Archives for 2018

Greif to Acquire H.I.G.’s Caraustar

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Publicly-traded Greif has agreed to acquire Caraustar Industries, a portfolio company of H.I.G. Capital, for $1.8 billion in cash.

Caraustar is one of North America’s largest integrated manufacturers and converters of 100% recycled paperboard and converted paperboard products. Caraustar serves end-use markets in tube and core, folding carton, gypsum facing paper and specialty paperboard products.

Caraustar has more than 80 operating facilities throughout the United States. The company, led by CEO Mike Patton, was founded in 1938 and is based in Austell, GA (www.caraustar.com).

For the last twelve months ended September 30, 2018 Caraustar had sales of $1.4 billion and an EBITDA of $174 million. With a purchase price of $1.8 billion this equates to a TTM EBITDA valuation multiple of 10.3x. Greif has provided an Adjusted EBITDA (adjusted for current market conditions as of September 30, 2018) of $220 million which results in an Adjusted TTM EBITDA valuation multiple of 8.2x. Grief has also identified approximately $45 million of annual run-rate cost synergies that could be achieved within three years that would further increase the Adjusted TTM EBITDA to a proforma amount of $265 million.

“Caraustar offers an exceptional strategic and cultural fit for Greif,” said Greif’s President and Chief Executive Officer, Pete Watson. “Its complementary paper packaging and recycled fiber operations will drive significant free cash flow growth, improve balance and profitability within the Greif portfolio and increase Greif’s exposure to U.S. industrial and consumer end markets.”

Greif (NYSE: GEF) is a provider of industrial packaging products and services. The company produces steel, plastic and fiber drums, intermediate bulk containers, reconditioned containers, flexible products, containerboard and packaging accessories and provides filling, packaging and other services for a wide range of industries.

Greif has annual revenues of approximately $3.8 billion and operates from 200 facilities in more than 40 countries. Greif is headquartered north of Columbus in Delaware, OH (www.greif.com).

H.I.G. acquired Caraustar in May 2013 from Wayzata Investment Partners which had acquired the company in 2009 through a pre-packaged chapter 11 process. H.I.G. specializes in providing capital to small and medium-sized companies and invests in management-led buyouts and recapitalizations of manufacturing and service businesses. H.I.G. has more than $25 billion of capital under management. The firm is based in Miami with additional offices in New York, Boston, Chicago, Dallas, Los Angeles, San Francisco, Atlanta, London, Hamburg, Madrid, Milan, Paris, Bogotá, Mexico City and Rio de Janeiro (www.higcapital.com).

Rothschild & Co and Credit Suisse were the financial advisors to Caraustar on this transaction and Goldman Sachs & Co. advised Greif.

Wells Fargo Bank, Goldman Sachs Bank USA and JP Morgan Chase Bank have provided financing commitments for this transaction which is expected to close during the first quarter of 2019.

© 2018 Private Equity Professional | December 20, 2018

Warren Acquires StormTrap

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Warren Equity Partners has acquired StormTrap, a provider of stormwater management products to the municipal, commercial, industrial, and residential markets.

StormTrap designs and engineers precast concrete systems that store stormwater runoff in underground chambers before releasing it at a controlled rate or harvesting it for reuse. In addition, the company also provides water quality systems that remove pollutants and contaminants from stormwater runoff. StormTrap, led by President Bob McCormack, is headquartered near Chicago in Romeoville, IL (www.stormtrap.com).

Warren Equity acquired a majority interest in StormTrap from the Hawken family, who founded the company in 2002. The Hawken family invested alongside Warren Equity in the transaction and will remain on the board of directors going forward.

“We chose Warren Equity due to their prior experience investing in companies targeting similar end markets, as well as the strong cultural fit with the StormTrap team,” said Mr. McCormack. “With Warren Equity, we have found a partner who will help support our growth strategy and provide valuable guidance during our next chapter of growth.”

“StormTrap is a great fit for Warren Equity given our focus on the infrastructure market and the company’s focus on providing solutions to remedy overburdened stormwater systems,” said Scott Bruckmann, a partner at Warren Equity. “StormTrap is well positioned to continue to serve the growing demand for stormwater management systems, and we are excited to help the company expand their geographic footprint and product offering. We look forward to partnering with the Hawken family and StormTrap’s exceptional management team.”

Warren Equity invests from $5 million to $40 million in North American-based companies that have from $3 million to $15 million of EBITDA. Sectors of interest include industrial, infrastructure, and business services. The firm is based in Jacksonville Beach, FL (www.warrenequity.com).

“Over its 16-year history, StormTrap has grown into a market leader for underground concrete stormwater systems through continuous development of new technologies and products,” said Jamie Hawken, board member of StormTrap, “We are looking forward to working with Warren Equity to grow the company in North America and internationally.”

William Blair & Company (www.williamblair.com) was the financial advisor to StormTrap on this transaction.

© 2018 Private Equity Professional | December 20, 2018

Incline Buys Charter Industries

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Incline Equity Partners has acquired Charter Industries, a supplier of PVC and veneer edgebanding, plastic and metal laminates, sheet veneer, and T-molding products used by specialty carpenters and furniture installers.

Charter’s edgebanding products are produced in a variety of colors, sizes and patterns and are sold as finishing products for use in a range of applications by furniture and case good manufacturers operating in the education, healthcare, retail, hospitality, commercial, recreational vehicle and residential markets. Some of the company’s product applications include dormitory furniture, medical facility casework, point-of-sale kiosks, store fixtures, and school lockers.

