Archives for November 2017

Encore Sells Mussel Grower to OTPP

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Encore Consumer Capital has completed the sale of Atlantic Aqua Farms to Ontario Teachers’ Pension Plan.

Atlantic Aqua Farms (AAF) is the largest grower and processor of the Prince Edward Island blue mussel sold under the Canadian Cove and Confederation Cove brand names. The company also sells branded oysters, clams, and live Maine and Canadian lobster. Atlantic Aqua Farms was founded by Brian and Bob Fortune in 1989 and is headquartered in Vernon Bridge, PE (www.atlanticaquafarms.ca) (www.canadiancove.com) (www.confederationcove.com) (www.jpshellfish.com). Under Ontario Teachers’ Pension Plan ownership AAF will continue to be led by CEO Terry Ennis and the current senior management team.

“My colleagues and I have enjoyed working with Encore. In particular, we appreciate the support and horsepower that the Encore team contributed to help grow AAF through substantial investment in the operations and the team and through complementary acquisitions,” said Terry Ennis. “We look forward to partnering with our new colleagues at Ontario Teachers’ to continue on that growth path so that we can bring our quality shellfish products to more consumers.”

“We have thoroughly enjoyed our time partnering with AAF and are proud of the accomplishments that the company has made during this time under the leadership of Terry Ennis and his team,” said Kevin Murphy, a Managing Director of Encore Consumer Capital. “AAF is poised to continue to flourish under its new owners, Ontario Teachers’, and we look forward to watching as the company becomes an even more important player in the sustainably grown and harvested shellfish category.”

Encore Consumer Capital invests exclusively in consumer products companies that have revenues between $10 million and $100 million and where it can utilize its own consumer experience and the expertise of its operating partners at Encore Associates, a strategic advisory firm to the consumer products industry. The firm has raised nearly $600 million in equity capital and invested in 26 platform companies.  Encore was founded in 2005 and is headquartered in San Francisco (www.encoreconsumercapital.com).

Ontario Teachers’ Pension Plan, led by President and Chief Executive Officer Ron Mock, and Chief Investment Officer Bjarne Graven Larsen, is one of Canada’s largest and most active pension investors with C$180 billion in net assets as of June 2017. Teachers’ portfolio of assets, 80% of which is managed in-house, has earned an annualized rate of return of 10.1% since the plan’s founding in 1990. Teachers’ has offices in Toronto, Hong Kong and London (www.otpp.com).

William Blair was the financial advisor to AAF and Encore on this transaction.

© 2017 Private Equity Professional | November 20, 2017

Wind Point Keeps Building Valicor

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Valicor Environmental Services, a portfolio company of Wind Point Partners, has acquired Midstate Environmental Services.

Midstate operates two centralized wastewater treatment (CWT) facilities and provides used oil collection and processing services throughout Texas and Oklahoma. The company is based near Dallas in Hutchins, TX (www.midstateenv.com).

In June 2017, Wind Point Partners partnered with waste management and environmental services executive James Devlin to acquire Valicor Environmental Services, a provider of non-hazardous wastewater treatment services and a division of employee-owned Valicor Inc. As part of the transaction, Wind Point acquired all of Valicor’s wastewater and oil processing assets as well as ownership of the Valicor brand. In July 2017 the company completed its first add-on acquisition with the buy of Ultra Environmental, a Burlington, KY-based collector and processor non-hazardous industrial wastewater. Valicor is headquartered north of Cincinnati in Monroe, OH (www.valicor.com).

According to Valicor, Midstate has the capacity to expand its wastewater treatment operations which will allow Valicor to become one of the leading wastewater treatment providers in the state of Texas. “We are excited to extend Valicor’s leading network into Texas and Oklahoma. Valicor continues to expand into additional geographies in order to better serve both new and existing customers,” said James Devlin, Valicor’s Chief Executive Officer.  “Midstate will play a critical role in building out our offerings of wastewater and other environmental solutions. We could not be more excited about this addition to the Valicor platform.”

Valicor’s acquisition program focuses on acquiring operators of CWT facilities as well as other providers of waste management and environmental services, including materials recycling, used oil processing, product destruction, landfill solidification, and related services.

“Midstate further expands Valicor’s geographic reach and enhances our offerings of environmental solutions, which was a core tenet of our value creation plan when we acquired Valicor,” said Konrad Salaber, a Managing Director with Wind Point.

