Archives for November 2017

Argosy Partners Exits Etratech

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Etratech Enterprises, a portfolio company of Argosy Partners, has been acquired by publicly-traded Gentherm for $64 million.

Etratech designs, develops and manufactures electronic controls and control systems for the automotive, RV and marine, security, and medical industries. The company’s capabilities include hardware and software design, prototyping and testing, manufacturing, assembly and final test, and packaging and delivery. Etratech employs more than 400 people worldwide and has manufacturing facilities in Burlington, ON (headquarters) and Shenzhen, China (www.etratech.com).

Etratech had revenues of approximately C$77 million (US$61 million) during the 12-month period prior to the acquisition and the purchase price of US$64 million represents approximately 8.5x trailing 12-months EBITDA.

“I believe that with Gentherm, we’ve found a perfect fit for our global electronics engineering and manufacturing business,” said Michael Desnoyers, the President and CEO of Etratech.

Gentherm (NASDAQ: THRM) is developer and marketer of thermal management technologies that are used in a range of heating and cooling and temperature control applications. The company’s automotive products include variable temperature climate control seats, TrueTherm cupholder and storage bins, and heated automotive interior systems (including heated seats, steering wheels, armrests and other components). Non-automotive products include remote power generation systems, heated and cooled furniture, patient temperature management systems, and industrial environmental test chambers. Gentherm is led by its CEO Daniel Coker and has over 13,000 employees in facilities in the United States, Germany, Canada, China, Hungary, Japan, Korea, Macedonia, Malta, Mexico, United Kingdom, Ukraine, and Vietnam. The company is headquartered near Detroit in Northville, MI (www.gentherm.com).

Argosy Partners invests in manufacturing, distribution or service companies that have enterprise values between C$3 million and C$20 million, sales between C$10 million and C$100 million, and cash flow before interest of at least C$1 million. The firm is headquartered in Toronto (www.argosysinvestments.com). Partner Larry Klar led the transaction for Argosy.

Birmingham, MI-based Angle Advisors (www.angleadvisors.com) was the investment banking advisor to Etratech on this transaction.

© 2017 Private Equity Professional | November 9, 2017

Norwest Acquires Ramsey Industries

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Norwest Equity Partners has acquired Ramsey Industries, a manufacturer of service cranes, industrial and commercial winches, planetary gear, and digger drives. Ramsey Industries was a portfolio company of Gridiron Capital and AEA Investors.

Ramsey Industries operates three wholly-owned branded subsidiaries: Auto Crane, Eskridge, and Ramsey Winch. Auto Crane designs and manufactures a line of truck-mounted electric and hydraulic telescopic cranes, crane service bodies, and crane controls that are used in the energy, mining, construction, industrial, forestry and railroad industries. Eskridge is a designer, manufacturer, and marketer of planetary gear drives and anchor drives, digger drives, and multiple-disc brakes sold to OEM and distribution customers. Ramsey Winch designs and manufactures industrial and consumer winches for use in towing and recovery, industrial, petroleum, off-road and ATV vehicles.

Ramsey has two facilities; one in Tulsa which serves as corporate headquarters and is a production facility for both Auto Crane and Ramsey Winch; and one in Olathe, KS (southwest of Kansas City) where Eskridge products are manufactured (www.ramseyindustries.com).

Ramsey was founded in 1944 as Ramsey Brothers Tool & Die by Claude and Rayburn Ramsey to manufacture aircraft parts, tools, and dies for Douglas Aircraft Company (now part of McDonnell Douglas which is owned by Boeing).

“On behalf of the entire Ramsey team, we are thrilled to partner with NEP for the next phase of our growth,” said John Celoni, Ramsey CEO. “NEP has a long-standing reputation for not only successful investments but continued advancement and implementation of strategic initiatives for its portfolio companies. There is a great cultural fit between our two teams, and we are excited to leverage NEP’s capital, network and vast resources, as well as its high-quality competence as an investment partner.”

Norwest Equity Partners makes equity investments of $30 million to $250 million in companies that have more than $10 million in EBITDA. Sectors of interest include agriculture, business services, consumer, distribution, diversified industrials, energy, and healthcare. In April 2015, NEP closed Norwest Equity Partners X, LP, a $1.6 billion fund and Norwest Mezzanine Partners IV, LP, an $800 million fund formed by NEP’s affiliated mezzanine investment firm, Norwest Mezzanine Partners. Norwest Equity Partners is headquartered in Minneapolis (www.nep.com).

“Ramsey’s highly diversified business model, experienced management team, excellent customer service, and premium brand portfolio differentiates them amongst their competitors,” said Tim Kuehl, a Partner at NEP. “We look forward to working together with John and his team to leverage the Company’s already superior platform for continued growth.”

