Archives for November 2017

Pamlico Exits Secure-24

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NTT Communications has agreed to acquire Secure-24, a portfolio company of Pamlico Capital since September 2012.

Secure-24 provides managed IT operations, ERP application hosting and cloud computing services to mid-market and Fortune 1000 companies in the manufacturing, finance, pharmaceuticals, healthcare, insurance, government, and transportation sectors. The company was founded in 2001 and is based in Southfield, MI (www.secure-24.com).

According to NTT, the demand for managed services is growing steadily worldwide and managed-IT services, one of Secure-24’s core businesses, are expected to see especially significant growth in the US market.

NTT Communications provides information and communications related consultancy, architecture, security and cloud services to consumers, corporations and governments. The company, headquartered in Tokyo, was founded in 1999 as a subsidiary of Nippon Telegraph and Telephone, the largest telecommunications company in Japan and one of the largest worldwide (www.ntt.com).

Pamlico Capital invests from $20 million to $100 million in companies with total enterprise values of between $50 million and $250 million.  Sectors of interest include business and technology services, communications, and healthcare. Pamlico was founded in 1988 and is based in Charlotte (www.pamlicocapital.com).

© 2017 Private Equity Professional | November 15, 2017

Rosewood Builds International Nutrition

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International Nutrition & Wellness (INW), a portfolio company of Rosewood Private Investments, has acquired ProTec Laboratory, a provider of contract manufacturing services.

ProTec Laboratory provides its contract services to consumer brands in the dietary supplements, sports nutrition, functional foods, and pet care products industries. The company’s production capabilities include the development, manufacture, and filling of powder, liquid, tablet, capsule, and soft gel products. ProTec is headquartered 90 miles east of Dallas in Quitman, TX (www.proteclab.com).

The buy of ProTec represents the third acquisition for INW. In July 2017, INW acquired Irving, TX-based contract manufacturer, Healthy Natural from Rice-Bran Technologies; and in February 2014 it invested in United I International Laboratories, a Carrollton, TX-based manufacturer of dietary supplements, sports nutrition and personal care products.

“With Rosewood’s support we have been able to invest heavily in this category, beginning with United I,” said INW CEO Paul Richardson. “The recent integration of Healthy Natural has created meaningful value for us and more importantly, for our customers. By bringing ProTec into the fold, we’ve created a significant platform of scale with enormous potential. Today, the combined businesses serve well over 100 customers in over 60 markets globally, and we plan to grow far beyond that by focusing on our centers of excellence as well as through select strategic acquisitions.”

Rosewood Private Investments invests from $10 million to $50 million in US based businesses with $20 million to $150 million in revenue and EBITDA greater than $5 million. Sectors of interest include aerospace & defense, nutrition & wellness, manufacturing technologies, environmental services, packaging & labeling, food processing equipment, education beauty & personal care, rail products & services. The firm is the private equity arm of The Rosewood Corporation, which is wholly owned by the Caroline Hunt Trust Estate, which was established in 1935 by Texas oil tycoon H.L. Hunt. Rosewood Private Investments is based in Dallas (www.rosewoodpi.com).

“We are thrilled with the partnership and are excited about the opportunities to come,” said Sarah and Sail Ricks, founders of ProTec, in a released statement. “This investment will enable a 100,000-square foot expansion and allow us to make significant enhancements through technology and greater automation. Partnering with Rosewood and INW gives us the ability to rapidly expand our product portfolio and better serve our customers.”

Alantra Partners served as ProTec’s financial advisor.

© 2017 Private Equity Professional | November 14, 2017

Vestar Acquires Nonni’s

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Vestar Capital Partners has agreed to acquire Nonni’s Food Group, a manufacturer and marketer of artisanal cookies and other baked snacks, from Wind Point Partners.

Nonni’s Food Group is a producer, marketer, and distributor of branded specialty cookies and baked goods. The company sells its products under the Nonni’s, THINaddictives, and La Dolce Vita brands through the club, grocery, mass market, foodservice, and online retailing channels. According to Wind Point, Nonni’s Biscotti is the number one-selling biscotti in the US and the only national brand sold coast to coast.

Nonni’s operates four facilities in Ferndale, NY; Glendale, AZ; Tulsa, OK; and Montreal, QC and is headquartered near Chicago in Oakbrook Terrace, IL (www.nonnis.com).

Wind Point has a long history with Nonni’s. The firm first acquired the company in April 2004 from Swander Pace Capital and then sold the business to Greek food company Vivitaria SA for $320 million in 2008. In 2009 Nonni’s became part of Chipita America when Vivitaria spit up into four separate businesses. Then in January 2011 Wind Point reacquired Nonni’s from Chipita America.

During the term of its second ownership Wind Point completed two add-on acquisitions for Nonni’s. In January 2012, Nonni’s acquired THINaddictives, a producer of specialty thin biscotti cookies; and in January 2013, Nonni’s acquired La Dolce Vita, a producer of Italian biscotti and specialty cookies.

