Archives for December 13, 2017

Ironwood Invests in Blue Bell

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Ironwood Capital has made a subordinated debt and minority equity investment in Blue Bell Mattress, a manufacturer of private label and license-branded mattresses for customers in the retail mattress and furniture industry. Blue Bell is a portfolio company of Landon Capital Partners.

Blue Bell sells its mattresses under the Blue Bell Mattress and the King Koil brands and is considered to be one of the top ten mattress manufacturers in the US. Blue Bell, founded in 1928 and led by CEO Mark Kolovson, is headquartered north of Hartford in East Windsor, CT (www.bluebellmattress.com).

“Our investment was made to support Blue Bell’s acquisition of Comfort Mattress Company, the mattress manufacturing assets of Art Van Furniture,” said Alex Levental, Ironwood Capital Managing Director. “With this acquisition, Blue Bell is positioned as the dominant private label and King Koil manufacturer in both the Northeast and Midwest, with the ability to serve growing, super-regional customers.” Art Van Furniture, the Midwest’s largest furniture retailer and one of America’s largest independent furniture retailers, was acquired by Thomas H. Lee Partners in February 2017.

“Blue Bell positions itself as a partner to its customers instead of a vendor, with value-added services beyond manufacturing including product development, warranty returns and assistance with sales and marketing,” said Carolyn Galiette, Ironwood Capital’s President and Chief Investment Officer. “The company is diversified, providing mattresses across all price points and market segments. Its value-add business model and customer and price point diversification are attractive to us and to Blue Bell’s customer base.”

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).

Landon Capital Partners is the direct private equity investment group of the Landon family and invests in lower middle market companies that have from $5 million to $20 million of EBITDA. Sectors of interest include healthcare services, business services, niche manufacturing, and food and beverage. The firm was founded in 2015 and has offices in Boston and London (www.landoncapital.com).

© 2017 Private Equity Professional | December 13, 2017

Prototek Sheetmetal Acquired by CORE

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CORE Industrial Partners has acquired Prototek Sheetmetal Fabrication, a rapid prototyping service provider of CNC machined and sheet metal fabricated parts and components.

Prototek’s manufacturing capabilities include CNC machining, sheet metal fabrication, powder coating, chromating, anodizing, silk screening and assembly. The company can prototype parts from a range of materials including steel, stainless steel, mirrored stainless, aluminum, copper, Lexan and other plastics.

Prototek’s customers are active in the aerospace, defense, medical, robotics, electronics, consumer, and general industrial markets. The company was founded in 1987 by the Isabelle family and has a 60,000 sq. ft. facility and headquarters located 77 miles northwest of Boston in Contoocook, NH (www.prototekmanufacturing.com). As part of the transaction with CORE, General Manager Brian Francoeur will become Prototek’s president.

“Our investment in Prototek highlights CORE’s desire to invest in well-positioned lower middle-market industrials and manufacturing companies where we can leverage our extensive operating experience to execute against a diverse set of value creation initiatives and strategic growth avenues,” said John May, Managing Partner and Founder of CORE. “The combination of Prototek’s diverse blue-chip customer base, breadth of manufacturing capabilities and differentiated technical expertise were compelling factors in our decision to acquire the company.”

CORE Industrial Partners makes control investments in companies that have revenues from $10 million to $200 million and EBITDA of up to $15 million. Sectors of interest include aerospace and defense; automotive and transportation; building and Infrastructure Products; electrical and power products; flow controls; engineered components; machinery and equipment; paper and packaging; test measurement and automation; specialty materials; textiles; and chemicals. CORE was founded in 2017 and is headquartered in Chicago (www.coreipfund.com).

Monroe Capital (www.monroecap.com) was the sole lead arranger and administrative agent on a senior credit facility to support the acquisition of Prototek by CORE.

© 2017 Private Equity Professional | December 13, 2017

Riverside Sells Outward Hound to J.W. Childs

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The Riverside Company has sold Kyjen (DBA Outward Hound), a pet products company that it acquired in August 2013, to J.W. Childs Associates.

Outward Hound is a designer and distributor of pet toys and other pet accessories such as travel gear, games and life jackets. The company’s products are sold under the Outward Hound, Petstages, Dublin Dog, Bionic and Nina Ottosson brands. Outward Hound is headquartered near Denver in Centennial, CO (www.outwardhound.com).

During Riverside four-year hold the firm expanded Outward Hound’s products, customers and markets through the add-on acquisitions of Bionic Pet Products (Ladera Ranch, CA) in January 2015; Zoo Active Products AB (Karlskoga, Sweden) in September 2015; Petstages (Northbrook, IL) in October 2015; and Dublin Dog (Madison, NC) in November 2016. In addition to diversifying Outward Hound into new dog products, the add-ons introduced the cat market to the company. These efforts helped the company expand relationships with existing customers while entering new channels, such as big-box retailers.