Charter, led by its founder and CEO Pete Eardley, is headquartered in Grand Rapids, MI and has four additional locations in Albany, NY; Jacksonville, FL; Fresno, CA; and Dallas, TX (www.charterindustries.com).

“We are excited to have partnered with Pete Eardley and the entire management team at Charter,” said John Morley, a managing director with Incline. “The company’s clients rely upon Charter’s industry-best lead times, incredible breadth and depth of inventory, same-day shipping capabilities and overall dedication to customer service, and we’re delighted to be a part of such an organization.”

Incline Equity Partners 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 $25 million and $300 million. Sectors of interest include value-added distribution, specialized light manufacturing, and business services.  Incline was formed in 2011 and is based in Pittsburgh (www.inclineequity.com).

Quarton International (www.quartoninternational.com) was the financial advisor to Charter Industries on this transaction.

© 2018 Private Equity Professional | December 20, 2018

Gryphon Adds to HEPACO

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HEPACO, a portfolio company of Gryphon Investors since August 2016, has acquired Environmental Management Specialists, a provider of emergency response, remediation, and environmental services.

Cleveland-based Environmental Management Specialists (EMS) has 185 employees and operates across 11 locations in Ohio, Indiana, Pennsylvania, and Kentucky. The company’s services include emergency response, vacuum truck services, industrial cleaning, confined space entry services, waste transportation, site remediation, facility decontamination, equipment decommissioning, and lab packing (www.emsonsite.com).

EMS is led by its founder and CEO Jon Ransom who will join the HEPACO executive team after the closing of the transaction and he will maintain a significant equity stake in the combined company

HEPACO is a provider of emergency response, environmental remediation, maritime services, wastewater treatment, and other industrial services across a range of end markets including rail, oil & gas, transportation, power & utility, and manufacturing. The company provides services on both an emergency response and planned basis and in 2017 completed more than 6,500 projects. HEPACO has 31 locations across more than 20 states in the Mid-Atlantic and Southeastern United States and offers a three-hour or less response time within this geographic footprint. The company, led by CEO Ken Smith, was founded in 1984 and is headquartered in Charlotte (www.hepaco.com).

The combination of HEPACO and EMS creates a company with more than 685 employees and a footprint of over 40 locations across the Southeast, Mid-Atlantic, Midwest, and Northeast regions in addition to the ability to respond to emergencies on a national basis through its managed network of third-party emergency response vendors.

“We are very excited to have completed the highly strategic acquisition of EMS and to partner with Jon Ransom and his team,” said HEPACO Chairman and Gryphon Operating Partner Phil Petrocelli. “EMS’ complementary geographic footprint and strong performance represent an attractive path for HEPACO’s continued growth.”

The buy of EMS follows HEPACO’s October 2018 acquisition of Trans Environmental, a provider of environmental and emergency response services headquartered near Rockford in Loves Park, IL (www.transenvironmental.com).

Gryphon makes leveraged acquisitions and growth investments in middle-market companies. The firm invests from $50 million to $200 million of capital in companies with sales ranging from $100 million to $500 million. Sectors of interest include business services, consumer and retail, automotive, chemical, general manufacturing, healthcare and hotels.

Gryphon closed its fourth private equity buyout fund, Gryphon IV LP, in November 2016 at $1.1 billion, and raised a $100 million captive mezzanine fund, Gryphon Mezzanine Partners LP, in August 2017. Gryphon Investors is based in San Francisco (www.gryphoninvestors.com).

EdgePoint Capital Partners (www.edgepoint.com) was the financial advisor to EMS on this transaction.

© 2018 Private Equity Professional | December 20, 2018

Windjammer Buys Xantrex from Schneider

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Mission Critical Electronics, a portfolio company of Windjammer Capital, has acquired the Xantrex division of Schneider Electric.

Xantrex is a developer and manufacturer of power electronic products and systems used in the mobile power markets including commercial truck, recreational vehicle, marine, automotive, military and consumer markets. The company’s products include inverters, inverter/chargers, battery chargers, backup power and accessories for a range of entry-level to high-end applications.Xantrex, led by Vice President and General Manager Richard Gaudet, operates from facilities in Burnaby, BC (headquarters) and Elkhart, IN (www.xantrex.com).

Mission Critical Electronics (MCE) is a provider of power conversion, battery charging, and battery products used in specialty vehicle, public safety, and industrial applications. The company has more than 2,000 SKU’s and sells its products under the Kussmaul, Newmar, ASEA, Power Products, and American Battery Charging brands. MCE is headquartered in Huntington Beach, CA (www.mission-critical-electronics.com). MCE was acquired by Windjammer in September 2016 through its fourth fund.

“We are delighted to have Xantrex join MCE,” said Kevin Moschetti, chief executive officer of MCE. “Its products are high quality, technologically advanced, and valued by its customers. Moreover, the portfolio of mobile power products, end markets, and distribution partners of Xantrex are highly complementary to MCE.”

“We are excited to work with and support the management team at Mission Critical Electronics in their ongoing organic and acquisition-oriented growth strategies,” said Matt Anderson, a managing director at Windjammer. “The acquisition of Xantrex’s mobile power assets furthers MCE’s capabilities and end market reach, helping the company to achieve its mission: keeping the world energized and ready, by delivering power solutions where quality and responsiveness matter.”