“We’re excited for management and Vestar to continue to build on Nonni’s category-leading position and its track record of success,” said Konrad Salaber, a Managing Director at Wind Point. “Nonni’s is a great example of how Wind Point’s strategy of partnering with top caliber CEOs can transform a business. The Nonni’s team executed against a value creation plan that dramatically increased the company’s scale, materially enhanced profit margins, and positioned the business extremely well for its next phase of robust growth.”

“Our partnership with Wind Point has been extraordinarily successful and we thank them for their support and contributions to Nonni’s,” said Brian Hansberry, CEO of Nonni’s. “We’re thrilled to be partnering with Vestar as we look to build upon Nonni’s growth and success. The Vestar team’s deep consumer experience will be invaluable as we work to expand our customer relationships, enter new channels, and continue to introduce new and innovative products to the marketplace.”

Vestar specializes in management buyouts and growth capital investments. The firm targets equity investments from $50 million to $150 million in middle-market companies with enterprise values ranging from $250 million to $1 billion. Sectors of interest include consumer; diversified industries; healthcare; and financial services.  Since the firm’s founding in 1988, Vestar has completed more than 80 investments in companies with a total value of more than $50 billion. Vestar has offices in New York, Boston, and Denver (www.vestarcapital.com).

“We see numerous growth avenues for Nonni’s premium, established brands,” said Brian O’Connor, Managing Director of Vestar and co-head of the firm’s consumer group. “We are excited to be partnering with Brian Hansberry, Chris Puma, and the rest of Nonni’s management team to pursue our shared vision for the company.”

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, healthcare and industrial products. Wind Point was founded in 1984 and is based in Chicago. Last month, 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).

Houlihan Lokey was the financial advisor to Nonni’s. Antares and Northwestern Mutual Capital provided financing for the transaction.

© 2017 Private Equity Professional | November 14, 2017

Southfield Buys American Refrigerator

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Southfield Capital has acquired American Refrigerator Company (ARC), the largest independent industrial refrigeration service company in New England.

ARC’s services include refrigeration and air conditioning system design, alternative refrigerant evaluations, freezing and cooling response evaluations, and energy studies. The company’s customers are active in the food and beverage, cold storage, pharmaceutical, and process industries.

ARC also provides construction and equipment maintenance and repair for industrial and commercial refrigeration systems. The company was founded in 1996 and is headquartered in Andover, MA (www.arc.cool).

Southfield Capital makes control investments in companies that have revenues of $20 million to $100 million and EBITDA of $4 million to $12 million. Sectors of interest include outsourced business services, specialty finance, and value-added distribution. In August 2017, the firm held a final close of Southfield Capital II LP with approximately $200 million in capital commitments. The close was at the fund’s hard cap and exceeded its original target of $175 million. Southfield Capital was founded in 2005 as the successor company to the private investment firm Levison & Company and is headquartered in Greenwich, CT (www.southfieldcapital.com).

Abacus Finance Group was the Administrative Agent and Lead Arranger for $20.5 million in senior secured credit facilities to support the buy of ARC by Southfield. “This was our second transaction with Abacus,” said Southfield Managing Partner Andy Levison, “and once again we were impressed with the flexibility of the financing structure that they proposed and the speed of their willingness to commit to the transaction.”

Abacus provides cash flow-based senior financing to private equity-sponsored, lower-middle market companies that have EBITDA between $3 million and $15 million. Debt facilities can be as large as $60 million with a typical hold size ranging from $10 million to $30 million.  New York-based Abacus was formed in June 2011 and is an affiliate of New York Private Bank & Trust (www.abacusfinance.com).

“As Andy noted, this was our second transaction with Southfield,” said Tim Clifford, President and CEO of Abacus, “and as before, they brought us a company of exceptional quality. We were well prepared for due diligence having taken a deep research dive into the industry – an important step in what we call our Total Partnership Approach.” Other Abacus team members involved in the transaction included Aized Rabbani and Joe Lee.

© 2017 Private Equity Professional | November 14, 2017

Apollo Names New Co-Presidents

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Apollo Global Management has expanded its senior leadership team to include two co-presidents with the promotions of Scott Kleinman and James Zelter.

In connection with these appointments, the current roles of Chairman and CEO Leon Black, Senior Managing Director Josh Harris, and Senior Managing Director Marc Rowan, will continue with respect to Apollo’s strategic leadership and investment committee decision-making. The appointments of Mr. Kleinman and Mr. Zelter to the newly created positions of Co-President will be effective as of January 1, 2018, and they will report to Mr. Harris.

In their new positions, Mr. Kleinman and Mr. Zelter will have full responsibility for all of Apollo’s revenue-generating and investing businesses. Mr. Kleinman will focus on Apollo’s equity and opportunistic businesses, and Mr. Zelter will focus on Apollo’s credit and yield businesses. They both will continue to serve on the investment committees in their respective areas of focus.

Mr. Kleinman has been the Lead Partner for Private Equity since 2009 and is a member of Apollo’s Management Committee. He joined Apollo in 1996 from investment bank Smith Barney. Mr. Zelter is the Managing Director of Apollo’s Credit business, a member of Apollo’s Management Committee, and Chief Executive Officer and director of Apollo Investment Corporation. Prior to joining Apollo in 2006, Mr. Zelter was with Citigroup and its predecessor companies from 1994 to 2006. Prior to joining Citigroup in 1994, Mr. Zelter was a High Yield Trader at Goldman Sachs & Co.

