and entertainment, professional services and healthcare industries. The company collects consumer information through more than 200 million surveys annually across a range of collection points including on-location, on-line, and through contact centers. SMG was founded in 1991 by Andy Fromm and Bill Fromm and is headquartered in Kansas City (www.smg.com).

“SMG is the clear market leader in measuring and analyzing customer experience and employee engagement in restaurant and retail settings, which is mission-critical data for the company’s customers,” said Kurt Leedy, a Principal at Ridgemont. “The company does an outstanding job serving its clients and has ample white space for future growth. We are excited to have SMG join the Ridgemont portfolio and look forward to partnering with SMG leadership to continue their growth and success.”

Ridgemont focuses on middle market buyout and growth equity investments of $25 million to $100 million. The firm invests in the following sectors: basic industries and services, energy, healthcare, and technology and telecommunications. The firm is headquartered in Charlotte with an additional office in Dallas (www.ridgemontep.com).

“Our partnership with Ridgemont marks the beginning of an exciting new chapter for SMG,” said Andy Fromm, CEO of SMG. “Ridgemont brings more than twenty years of investment experience and shares our vision for helping brands create experiences that improve people’s lives. Together we will take on new growth initiatives while remaining committed to offering the best software platform and most actionable insights to our clients.”

William Blair (www.williamblair.com) was the financial advisor to SMG

© 2017 Private Equity Professional | October 24, 2017

Blue Wolf Closes Fund IV

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Blue Wolf Capital Partners has held a final closing of Blue Wolf Capital Fund IV LP with $540 million of capital commitments. The new fund was oversubscribed and closed at its hard cap.

Blue Wolf invests in companies in which management of relationships with complex constituencies – such as government and labor – can change organizations and create value. Sectors of specific interest to Blue Wolf include healthcare, building products, forest products, energy services, and defense and government services. The firm’s investment criteria are minimum revenues of $25 million; minimum transaction size of $20 million; and a minimum investment size of $10 million. The firm focuses its efforts on companies based in the United States and Canada.

“All of us at Blue Wolf appreciate the support our previous investors have shown by joining us in our new fund and are happy to welcome a select group of new long-term partners. We have a robust pipeline of investment opportunities and look forward to putting this capital to work,” said Adam Blumenthal, Managing Partner of Blue Wolf.

With the closing of Fund IV, Blue Wolf now manages over $1.2 billion in capital and capital commitments. The firm’s earlier fund, Blue Wolf Capital Fund III LP, which closed in July 2013 with $300 million of capital commitments, has invested in ten platform companies.

Blue Wolf Capital Partners is headquartered in New York (www.blue-wolf.com).

© 2017 Private Equity Professional | October 24, 2017

Breakwater Expands Executive Team

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Breakwater Management has added two new members to its team with the hirings of Darrick Geant as Managing Director and Joe Kaczorowski as Managing Director and Chief Financial Officer.

“We’ve known both Darrick and Joe for many years, and are excited to have such talented professionals join our team,” said Eric Beckman, Managing Partner of Breakwater. In his new position, Mr. Geant will be active in origination, execution and monitoring of Breakwater’s investments.  Mr. Kaczorowski is responsible for financial, legal, tax and general administration of Breakwater, its funds and its portfolios. He also serves as Head of Portfolio Management and as Breakwater’s Chief Compliance Officer.  Both Mr. Geant and Mr. Kaczorowski will serve on the firm’s investment committee.

“Darrick’s extensive leverage finance experience and Joe’s deep finance and operating expertise, both within investment firms and at private companies, will be hugely additive to Breakwater’s business,” said Managing Partner Saif Mansour.

Prior to joining Breakwater, Mr. Geant was a Managing Director at Goldman Sachs, where he co-led its middle market leveraged finance group.  Earlier in his career he worked at Barclays Capital, where he helped found the Los Angeles office and build the firm’s North American leveraged finance platform. Before Barclays Capital he was at DLJ and Credit Suisse as an investment banker focused on capital markets and advisory transactions.

Before joining Breakwater, Mr. Kaczorowski was the President of Grosvenor Park Media, an alternative lender focused on the media and entertainment industry.  Earlier in his career Mr. Kaczorowski served as President and Chief Financial Officer of HOB (House of Blues) Entertainment, a private equity-sponsored music and hospitality company that was sold to Live Nation Entertainment.  Mr. Kaczorowski began his career with CPA firm Kenneth Leventhal & Company. In addition, he has served on the Board of Directors for two publicly-traded companies, Napster and Roxio.

Breakwater specializes in direct investments in small to lower middle market growth businesses with annual sales ranging from $10 million to $200 million. The firm looks to generate both current income and capital appreciation through secured debt investments and equity participation rights, primarily in growth-oriented companies across a variety of industries. Breakwater is headquartered in Los Angeles (www.breakwaterfunds.com).

© 2017 Private Equity Professional | October 24, 2017

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