Windjammer invests equity and subordinated debt as a control investor in middle market businesses located in the US or Canada that have EBITDA from $10 million to $50 million. Sectors of interest include niche manufacturing, business services and value-added distribution. The firm’s investment size will range from $50 million to $200 million per transaction. Windjammer was founded in 1990 and is based in Newport Beach, CA and Waltham, MA (www.windjammercapital.com).

Earlier this month, Windjammer closed its fifth fund, Windjammer Senior Equity Fund V LP, at the hard cap of $870 million. The firm’s earlier fund closed in March 2013 with $726 million of committed capital.

Publicly-traded Schneider Electric (Euronext: SU), the seller of Xantrex, is a French multinational corporation that specializes in building automation, switches and sockets, industrial safety systems, industrial control systems, electric power distribution, electrical grid automation, and power and cooling systems for datacenters. The company had revenue in 2017 of €24.7 billion and is headquartered near Paris in Rueil-Malmaison (www.schneider-electric.com).

Lincoln International was the financial advisor to Schneider Electric on this transaction.

© 2018 Private Equity Professional | December 19, 2018

Pamplona Invests in Latham Pool Products

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Pamplona Capital Management has acquired a controlling interest in Latham Pool Products from Wynnchurch Capital, which will remain a significant investor in the company. This transaction values Latham Pool at $375 million.

Pamplona’s investment in Latham will be made from its $3.2 billion fifth private equity fund, Pamplona Capital Partners V LP, which closed in 2017.  Wynnchurch acquired Latham in August 2015 from Littlejohn & Co. which in turn had acquired the business in 2010 following a Chapter 11 restructuring.

Latham manufactures in-ground and above-ground vinyl liners, polymer and steel pool wall systems, fiberglass pools, steps, ladders, pool safety covers, automatic pool covers and a variety of other pool related accessories.  The company has over 20 manufacturing facilities and distribution centers across the US and Canada. Latham, led by CEO Scott Rajeski, was founded in 1956 and is headquartered north of Albany in Latham, NY (www.lathampool.com).

“Latham is a much stronger and different company today than it was five years ago. I am very appreciative of all the support Wynnchurch has provided us over the last three years and I believe Pamplona is the right partner to help to accelerate our growth strategy going forward,” said Mr. Rajeski.

“We are excited to work with Wynnchurch and the Latham management team to build on the Company’s 62 years of customer relationships and market leadership,” said Russell Gehrett, a partner at Pamplona. “Latham already has a reputation for building the most reliable, high quality, innovative, and affordable pools in the industry, and this will remain the focus going forward.”

Pamplona makes direct private equity, fund of hedge funds, and single manager hedge fund investments. The firm manages over $12 billion in assets across a number of funds for a variety of clients including public pension funds, international wealth managers, multinational corporations, family offices, and funds of hedge funds. Pamplona was founded in 2005 and is based in London and New York (www.pamplonafunds.com).

“We are very pleased with the extraordinary progress that Latham has made and believe the business, under Scott Rajeski’s leadership, is poised for future growth,” said Chris O’Brien, a managing partner at Wynnchurch. “Pamplona brings global resources and significant experience supporting growth businesses, which will help continue Latham’s development as the leader in the pool industry.”

Wynnchurch makes investments in middle-market companies that have revenues of $50 million to $1 billion. Sectors of interest include aerospace & defense, automotive, building products, chemicals, food, logistics, energy services & equipment, environmental services, industrial products & services, metals & mining, and paper & packaging. The firm was founded in 1999 and is located in the Chicago suburb of Rosemont with additional offices in Los Angeles (El Segundo), and Toronto (www.wynnchurch.com).

William Blair and Moelis were the financial advisors to Wynnchurch and Latham Pool Products on this transaction.

© 2018 Private Equity Professional | December 19, 2018

O2 Sells NTI Connect to ORIX

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O2 Investment Partners has sold NTI Connect, a provider of cable, telecom, engineering and installation services, to ORIX Capital Partners.

NTI Connect provides specialized fiber optic technical services including fiber optic splicing, testing, connectivity and data center build-outs to fiber, wireless and broadband carriers, cable companies, data center operators and telecom companies.

NTI maintains 10 offices throughout the country and has several travel teams, allowing it to provide its services on a national scale. The company is led by its CEO Lynn Refer and is headquartered in the Chicago suburb of West Chicago (www.nti-connect.com).

“O2 was an outstanding partner in the creation of value during the ownership period and was instrumental in expanding the NTI platform into new markets and service lines,” said Mr. Refer.

NTI Connect was established by O2 with the initial acquisitions of National Technologies (www.national-technologies.com) and NTI Fiber (www.ntifiber.com) in October 2015. The platform was expanded with the acquisition of CCSI Networks (www.ccsinetworks.com) in July 2016 and the buy of Fairhaven Integration Services (www.fairhavenllc.com) in May 2017.

“NTI Connect is truly a differentiated industry leader in network deployment solution services,” said Luke Plumpton, a partner at O2. “Through management’s execution of the strategic plan, NTI achieved strong growth, expanded its market share, grew its service offering and ultimately exceeded our expectations in delivering an excellent outcome for the shareholders and our investors.”

