Archives for November 29, 2017

HCI Equity Closes Fund V

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HCI Equity Partners has closed its fifth fund, HCI Equity Partners Fund V LP, above the targeted amount of $400 million.

HCI Equity Partners (HCI) is led by Managing Partners Dan Dickinson, Doug McCormick, and Scott Rued and was founded in 2003. The firm invests in industrial products and service companies that have from $20 million to $200 million in annual revenue and $5 million to $20 million in EBITDA. Sectors of interest include aerospace and defense; transportation products and services; distribution; infrastructure products and services; niche manufacturing; and industrial services.

“HCI is pleased to further diversify our investor base and align with long-term limited partners supportive of HCI’s operationally intensive approach to investing,” said Mr. Dickinson. “We’re thankful for the confidence our investors have placed in HCI to continue our active approach to building solid partnerships with owners and management teams.”

HCI is headquartered in Washington, DC with additional offices in Chicago and Minneapolis (www.hciequity.com).

Fund V will begin its investment activities in January 2018.

UBS served as the placement agent for Fund V and Kirkland & Ellis served as legal counsel.

© 2017 Private Equity Professional | November 29, 2017

Churchill Closes New Fund

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Churchill Asset Management has completed fundraising for Churchill Middle Market Senior Loan Fund LP, its inaugural fund as part of Nuveen, with over $1.1 billion in committed capital.

Churchill Asset Management (Churchill) was launched in April 2015 by financial services provider TIAA (Teachers Insurance and Annuity Association of America) to originate, underwrite and manage senior loan investments primarily in US-based middle-market companies.  Churchill, which operates within Nuveen, the institutional and individual asset manager of TIAA, is led by the former senior management team of Churchill Financial which was acquired by The Carlyle Group in November 2011.

The new fund has commitments from a diverse group of global institutions including pension plans, insurance companies, foundations, single and multi-family offices and high net worth investors based in North America, Europe, South America and Asia.

“We are delighted with the strong response we received from investors across the globe to our inaugural fund offering as part of Nuveen. Our investors include over 30 leading institutions and family offices globally, and we are grateful for their confidence in us and support for our investment approach,” said Ken Kencel, President and CEO of Churchill. “As investors increasingly look to private credit for income and diversification, we are extraordinarily well-positioned to benefit from our very strong and longstanding relationships in the private equity community and deep expertise in financing middle market companies to provide products that meet the needs of investors globally.”

The new fund invests in senior secured loans to US middle market companies with annual EBITDA of up to $100 million that are owned or controlled by private equity firms. Churchill’s senior management team has an average of over 25 years of middle market lending experience and has invested over $6.5 billion in over 500 middle market companies controlled by over 150 private equity sponsors over the past 12 years.

Churchill, an affiliate of Nuveen and a majority-owned, indirect subsidiary of TIAA, has approximately $3.7 billion in committed capital under management. The firm manages capital on behalf of TIAA and other institutional and high net worth investors through commingled funds, separately managed accounts, CLOs and other investment vehicles.  Churchill is headquartered in New York (www.churchillam.com).

© 2017 Private Equity Professional | November 29, 2017

Ironwood Invests in Industrial Timber

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Ironwood Capital has made a subordinated debt and minority equity investment in Industrial Timber, one of the largest designers and manufacturers of outsourced, ready-to-assemble just-in-time wooden frames to the upholstered furniture industry.

The customers of Industrial Timber include many of the top furniture manufacturers in the United States and the company is active in manufacturing more than 100,000 frames each week. Industrial Timber was founded in 1999 and is based in Hiddenite, NC (60 miles north of Charlotte) with manufacturing facilities throughout the southeast (www.thesmartplay.com).

Many of Industrial Timber’s mill facilities are located either near or inside its customers’ facilities and deliver frames on a just-in-time basis, greatly reducing freight and storage expenses. “By partnering with Industrial Timber, our customers realize cost reductions of 10% to 30%, directly impacting their bottom line,” said company founder and CEO Mike Ruch.

“Industrial Timber has forged long-term customer relationships with many of the premier household furniture manufacturers in the US,” said Ironwood Capital President and Chief Investment Officer Carolyn Galiette. “The company has a deep knowledge of frame design and woodworking and the ability to streamline operations for superior yields and reduced waste, providing a significant competitive advantage.”

Ironwood Capital provides non-control growth capital to middle market companies. Investments take the form of subordinated debt and preferred stock in amounts ranging from $5 million to $20 million to support business owners and financial sponsors in growth financings, full and partial recapitalizations, generational transitions and buyouts. Ironwood Capital is headquartered in Avon, CT (www.ironwoodcap.com).

“As both a leader and innovator in upholstered furniture frame engineering and manufacturing, Industrial Timber fits well within our outsourced niche manufacturing vertical,” said Ironwood Capital Managing Director Alex Levental. “Additionally, we’re impressed with Mike Ruch and his entire management team and are confident in their ability to continue to build on their previous success.”

“With the investment from Ironwood Capital now completed, Industrial Timber is well-positioned to significantly ramp-up sales and production volume through organic growth and strategic acquisitions,” concluded Mr. Ruch.

© 2017 Private Equity Professional | November 29, 2017

Audax Sells Astrodyne to Tinicum

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Audax Private Equity has sold its portfolio company Astrodyne TDI to Tinicum. Audax acquired Astrodyne Corporation in April 2008 from American Capital Strategies.

Astrodyne TDI is a power electronics company that designs and manufactures specialty power supplies and electromagnetic interference (EMI) filters.  EMI filters are passive electronic devices used to suppress conducted interference present on any power or signal line. These filters may be used to suppress the interference generated by the device itself as well as to suppress the interference generated by other equipment. Astrodyne’s products are used primarily in the semiconductor capital equipment, medical, aerospace, defense and general industrial end markets. The company was founded in 1994 and is headquartered in Nashua, NH with over 600 employees and operations in the US and China (www.astrodynetdi.com).

“Audax has been instrumental in helping us to grow Astrodyne over the life of the partnership,” said Jeff Beck, the Chief Executive Officer of Astrodyne. “Together we have successfully diversified our service offering, invested in our corporate infrastructure, and positioned the business to capitalize on continued future growth.”

“The Astrodyne team transformed the business into a global developer and manufacturer with multiple complimentary product lines and abilities through organic growth and acquisition of strategic assets. We wish Jeff and his team continued success with their new partner,” said Geoffrey Rehnert, Co-Chief Executive Officer, Audax Group.

Audax Group makes control investments of $10 million to $100 million in middle market companies with transaction values of $25 million to $500 million. Sectors of interest include industrial manufacturing; energy; outsourced industrial services; consumer products; healthcare devices and services; non-asset based logistics; technology; aerospace & defense; business services; and direct marketing. The firm was founded in 1999 and has offices in Boston, New York and Menlo Park (www.audaxgroup.com).

With the acquisition of Astrodyne closed, Tinicum plans to build value in the company through organic expansion, growth through acquisitions and operational improvements.

Tinicum is a family office founded to manage the holdings of the Ruttenberg family and began managing outside capital in 1998. The firm makes control equity investments of $30 million to $150 million in public and privately held companies in a wide range of industries. Tinicum is currently investing out of Tinicum LP, a $1.6 billion fund which closed in 2012. Tinicum has offices in New York and San Francisco (www.tinicum.com).

Lincoln International was the financial advisor to Astrodyne TDI on this transaction.

© 2017 Private Equity Professional | November 29, 2017