“Scott has been with Apollo for more than two decades, and he has played a critical role in driving the growth of our private equity business while maintaining a best-in-class investment track record. Jim joined Apollo more than a decade ago, and he has done an extraordinary job overseeing the growth of our credit business into one of the world’s largest alternative credit platforms,” said Mr. Harris.

“Scott and Jim are two of the most talented investors and managers in the industry, and their promotions reflect a natural progression of their distinguished careers,” said Mr. Black. “This new leadership structure affirms and strengthens the inherent power of our integrated global investment platform with $242 billion of total assets under management across credit, private equity and real assets and a deep bench of world-class talent that we continue to develop and promote at Apollo.”

Apollo has total assets under management of $197 billion in private equity, credit and real estate funds invested across a core group of nine industries:  chemicals; commodities; consumer & retail; distribution & transportation; financial & business services; manufacturing & industrial; media, cable & leisure; packaging & materials; and satellite & wireless. The firm has offices in New York, Los Angeles, Houston, Chicago, Bethesda, Toronto, London, Frankfurt, Madrid, Luxembourg, Mumbai, Delhi, Singapore, Hong Kong and Shanghai (www.agm.com).

© 2017 Private Equity Professional | November 14, 2017

Tengram Buys RéVive

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Tengram Capital Partners has agreed to acquire luxury skincare brand RéVive from Shiseido Americas Corporation. RéVive was acquired by Shiseido Americas as part of its 2016 acquisition of Gurwtich Products from Alticor. Closing is expected to be completed by the end of November.

RéVive is a luxury skincare line developed by Dr. Gregory Bays Brown, a plastic and reconstructive surgeon. Launched in 1997, RéVive is distributed domestically at luxury retailers such as Neiman Marcus, Saks, Bergdorf Goodman, Barney’s, Blue Mercury and Cos Bar and at other retailers in Canada, the UK, Europe and Asia (www.reviveskincare.com).

The new company will be led by Elana Drell Szyfer, the ex-CEO of Laura Geller New York, a cosmetics brand and a former portfolio company of Tengram, which the firm sold in 2016. Ms. Drell Szyfer joined Laura Geller in 2014 from Kenneth Cole where she was EVP of Global Brand Strategy. She has over two decades of experience in the beauty industry having worked at Estee Lauder, L’Oreal, and Avon.  At Estee Lauder, she held the role of Senior Vice President of Global Marketing for the Estee Lauder brand, and prior to that, Vice President of Global Marketing for Prescriptives. She then spent three years at AHAVA Dead Sea Laboratories (a cosmetics company), where she was Chief Executive Officer.  Ms. Drell Szyfer is currently an Operating Advisor with Tengram.

Ms. Drell Szyfer will be joined at RéVive by John Elmer who will become the brand’s new CFO and COO (Mr. Elmer served in this same role at Laura Geller) and Mary Rodrigues, an experienced beauty industry executive, will be the SVP of Marketing and E-commerce.

“We are delighted to add RéVive to our strong and growing portfolio of beauty brands,” said Richard Gersten, a Partner at Tengram Capital. “As an investor in consumer brands with a deep knowledge in beauty, I have watched RéVive for a long time. We believe it is a gem, thanks to Founder Dr. Gregory Bays Brown, its exceptional products based on Nobel prize-winning technologies, a loyal consumer following, and its impressive distribution. The RéVive brand has strong growth prospects, and we look forward to investing in key areas to enable the brand to thrive.”

Tengram invests in companies in the branded consumer products and retail sectors. Specific areas of interest include apparel, sporting goods, consumer electronics, home furnishings, health & beauty, spirits, and food & beverages. Tengram’s current beauty portfolio includes Nest Fragrances, Algenist, specialty beauty retailer Cos Bar, and natural beauty brand This Works. The firm was founded in 2010 and is based in Westport, CT (www.tengramcapital.com).

“RéVive has always been known for the quality and efficacy of its products. Its performance and positioning is well poised to appeal to a discerning skincare consumer domestically and internationally via both current and new channels of distribution,” said Ms. Drell Szyfer. “Finding a brand like RéVive is rare – we are extremely excited about the opportunity to partner with the existing team, partners and of course, Dr. Brown.”

As part of the purchase agreement, Shiseido Americas will continue to provide supply chain, distribution and other support services during the transition. “RéVive is a wonderful skincare brand. We are confident it will be well supported by Tengram while Shiseido focuses on continuing growth across our strategic portfolio of brands and businesses,” said Marc Rey, President and CEO of Shiseido Americas.

Shiseido Americas is a subsidiary of Tokyo-based Shiseido Company (TSE:4911), a global beauty company which brands include Shiseido, NARS, Clé de Peau Beauté, bareMinerals, Laura Mercier and several fragrance brands including Issey Miyake, Narciso Rodriguez and Dolce & Gabbana. Shiseido Americas is headquartered in New York (www.shiseido.com).

© 2017 Private Equity Professional | November 13, 2017