Gridiron Capital, the seller of Ramsey, invests in manufacturing, service and specialty consumer companies that have EBITDAs from $5 million to $30 million and that are located in the United States and Canada. In October 2016, Gridiron held a final closing of the firm’s third fund, Gridiron Capital Fund III LP, at the hard cap of $850 million. Gridiron’s earlier fund closed with $425 million of capital commitments in August 2012. The firm is based in New Canaan, CT (www.gridironcapital.com).

AEA makes equity and debt investments in middle market companies that operate in the following sectors: retail and consumer products, services, specialty chemicals, and value-added industrial products. The firm manages approximately $9 billion of capital. AEA was founded in 1968 and is headquartered in New York (www.aeainvestors.com).

Ally Corporate Finance, ING Capital and Siemens Financial Services provided senior debt for this transaction and Norwest Mezzanine Partners served as mezzanine lender. BB&T Capital Markets was the financial advisor to Ramsey.

© 2017 Private Equity Professional | November 8, 2017

Audax Buys Master Coating Technologies

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Innovative Chemical Products, a portfolio company of Audax Private Equity, has acquired Master Coating Technologies (MCT), a manufacturer of specialty architectural coatings.

MCT’s family of five architectural coatings brands includes Scuffmaster Paint, Zolatone Interior Finishes, and MDC (all specialty paints); ClearErase (a clear dry erase coating); and Bellagard (sculpted wall panel systems). The company was founded in 1995 and is headquartered in Eagan, MN (www.mastercoating.com).

“Master Coating Technologies is among the top five manufacturers of specialty coatings. They have been on our radar for quite some time now. We’re thrilled to have their brilliant people – and technology – as a new resource to further cement our company’s reputation as an innovative leader,” said Doug Mattscheck, CEO of Innovative Chemical Products.

Innovative Chemical Products (ICP) was formed in January 2016 when Audax combined two of its specialty chemical portfolio companies, California Products (acquired from Delos Capital in October 2015) and Nicoat (acquired in March 2015 from Caltius Equity Partners). Today, ICP is a specialty chemical company engaged in the formulation, manufacturing, and marketing of coatings, adhesives, sealants and elastomers (CASE). ICP operates through three divisions: construction, adhesives & sealants, and industrial. The company sells its products to multiple end markets including OEM, industrial, building materials, packaging, printing, specialty construction, and sports surfaces. ICP has warehousing and manufacturing facilities near Chicago in Itasca, IL; a manufacturing facility southwest of Akron in Norton, OH; and is headquartered near Boston in Andover, MA (www.icpgroup.com).

The operations of Master Coating Technologies will be housed within the construction division of ICP which includes market-leading brands California Paints, FixALL, Storm System, Fiberlock, Dry-Treat, California Sports Surfaces, and Rock-Tred (www.icp-construction.com). The construction division is led by President Zain Mahmood.

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).

© 2017 Private Equity Professional | November 8, 2017

THL Building Material Handling Platform

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Material Handling Systems, a portfolio company of Thomas H. Lee Partners, has acquired Atronix Engineering, a controls systems integrator, and Advanced Production Systems (APS), a designer and assembler of control panels.

Material Handling Systems (MHS) was acquired by Thomas H. Lee Partners in April 2017. MHS provides engineering services and equipment, project management, and installation services to the parcel industry with design, implementation, and maintenance of turnkey material handling sortation and distribution systems. Customers of MHS include some of the top logistics and e-Commerce companies in the world. The company currently operates out of six facilities: four in Louisville, KY; one in Wilmington, OH; and the MHS Canada headquarters in Toronto. The company was founded in 1999 and is headquartered in Louisville (www.mhsinc.net).

“We are excited to welcome Atronix and APS to the MHS family, and believe that these acquisitions will further expand our geographical and customer footprint, product portfolio, and service offerings,” said Tony Mouser, Chief Executive Officer of MHS. “We have long-standing relationships with both Atronix and APS, and we are confident that a partnership with these fine companies will serve as a catalyst to further accelerate our growth, enhance our ability to serve our key customers, and pursue new business opportunities.”

Atronix’s controls and software are used in both factory automation and office automation in the material handling, warehouse distribution, automotive, and food & beverage markets. The company, led by President Tab Fischbach, was founded in 1992 and is based near Atlanta in Peachtree Corners, GA. The company has a second facility located near Toledo in Holland, OH (www.atronixengineering.com).

Advanced Production Systems (APS) specializes in electrical and pneumatic control panels which range in size from small wall mount units to multi-door electrical panels. The company’s products are used in a variety of applications in the food & beverage, automotive, material handling, metals, personal care products, and process control markets. APS, led by President Don Korfhage, was founded in 1986 and is based in Louisville (www.teamaps.com).

Thomas H. Lee Partners (THL) was founded in 1974 and is one of the oldest private equity investment firms in the United States. Industries of interest include consumer and healthcare, media and information services, and business and financial services. Since its founding, THL has raised approximately $22 billion of equity capital and acquired over 140 portfolio companies and completed over 360 add-on acquisitions. The firm is based in Boston (www.thl.com).

The acquisition of APS closed on October 2, 2017, and the acquisition of Atronix closed on October 31, 2017.