“Our add-on strategy quickly accelerated growth,” said Riverside Managing Partner Loren Schlachet. “But we also made key investments in Outward Hound’s creative, sales and marketing teams to ensure a consistent flow of innovative product releases that captured further market share.”

Riverside further built shareholder value in Outward Hound through operational improvements that increased operating margins, streamlined the supply chain and improved product development. The company also on-shored some manufacturing in order to lower costs. “We were able to find millions of dollars in savings while continuing to expand the company,” said Riverside Principal Steve Rice. “The company not only became bigger, it became more effective and capable during the hold.”

Partner Joe Lee, Operating Partner Bill White, Associate Josh Smith and Finance Director Gary Schlegel worked with Mr. Schlachet and Mr. Rice on the transaction for Riverside.

The Riverside Company is a global private equity firm focused on investing in and acquiring growing businesses valued at up to $400 million. Since its founding in 1988, Riverside has invested in more than 490 transactions and its portfolio includes more than 80 companies. The firm is headquartered in New York with 16 additional US and international offices (www.riversidecompany.com).

“We’re excited about our investment in Outward Hound and the fantastic leadership team that has built one of the fastest growing brands in the pet space,” said J.W. Childs Partner David Fiorentino. “The innovative product portfolio in multiple categories creates exciting opportunities to deliver great products for pet parents and accelerate growth.” J.W. Childs invests in middle market companies based in North America. Sectors of interest include consumer products, specialty retail and healthcare. The firm was founded in 1995 and is based in the Boston suburb of Waltham, MA (www.jwchilds.com).

Outward Hound’s founder, Kyle Hansen, will retain a significant stake in the business alongside J.W. Childs. “Outward Hound will continue creating innovative products in the pet space and could not be more excited about our new partnership with J.W. Childs that will benefit both our retail partners and consumers,” said Mr. Hansen. “We completed four acquisitions over the last three years including Petstages, Dublin Dog, Nina Ottosson and Bionic with the goal now of further expanding our portfolio in current and new categories.”

Denver-based investment bank CapitalValue Advisors (www.capitalvalue.net), which originally introduced Outward Hound to Riverside, was the financial advisor to Riverside on the sale of the company to J.W. Childs.

© 2017 Private Equity Professional | December 13, 2017

TCF Expands Relationship with Prairie’s StyleCraft

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TCF Capital Funding has provided an expanded financing commitment to StyleCraft Home Collection, a portfolio company of Prairie Capital. The additional availability will be used to back the continued growth of the company and to provide a dividend and share buyback facility for its shareholders.

StyleCraft, founded in 1968, is a designer and marketer of residential lighting (accent, buffet, desk, floor, and table lamps), wall décor (clocks, framed prints, and mirrors), decorative accessories (baskets, boxes, trunks, and candle holders), accent furniture (chairs, ottomans, chests, desks, and consoles), as well as decorative pieces for the outdoor and garden categories.

StyleCraft sells its products to more than 3,000 independent home furnishings stores in the US and internationally as well as to major retailers and through e-commerce channels. The company has an international product sourcing network, including an on-the-ground presence in Dongguan City, China. StyleCraft has showrooms in Highpoint, Las Vegas, Dallas, Atlanta, and Tupelo, and has a 275,000 sq. ft. headquarters and warehouse facility located south of Memphis in Southaven, MS (www.stylecraftonline.com).

Prairie Capital partnered with members of StyleCraft’s founding family and other members of the senior management team to recapitalize the company in February 2015.

“StyleCraft’s unique product development capabilities enable it to quickly meet the needs of a very demanding customer base,” said TCF Capital Funding Senior Vice President Ed Ryczek. “The company has done a remarkable job growing its various product categories in a rapidly changing retail environment, and we are excited to support this growth and expand our ongoing relationship with StyleCraft and Prairie Capital.”

TCF provides cash flow and asset-based lending to lower middle-market businesses.  National in scope, this senior leveraged lending group focuses on providing private equity sponsor-backed cash flow loans and asset-based loans to companies with less than $100 million in revenue and between $2 million and $10 million in EBITDA.  The firm is based in Chicago (www.tcfcapitalfunding.com).

Prairie Capital invests in lower middle market companies and corporate carve-outs. Typical investments will have annual revenues of $20 million to $100 million and cash flows of $4 million to $12 million.  Sectors of interest include business services, industrial products and services, consumer products, education, financial services, and healthcare. Prairie Capital was founded in 1997 and is based in Chicago (www.prairie-capital.com).

© 2017 Private Equity Professional | December 13, 2017