O2 makes control investments of $5 million to $75 million in companies with EBITDAs from $2 million to $10 million located anywhere in the US and Canada but has a preference for the Midwest and the Great Lakes regions. Sectors of interest include niche manufacturing, niche distribution, select service businesses, and certain technology businesses. In October 2017, the firm held a final closing of its Oxygen Fund with an above-target $100 million of capital commitments. O2, based in the Detroit suburb of Bloomfield Hills, is backed by the Orley family which has been investing in operating businesses and real estate since 1950 (www.o2investment.com).

ORIX Capital Partners, the buyer of NTI Connect, invests from $75 million to $200 million of equity per transaction in North America based middle-market companies that are active in the business services, infrastructure services and industrials sectors. New York-based ORIX Capital Partners is a business unit of ORIX USA, a Dallas-based financial services firm. Its parent company, ORIX Corporation, is a Tokyo-based, publicly owned financial services company with operations in 38 countries and regions worldwide (www.orixcapitalpartners.com).

“The NTI team has built a company that is an exceptional and differentiated national leader in network deployment solution services,” said Terry Suzuki, president and CEO of ORIX Capital Partners. “Our country’s demand for highly scalable data capacity, ever-increasing fiber optic network reach, the upcoming 5G wireless revolution and upgraded video networks will drive growing demand for the services provided by NTI.”

Under ORIX ownership the NTI management team will remain in place to continue building the company through organic growth initiatives and add-on acquisitions. “Having demonstrated high-quality services, dependability and exceptional results for their blue-chip customers, NTI is a leader in the networking industry,” said Chris Suan, senior managing director at ORIX Capital Partners. “We are excited to partner with the NTI team to build on their growth and momentum.”

Stifel (www.stifel.com) was the financial adviser to NTI for this transaction.

© 2018 Private Equity Professional | December 18, 2018

Incline Partners Again With Caldwell & Gregory

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Incline Equity Partners, for the second time, has acquired laundry services provider Caldwell & Gregory. Incline originally invested in the company in October 2008 and later sold the company to Carousel Capital in June 2013.

Caldwell & Gregory (C&G) is a provider of laundry facility management services for customers in the university and multifamily housing markets. The company owns and services over 50,000 laundry machines across 23 states and the District of Columbia.

In addition to its state-of-the-art equipment and strong service function, C&G also provides its customers with other benefits such as machine activation by smartphone and electronic payment options. These benefits increase user satisfaction and solidify recurring revenues. The company was co-founded by John Gregory, current board chairman, and is led by its CEO Bob Dinnie. C&G is headquartered near Richmond in Manakin-Sabot, VA (www.caldwellandgregory.com).

“We kept in touch with the management team and have often caught up on the company’s progress since exiting our partnership with them in 2013,” said Justin Bertram, a partner with Incline. “They’ve done a tremendous job of growing the business over the past five years while continuing to utilize a superior service model that invests significant labor and capital to ensure that its customers’ facilities are operating effectively. We couldn’t be happier to be supporting C&G and its management team again through the next phase of growth.”

“One of C&G’s key differentiators is its consultative, collaborative approach and commitment to outstanding customer service. This is a shared value with Incline,” said Mr. Dinnie. “Our partnership will allow us to remain true to our core values, while also providing for continued financial stability. We trust Incline to help us better assess and prioritize the multiple avenues for growth ahead of us and to support our management team. It is exciting to once again partner with people we trust and enjoy working with.”

Incline Equity Partners 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 $300 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).

© 2018 Private Equity Professional | December 18, 2018

Lariat Sells Ecoserv Subsidiary

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Lariat Partners has sold Ecoserv Industrial Disposal (IDF), a wholly owned subsidiary of Ecoserv, to publicly traded US Ecology for $87.2million.

Lariat formed Ecoserv in March 2014 through the merger of Houston-based Newpark Environmental Services, a provider of offshore waste disposal services, with Offshore Cleaning Systems, a provider of offshore cleaning services. Ecoserv is headquartered near Baton Rouge in Abbeville, LA (www.ecoserv.net).

Under Lariat’s ownership, Ecoserv focused on decentralizing its business into smaller more specialized units and then empowered the divisional management teams to invest in growing their individual business units. The IDF division experienced tremendous growth and success under this approach.

Ecoserv Industrial Disposal (IDF) is a provider of non-hazardous industrial wastewater (NIW) disposal services. Utilizing deep-well injection technology, the company operates several of the only commercial caprock injection wells fully permitted for difficult to treat Class 1 and 2 NIW streams, including solids, sludges, high metals, flammable exempt, leachate, and ammonia. The company, headquartered in n Winnie, TX, is strategically located near key markets such as Houston and Beaumont, TX and Lake Charles, LA, and can provide disposal services to petrochemical, refinery, chemical, industrial, and environmental services customers. Click HERE for the IDF webpage.

We are very pleased to complete this successful transaction and we would like to thank Yvonne Hudspeth, IDF’s divisional manager,” said Kevin Mitchell, co-founder and managing partner of Lariat. “Under Yvonne’s leadership, IDF became a leading NIW disposal solutions provider in the Gulf Coast region. This transaction enables Ecoserv to focus on both its core environmental cleaning and waste disposal services business as well as its Ecorobotics technology.”

Lariat invests in lower middle market companies that have EBITDA of $2 million to $20 million. The firm targets companies across a number of industries including consumer products, energy and environmental services, food and agribusiness, healthcare services, marine services, safety products and services, and specialty distribution. The firm was founded in January 2013 and is based in Denver (www.lariatpartners.net).