Wind Point invests from $30 million to $150 million in companies with revenues from $100 million to $500 million and EBITDAs of at least $10 million. Industries of interest include business services, consumer products and industrial products. Wind Point was founded in 1984 and is based in Chicago. In June 2017, Wind Point held a final closing of its eighth fund, Wind Point Partners VIII, with $985 million of capital commitments. The fund exceeded its initial hard cap of $750 million and marks the largest fund closing in Wind Point’s history (www.wppartners.com).

© 2017 Private Equity Professional | November 20, 2017

Spanos Barber Jesse Acquires Dennis Uniform

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Spanos Barber Jesse & Co. (SBJ) has completed its acquisition of Dennis Uniform, the oldest provider of school uniforms in North America.

Dennis Uniform is a designer and manufacturer of school uniforms – including polos, khakis, shorts, and skirts – that serves nearly 2,000 schools and 370,000 students per year through its website and through a national network of 37 retail locations operating in 20 states. According to SBJ, Dennis Uniform was an early adopter in e-commerce among school uniform providers and has developed one of the strongest online capabilities in the industry. The company’s manufacturing facility and headquarters is in Portland, OR (www.dennisuniform.com).

Dennis Uniform was founded in 1920 by the Shipley family and began as a manufacturer of nursing uniforms. The company also supplied apparel and linens to military personnel shipping out of Portland during World War II. Thomas Shipley, the third-generation owner of Dennis Uniform, has retained a significant ownership interest in the company alongside SBJ and will continue to serve as Executive Chairman.

“After almost a century in the school uniform business, we decided to take on an investment partner to help us capitalize on the growth opportunities we see in our industry.  SBJ’s capital and strategic resources combined with Dennis’ leading retail and online platforms position our company well to serve as an industry consolidator.  The SBJ team also brings a collaborative approach that we felt we needed in a growth partner,” said Mr. Shipley.

Upon closing of the transaction, Gary Serra, previously the Chief Operating Officer at Dennis Uniform, has been named Chief Executive Officer. Mr. Serra has spent more than 15 years in the school uniform industry, including the last four years at Dennis Uniform, and was previously VP & Director of Sales at McCarthy School Uniforms, the largest school uniform provider in Canada.

“We have been longtime followers of the school uniform industry and are honored that the Shipley family chose to partner with us,” said Tom Barber, a Co-Founder and Managing Director at SBJ.  “We look forward to working with the Shipleys, Gary and the rest of the management team to continue the company’s long history of success.”

SBJ invests from $8 million to $35 million in consumer, business services and healthcare services companies that have up to $100 million in revenue and EBITDA from $1 million to $10 million. In October 2015, SBJ held a final closing on its debut fund, SBJ Fund LP, with total capital commitments of $204 million, exceeding its original $150 million target. The firm was founded by Gus Spanos, Tom Barber and Bill Jesse and has offices in Walnut Creek, CA (near San Francisco) and in Dallas, TX (www.sbjcap.com).

© 2017 Private Equity Professional | November 17, 2017

Peak Rock Exits Main Steel

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Peak Rock Capital has sold its portfolio company Advanced Alloy Processing Holdings, the parent of Main Steel, to Samuel, Son & Co. Peak Rock acquired Main Steel (then Main Steel Polishing Company) in November 2014 from metals fabricator Shale-Inland.

Main Steel is a processor and polisher of stainless steel, aluminum, and nickel alloys.  The company’s products are used in a range of markets, including transportation, fabrication, petrochemical and food service.  Main Steel, led by CEO Paul Patek, has a network of processing facilities located near Chicago in Elk Grove Village, IL (headquarters); Atlanta, GA; Harmony, PA; and Riverside, CA (www.mainsteel.com).

During Peak Rock’s term of ownership the company made a number of operational improvements which grew its toll processing business (performing a service on a customer’s product for a fee) and it also made investments in Main Steel’s facilities which improved quality, productivity, and processing capabilities.

“We are proud of our success at Main Steel. Working closely with an outstanding management team led by Paul Patek, we supported a significant transformation of the company, rapidly growing its toll processing volumes while expanding key strategic relationships,” said Peter Leibman, Managing Director of Peak Rock Capital.

Peak Rock makes debt and equity investments of $20 million to $150 million in middle market companies with revenues from $50 million to $1 billion and enterprise values from $25 million to $500 million. Sectors of interest include business and commercial services; consumer; distribution and logistics; energy and related services; healthcare; industrials; manufacturing, metals, and media. The firm is based in Austin (www.peakrockcapital.com).

“Peak Rock Capital has been an exceptional owner for Main Steel and a great partner to our team,” said Mr. Patek. “They provided the resources and consistent support necessary to enable the success of our strategic and operational initiatives.”