© 2017 Private Equity Professional | November 8, 2017

Bertram Keeps On Rolling

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Maxcess International, a portfolio company of Bertram Capital, has acquired Menges Roller Company.

Menges Roller is a designer and manufacturer of new and replacement industrial rollers – specifically chill rollers, heat transfer rollers and rubber rollers – that are used in the converting, plastic packaging, non-wovens, pulp & paper, and metal markets. The company also offers an array of services including repairs, re-covers, dynamic and static balancing, crowning, groove and serration work, acid flushing, chrome refinishing, precision grinding, and refurbishing.

Menges Roller was founded in 1966 by Louis Menges and is headquartered near Chicago in Wauconda, IL (www.mengesroller.com).

Post-closing, Director of Sales & Marketing Charlie Menges, who represents the third generation of ownership, will continue to work with the Menges team and President Matt Menges will remain as a shareholder and advisor to Maxcess.

“We are excited to partner with the Menges family and management team to continue building upon the success they have achieved over the past five decades,” said Tim Heston, Principal at Bertram Capital. “Consistent with Bertram’s value creation strategy, this transaction marks the fourth add-on acquisition for the Maxcess platform under our ownership and we plan to continue that strategy with other differentiated and market-leading businesses like Menges.”

Maxcess International is a designer and manufacturer of industrial rolls, converting components, and specialized machinery for web handling and converting applications (www.maxcessintl.com). The platform was formed through the acquisitions of Neenah, WI-based Webex in January 2013; Oklahoma City, OK-based Maxcess International in January 2014; and Appleton, WI-based Valley Roller in August 2015.

“The acquisition of a storied brand like Menges Roller Company adds tremendous value to our family of web handling companies,” said Greg Jehlik, CEO of Maxcess. “The breadth and depth of their product offering will complement our Webex and Valley Roller brands, further expanding the one-stop-shop advantage we bring to our customers.”

Bertram Capital invests in middle-market business services, consumer, healthcare, industrial and technology companies that have revenues from $30 million to $250 million and EBITDA of $5 million to $30 million. To drive growth and create vale in its portfolio companies, Bertram uses an investment strategy called “High 5” which focuses on five core operating principles – sales and marketing improvement, management support, supply chain optimization, technology optimization, and add-on acquisitions. The firm is headquartered in San Mateo, CA (www.bertramcapital.com).

© 2017 Private Equity Professional | November 7, 2017

Blackford Adds Kingsport Book to Platform

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Printing Consolidation Company (PCC), a portfolio company of Blackford Capital, has acquired Kingsport Book, a book finishing and fulfillment company.

Kingsport Book is a high-end book finishing and fulfillment company which specializes in deluxe, trade, and soft cover books at quantities ranging from one to a million. The company has a 120,000 square foot facility in Church Hill, TN. Fred Cooper, CEO of Kingsport Book, and CFO Rick Jennings will stay on to lead operations at Kingsport Book under PCC ownership.

“I am thrilled to expand and formalize, the longstanding relationship between Dickinson and Kingsport. I know our clients will benefit more now that we have a fully integrated company that plans to continue to grow and add new solutions,” said Mr. Cooper.

Kingsport Book is the second company in the book printing industry to be acquired by PCC. In August 2015 it acquired Dickinson Press, a book manufacturer and printing services provider.

Dickinson Press offers a variety of book production capabilities including sheet-fed lithographic printing, heat-set web lithographic printing, and digital printing. The company also offers warehouse and fulfillment services. The company produces various books and printed materials such as Bibles, dictionaries, reference books, children’s books, and a variety of other printed literature for the religious, business, and education markets. Dickinson was founded in 1884 and is headquartered in Grand Rapids, MI (www.dickinsonpress.com).

“The addition of Kingsport Book is in direct response to the needs of our customers. The ability to manufacture deluxe books domestically with very short turn times, is one of the core requests we have heard from our customers,” said Aaron Day, CEO of PCC.

“As we continue to grow PCC, we are focused on the companies that have industry-leading talent and are dedicated to exceeding the needs of their customers. It is hard to find a group of employees more dedicated to servicing the deluxe book market than the team at Kingsport Book,” said James Cook, Associate at Blackford Capital.

Blackford Capital invests in middle-market manufacturing, distribution, and service companies in both mature and growing industries. Target companies will have revenues of $20 million to $100 million and EBITDAs of $2 million to $20 million. Blackford currently has 11 portfolio companies located across the United States. The firm is headquartered in Grand Rapids, MI (www.blackfordcapital.com).

As a compliment to their full-service suite of deluxe book finishing, Kingsport Book has also developed a fulfillment and distribution division that has been rapidly growing in recent years and has the ability to expand significantly with this acquisition. As demand increases for same day and next day delivery, Kingsport Book is strategically located nearby major hubs for FedEx and UPS that will enable them to provide timely distribution.

© 2017 Private Equity Professional | November 7, 2017