US Ecology (NASDAQ-GS: ECOL), the buyer of the IDF division, is a provider of environmental services to commercial and government entities. The company’s services include the treatment, disposal and recycling of hazardous, non-hazardous and radioactive waste, as well as a wide range of complementary field and industrial services. US Ecology was founded in 1952 and is headquartered in Boise (www.usecology.com).

US Ecology expects the operations of IDF to contribute approximately $9 million to $10 million of adjusted EBITDA in 2019. “This acquisition adds unique, high volume industrial liquids disposal capabilities, complements other investments we’ve made in the region, and strengthens our comprehensive environmental services offerings,” said Jeff Feeler, US Ecology’s chairman, president and chief executive officer. “The facility, permitted for a wide variety of non-hazardous industrial waste including solids, sludges, leachate, and ammonia, offers a lower cost alternative to traditional wastewater treatment.”

Brown Gibbons Lang & Company (www.bglco.com) was the financial advisor to Lariat and Ecoserv on this transaction.

© 2018 Private Equity Professional | December 18, 2018

Ridgemont Closes Above Target

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Ridgemont Equity Partners has held an oversubscribed final closing of Ridgemont Equity Partners III LP (REP III) with $1.65 billion in commitments. The new fund’s original target had been $1.25 billion.

Investors in REP III include returning investors combined with significant interest from new investors. The general partner also made a substantial commitment to the fund.

“Our limited partners have been pleased with our ability to drive attractive returns by being the partner of choice for management teams building leading and distinctive companies in their respective industries. The confidence and continued support from our investor base are gratifying as we look forward to the opportunities and challenges of today’s market,” said Walker Poole, a partner at Ridgemont.

Ridgemont focuses on middle market buyout and growth equity investments of $50 million to $250 million. The firm invests in the following sectors: business and industrial services, energy, healthcare, and technology and telecommunications. With the closing of REP III, Ridgemont has now raised more than $4 billion across five funds since its founding in 2010. The firm is headquartered in Charlotte with an additional office in Dallas (www.ridgemontep.com).

“We are excited to announce the closing of REP III and the next chapter of our sector-focused investment strategy,” said Travis Hain, a partner at Ridgemont.

Credit Suisse Securities (USA) was the placement agent for this fundraise and Proskauer Rose provided legal services.

Ridgemont’s earlier fund, Ridgemont Equity Partners II LP, closed in November 2015 with $995 million of capital.

© 2018 Private Equity Professional | December 18, 2018

Gladstone Acquires Educators Resource

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Gladstone Investment has acquired Educators Resource in partnership with the company’s senior management team. Gladstone provided both equity and senior debt to complete the transaction.

Educators Resource is a wholesale distributor of school supplies and K-12 supplemental teaching materials to e-retailers and brick-and-mortar stores nationwide. The company carries more than 25,000 SKUs for physical education, arts & crafts, curriculum and teacher resources, toys & games, furniture & equipment, school supplies, books & music, and classroom decorations.

Educators Resource is headquartered in Mobile, AL (www.educatorsresource.com).

“Educators Resource is a leader in e-commerce fulfillment, providing a value-added, turnkey solution to resellers of supplemental teaching materials. We are excited to partner with the talented team at Educators Resource and look forward to helping the company as it enters its next phase of growth,” said Peter Roushdy, a managing director at Gladstone.

Gladstone Investment (NASDAQ: GAIN) is a publicly-traded business development company that makes debt and equity investments in US-based small to middle-market businesses. The firm generally invests from $5 million to $30 million of debt and equity in companies that have from $3 million to $20 million in EBITDA. Gladstone Investment is based in McLean, VA (www.gladstoneinvestment.com).

© 2018 Private Equity Professional | December 17, 2018

Keystone Acquires MERGE from Baird

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Keystone Capital has acquired MERGE, a marketing and technology services agency, from Baird Capital which acquired the company in November 2012.

MERGE’s capabilities include business and digital strategy, brand development, creative advertising, digital marketing execution, digital design and content creation, data analytics, custom technology development and media services. The company is active in a number of market sectors but has specific expertise in healthcare. MERGE has more than 270 employees across offices in Chicago (headquarters), Boston, and Atlanta (www.mergeworld.com).

With the transaction closed, Ron Bess has been named as executive chairman of MERGE and he will remain as CEO of the company. Joining MERGE also as CEO is Patrick Venetucci, a 30-year industry veteran with previous executive roles at Leo Burnett Worldwide and Dentsu Aegis.

“We are thrilled to begin our partnership with Keystone Capital,” said Messrs. Bess and Venetucci in a combined statement. “We see tremendous opportunity to build on the strong foundation developed over the past two years. Keystone’s unique approach to patiently investing their personal capital alongside management with a focus on long-term value creation is the perfect fit for our employees and our clients. In addition, Keystone’s deep understanding of marketing and technology-enabled services will provide us with an experienced strategic partner to help achieve our goals for organic growth and complementary acquisitions.”

Keystone Capital invests in middle market companies with EBITDAs of $2 million to $15 million. Sectors of interest include professional services and consulting, business services, industrial technology and manufacturing, food and beverage, and consumer products. The firm was founded in 1994 and is based in Chicago (www.keystonecapital.com).