Samuel, Son & Co., the buyer of Main Steel, is a metals and industrial products manufacturer, processor and distributor. Samuel is the fifth largest processor and distributor of carbon steel, stainless steel, and aluminum in North America and has over 100 steel service centers and manufacturing facilities. The company is family-owned and operated and was founded in 1855 with headquarters near Toronto in Mississauga, ON (www.samuel.com).

KeyBanc Capital Markets was the financial advisor to Main Steel on this transaction.

© 2017 Private Equity Professional | November 17, 2017

Arlington Buys Cadence from Court Square

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Arlington Capital Partners has acquired Cadence Aerospace from Court Square Capital Partners.

Cadence Aerospace was acquired by Court Square in May 2012 and is a supplier of components, subassemblies and assemblies to manufacturers of aircraft, aerostructures, aeroequipment, engine, and other commercial aerospace and defense platforms. The company has specific capabilities with difficult-to-machine geometries, hard metal alloys, and very large aerostructures.

Customers of Cadence are major OEMs and Tier 1 suppliers and include Boeing, Airbus, Northrop Grumman, Fokker, Lockheed Martin, United Technologies, FACC, Honeywell and Spirit. Cadence has operations in California, Arizona, Washington, Massachusetts and Mexico and is headquartered in Anaheim, CA (www.cadenceaerospace.com).

“Cadence’s robust set of manufacturing capabilities, customer relationships and favorable exposure to key growth platforms collectively present a compelling investment opportunity,” said Peter Manos, a Managing Partner at Arlington Capital. “Cadence stands to benefit from supply chain consolidation given its unique scale and capabilities as customers look to larger, more established industry players to drive manufacturing efficiencies, quality, and design innovation.”

Arlington invests in buyouts and recapitalizations of companies valued from $50 million to $500 million. Sectors of interest include government services and technology; aerospace and defense; healthcare; and business services and software. Arlington is investing out of its fourth fund which closed in July 2016 with $700 million of capital. The firm is based in Chevy Chase, MD (www.arlingtoncap.com).

“We are excited to partner with Arlington, a private equity firm with a successful history in the aerospace sector, to capitalize on the multitude of opportunities available to the company in our current end markets,” said Ron Case, CEO of Cadence. “Through a growth strategy that includes both organic capital investments and acquisitions, we are focused on creating value for our customers and employees alike.”

Court Square, the seller of Cadence, invests in middle market companies that are active in the business services, general industrials, healthcare, and technology/telecommunications sectors. Court Square is based in New York (www.courtsquare.com).

Lazard was the financial advisor to Cadence on this transaction.

© 2017 Private Equity Professional | November 17, 2017

Incline Buys Fond du Lac Cold Storage

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Incline Equity Partners has acquired Fond du Lac Cold Storage (FDL), a provider of refrigerated storage logistics.

FDL specializes in the temperature controlled warehousing of wine, cheese, chocolate and craft beer. The company has 22 million cubic feet of temperature controlled storage space and provides daily delivery services – it has a fleet of 60 refrigerated trucks – to markets in New Jersey, Illinois and New York and also offers other services such as labeling and picking and repacking. FDL was founded in 1998 and is headquartered near New York in Edison, NJ (www.fdlwarehouse.com).

“Our primary customers are small to medium-sized wine importers that need a logistics supplier but are often underserved by our competitors.  Many of our customers have grown significantly, and we are committed to growing with them. We are partnering with Incline to improve operational and delivery performance and to strengthen our ability to support our customers,” said Ted Chan, FDL’s founder and CEO.

“We were immediately attracted to FDL given our prior investments in similar distribution businesses,” said Justin Bertram, a Partner with Incline.  “FDL has established tremendous trust with its customers.  We are excited to leverage our past experience to help Ted and the management team accomplish their long-term growth objectives.”

Incline invests from $15 million to $30 million in support of recapitalizations, buyouts and corporate divestitures of lower middle market companies that have EBITDAs greater than $5 million and enterprise values between $50 million and $200 million. Sectors of interest include value-added distribution, specialized light manufacturing, and business and industrial services.  Incline was formed in 2011 and is based in Pittsburgh (www.inclineequity.com).

Backing the buy of FDL by Incline was Twin Brook Capital Partners which acted as the Sole Lead Arranger and Administrative Agent on the senior financing for the transaction.

Providence, RI-based investment bank Riparian Partners (www.riparianpartners.com) was the financial advisor to Fond Du Lac Cold Storage on this transaction.

© 2017 Private Equity Professional | November 17, 2017