“Keystone is excited to partner with the talented team at MERGE to continue building on their success serving clients at the intersection of marketing and technology,” said Bill Sommerschield, a principal at Keystone Capital. “We and management see a substantial opportunity to further enhance MERGE’s differentiated capabilities, end-market expertise, and client-centric service approach through internal growth and talent development initiatives as well as targeted acquisitions.”

Baird Capital, the seller of MERGE, makes venture capital, growth equity and private equity investments in the healthcare, industrial products and services, and technology services sectors. The firm is based in Chicago with additional offices in Milwaukee, London and Shanghai (www.bairdcapital.com).

New York-based investment bank JEGI (www.jegi.com) was the financial advisor to MERGE on this transaction.

Senior debt financing was provided by Wintrust Bank (www.wintrustbank.com).

© 2018 Private Equity Professional | December 17, 2018

Wind Point Adds to Pestell

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Pestell Group, a portfolio company of Wind Point Partners, has acquired Targeted Pet Treats.

Targeted Pet Treats (TPT) is a co-manufacturer of dental treats and chews for pets. The company, co-owned by Rhonda Haverlack and Elliott Haverlack, was founded in 2000 and is headquartered in Warren, PA (www.targetedpettreats.com).

Pestell operates through two business units: Pestell Minerals and Ingredients (PMI), a distributor of animal feed minerals and ingredients for a variety of livestock; and Pestell Pet Products (PET), a full-line manufacturer of branded and private label cat litter and small animal bedding products. Both PMI and PET operate out of shared warehousing and manufacturing space near Toronto in New Hamburg, ON (www.pestell.com).

Wind Point acquired Pestell in partnership with consumer packaged goods executive Matt Miller in June 2018. Mr. Miller most recently, from March 2014 to December 2016, was the Senior Vice President and General Manager of Big Heart Pet Brands, a producer, distributor and marketer of branded pet products, and a division of the The J.M. Smucker Company. J.M. Smucker acquired the company in March 2015 from Vestar Capital Partners.

The acquisition of Targeted Pet Treats is complementary to Pestell’s PET business and provides Pestell entry into the growing dental treat market.

“On behalf of everyone at Pestell, I am thrilled to welcome the Targeted Pet Treats family into our organization,” said Mr. Miller. “This combination expands Pestell’s product breadth into complementary products, allowing us to better serve our customers’ pet product needs. The TPT team, led by Greg Austin, has built a strong brand and culture which we are excited to now be a part of.”

“TPT is a perfect fit with Pestell and the acquisition helps us continue our strategic vision of building a diversified pet products platform,” said Paul Peterson, a managing director with Wind Point. “We believe TPT is poised for continued growth and look forward to partnering with the TPT team to further expand our presence in the treats space.”

The buy of TPT is Pestell’s second under Wind Point ownership. In October 2018, the company acquired BPV Environmental, a Byron Center, MI-based manufacturer of paper-based animal litter, small animal bedding, and lawn and garden products (www.bpvenvironmental.com).

Wind Point invests from $50 million to $100 million in companies with EBITDAs of at least $10 million. Industries of interest include business services, consumer products and industrial products. In June 2017, Wind Point held a final closing of its eighth fund, Wind Point Partners VIII LP, 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. The firm was founded in 1984 and is based in Chicago (www.wppartners.com).

Antares Capital, BMO Sponsor Finance and PennantPark led the debt financing for this transaction.

© 2018 Private Equity Professional | December 17, 2018

 

PPC Closes Plaskolite Buy

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PPC Partners has closed its previously announced acquisition of Plaskolite, a maker of transparent thermoplastic sheet products, from Charlesbank Capital Partners. PPC Partners signed a definitive agreement to acquire Plaskolite last month.

Plaskolite is the largest manufacturer of acrylic and other plastic sheet (ABS, PETG and polycarbonate) in the United States. Its products are used in a variety of end products including windows, doors, lighting, signs, point-of-purchase displays and bath products. Plaskolite’s customers include distributors, OEMs and retailers. The company operates out of 11 manufacturing facilities throughout the United States, Mexico and Turkey. Plaskolite was founded in 1950 by Donald Dunn and family and is headquartered in Columbus, OH (www.plaskolite.com).

PPC Partners invested alongside the Dunn family and Plaskolite’s management team, which will continue to lead the business. “We are delighted to partner with the Dunn family and management for the next phase of growth at Plaskolite. Plaskolite is a clear market leader with an outstanding team,” said Tony Pritzker, Chairman and CEO of PPC Partners.

“Plaskolite’s customized product approach provides a distinct competitive advantage,” said Michael Nelson, an Investment Partner at PPC. “The company has tremendous opportunities for growth, both through organic initiatives and accretive acquisitions.”

PPC Partners acquires North America-based middle-market companies that have enterprise values between $100 million and $750 million and EBITDA in excess of $15 million. Sectors of interest include manufactured products, services and healthcare.  The firm is led by Tony Pritzker and the former investment and operating professionals of Pritzker Group Private Capital. In July 2018, PPC Partners held a final closing of PPC Fund II LP at its hard cap of $1.8 billion. PPC Partners has offices in Chicago and Los Angeles (www.PPCPartners.com).

In November 2015, Charlesbank made the first outside equity investment in Plaskolite after three generations of ownership by the Dunn family. At that time, the management team co-invested alongside Charlesbank and the Dunn family maintained a substantial ownership position.

Charlesbank invests from $50 million to $250 million in management-led buyouts and growth capital financings in companies with enterprise values of $150 million to $1.5 billion. Sectors of interest include consumer, industrial, industrial services and distribution, TMT and business services. In October 2017, the firm held a final closing of Charlesbank Equity Fund IX at its hard cap of $2.75 billion. The firm has offices in Boston and New York (www.charlesbank.com).

William Blair (www.williamblair.com) was the financial advisor to PPC Partners on this transaction.

© 2018 Private Equity Professional | December 17, 2018

Ancor Sells Simply Fresh to Sequel

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Ancor Capital Partners has sold Simply Fresh Foods to Lakeview Farms, a portfolio company of Sequel Holdings.

Ancor acquired Simply Fresh Foods (then Fresh Food Concepts, the name was changed in January 2015) in December 2010. Today, Simply Fresh Foods produces fresh, all-natural foods for segments of the refrigerated products market across a range of channels.

Simply Fresh Foods markets its products under several brands including Rojo’s, which makes salsas and dips (www.rojossalsa.com), and San Francisco Foods, which makes seafood salads, grain salads, dips and spreads (www.sf-fds.com). The company is headquartered in Buena Park, CA (www.simplyff.com).

“Ancor has made significant investments to support Simply Fresh Foods and taken the company to the next level,” said Ray Kingsbury, a partner at Ancor Capital Partners. “We have enjoyed the lasting relationships and culture that we have been able to build within the company over the course of our investment. The operation’s exclusive portfolio of leading brands and superior distribution model into nontraditional retailers have provided a powerful platform to enhance the company’s value and establish Simply Fresh Foods as an elevated player in the industry.”

“Partnering with Simply Fresh Foods’ CEO Dale Jabour and his talented leadership team on key strategic initiatives has enabled us to expand the company’s foothold in this niche market,” added Mr. Kingsbury. “I am confident the company is well-positioned for continued, sustainable growth. We believe Lakeview Farms will be an excellent partner for Simply Fresh Foods going forward.”

Sequel Holdings acquired Lakeview Farms in February 2015. The firm previously held an ownership interest in the company beginning in 2004 then sold the company in 2011 to an investor group composed of Sankaty Advisors and Granite Capital Partners.

Today, Lakeview Farms manufactures, markets and distributes branded and private label dessert products, dips, and sour cream through the retail and foodservice channels, including major retailers and mass merchandisers. Company brand names include Lakeview Farms, as well as Luisa’s, Senor Rico and Winky.  Recently, Lakeview has focused on the growing Hispanic market, introducing products and brands in both the dessert and dip categories. The company was founded in 1988 and is based in Delphos, OH (www.lakeviewfarms.com).

Ancor Capital Partners invests in companies with enterprise values of $25 million to $150 million that have EBITDAs from $5 million to $15 million. Sectors of interest include health care, consumer staples, industrial manufacturing, automotive and emerging industries. The firm is headquartered in the Dallas suburb of Southlake, TX (www.ancorcapital.com).

Sequel Holdings invests in lower middle market companies that have EBITDAs greater than $4 million and enterprise values between $25 and $125 million.  Sectors of interest include food & beverage, agribusiness, plastics, and specialty materials.  The firm is headquartered in Dallas (www.sequelholdings.com).

© 2018 Private Equity Professional | December 14, 2018 

Capital Partners and Argosy Exit Roll·Rite

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Capital Partners and Argosy Private Equity have sold Roll·Rite to SafeFleet, a portfolio company of Oak Hill Capital Partners. Roll·Rite was acquired by Capital Partners and Argosy in October 2011 from Copeley Capital.

Roll·Rite designs and manufactures automated and semi-automated tarp systems that are used in heavy-duty trucking applications – particularly in the construction, agriculture, waste and recycling markets – to protect payloads. The company’s Roll·Rite and Pulltarps branded systems are sold to fleets, distributors, truckbody and trailer manufacturers.

It is estimated that there are more than 150,000 trucks and trailers on the road today equipped with a Roll·Rite or Pulltarps systems. Roll·Rite acquired El Cajon, CA-based Pulltarps Manufacturing in February 2017. Roll·Rite, led by President Brad Templeman, is headquartered 65 miles northwest of Saginaw in Gladwin, MI (www.rollrite.com).

During Capital Partners and Argosy’s term of ownership, Roll·Rite completed two add-on acquisitions, opened several service & installation centers, and initiated lean manufacturing strategies. As a result, Roll-Rite more than doubled its revenue and EBITDA over the hold period, resulting in a meaningful increase in the value of the business at exit.

“Our investors support and their equity-rich investment structure involving only moderate debt and a distribution income enabling long-term ownership, empowered Roll·Rite to accelerate its strategic development during our seven-year partnership,” said Mr. Templeman. “Together, our accomplishments included a larger, more-efficient plant, implementing lean manufacturing, increasing our investment in engineering and product development, defending our intellectual property, opening an additional installation center, and completing two corporate acquisitions.”

The current management team of Roll·Rite will continue to lead the business going forward within Safe Fleet.

Oak Hill Capital Partners acquired SafeFleet in January 2018 from The Sterling Group. Safe Fleet was formed in October 2013 when Sterling acquired both R•O•M Corporation and Specialty Manufacturing from Century Park Capital Partners. Today, Safe Fleet provides a wide range of safety products for fleet vehicles in the emergency services, bus and rail, recreational vehicle, law enforcement, truck and trailer, work truck, industrial and military markets. The company has approximately 1,500 employees and 14 manufacturing locations. Safe Fleet, led by CEO John Knox, is headquartered south of Kansas City in Belton, MO (www.safefleet.net).

Capital Partners makes control investments in small and mid-sized family and management-owned companies that have EBITDA of $4 million to $25 million. Sectors of interest include manufacturing, services, distribution, consumer and food. Capital Partners was founded in 1982 and is headquartered in Norwalk, CT (www.capitalpartners.com).

Argosy Private Equity invests from $5 million to $20 million in lower middle market companies that have revenues of $15 million to $100 million and EBITDA of $3 million to $9 million with EBITDA margins of 10% or greater. Sectors of interest include business services and manufacturing. Argosy Private Equity is a division of Argosy Capital Group, an investment adviser with $1.3 billion of assets under management. The firm was founded in 1990 and is headquartered in the Philadelphia suburb of Wayne, PA (www.argosycapital.com).

Oak Hill Capital Partners invests from $100 million to $300 million of equity in companies active in the consumer, retail & distribution; industrials; media & communications; and services sectors. The firm, which began its investment activities in 1986 as the family office of Robert M. Bass, has offices in New York, Menlo Park and Stamford, CT (www.oakhillcapital.com).

Cleary Gull was the financial adviser to Roll·Rite and its investors on this transaction.

© 2018 Private Equity Professional | December 14, 2018 

Southfield Building Ntiva

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Ntiva, a provider of managed IT services and a portfolio company of Southfield Capital, has acquired the commercial managed services and hosting division of Lore Systems. Southfield Capital acquired Ntiva in December 2016.

Ntiva is a full-service provider of managed IT services for small and medium-sized businesses. The company’s services include onsite support, remote monitoring, cloud services, backup and disaster recovery, and strategic consulting. The company was founded in 2004 and is headquartered in McLean, VA with an additional office Beverly Hills, CA (www.ntiva.com).

Post-closing, Lore Systems will continue as a high-level strategic IT consulting firm. “Partnering with Ntiva was an easy decision,” said Tien Wong, Chairman of Lore Systems, “As we move our focus to growing our strategic consulting business, we wanted to ensure that our commercial clients would be in great hands with Ntiva who, like us, take a strategic, client-centric approach to their service business.” Lore Systems was founded in 1995 and is headquartered in Silver Spring, MD (www.lore.net).

The buy of the Lore Systems’ division strengthens Ntiva’s presence in the Washington DC metro area and increases Ntiva’s client base to over 500 organizations. “We are honored to integrate the Lore clients into our growing portfolio of commercial and non-profit clients,” said Steven Freidkin, CEO of Ntiva. “We’re looking forward to helping them grow their business with the right technology strategy, keeping up with emerging tech trends while ensuring their systems are stable and secure.”

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 and is headquartered in Greenwich, CT (www.southfieldcapital.com).

Lore Systems was advised by Hafezi Capital (www.hafezicapital.com) on this transaction.

© 2018 Private Equity Professional | December 14, 2018

Altus Exits International Imaging Materials

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Altus Capital Partners has sold International Imaging Materials (IIMAK) to ACON Investments.

IIMAK manufactures thermal transfer ribbons, barcode ribbons, direct thermal films, and fluid inks which are used to print on-demand variable information such as bar codes, text and graphics in the automatic identification, packaging, and graphics markets.

IIMAK is also active in medical applications which are provided through iiMED Medical Manufacturing Solutions, a division of IIMAK. iiMED serves companies seeking outsourced manufacturing services for Class I and II medical device consumables such as orthopedic bracing, sterile supplies, compression devices, and patient mobility products.

IIMAK, led by CEO Doug Wagner, is headquartered in Amherst, NY and has more than 1,300 employees worldwide with additional manufacturing, distribution and sales operations in Belgium, Brazil and Mexico (www.iimak.com).

Altus acquired IIMAK in June 2012 from Norwest Mezzanine Partners. IIMAK was also previously owned by Centre Partners, which bought the company in 2000 from Paxar Corporation.

“We have been fortunate to have partnered with Altus Capital Partners in strengthening IIMAK’s growth platform over the last six years,” said Mr. Wagner. “The Altus team brought more than just financial resources to the relationship; they worked collaboratively with our management team on our growth and diversification strategy, demonstrating a strong commitment to our company’s success. We have had a great run with Altus and wish them continued success.”

Altus invests in corporate divestitures, management-led buyouts, and privately-held or family-owned businesses with manufacturing operations based primarily in the Midwest and Eastern regions of the United States. Target companies will have at least $5 million of EBITDA and an enterprise value from $30 million to $100 million. Altus is headquartered in Wilton, CT with an additional office near Chicago in Lincolnshire, IL (www.altuscapitalpartners.com).

“We want to thank the management team of IIMAK under the leadership of Doug Wagner and Chairman Richard Marshall for building the business in a substantial manner during our ownership,” said Russell Greenberg, managing partner of Altus. “IIMAK grew both organically and made five add-on acquisitions during our investment. This has been an important investment for Altus and we wish ACON Investments much future success with IIMAK.”

ACON invests in middle-market companies in the United States and Latin America. The firm was founded in 1996 and has $5.3 billion of capital under management. ACON has offices in Washington, DC (headquarters); Los Angeles; São Paulo, Brazil; Bogotá, Columbia; and Mexico City, Mexico (www.aconinvestments.com).

© 2018 Private Equity Professional | December 13, 2018