Archives for January 11, 2018

High Road Enters Specialty Chemicals

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High Road Capital Partners has acquired U-C Coatings, a manufacturer and distributor of specialty coatings and sealants used in the North American wood and lumber markets, from Argosy Private Equity and Sidereal Capital Group which together acquired the company in November 2013.

U-C Coatings’ wood protection products and end paints are used to conserve and protect hardwood logs and lumber. The company’s products includes ANCHORSEAL which is used to prevent logs and lumber from prematurely drying and cracking; GEMPAINT lumber tagging paints are used to differentiate lumber bundles; and SEAL-ONCE waterproofers create a protective water barrier within wood, concrete and masonry. The company is headquartered in Buffalo (www.uccoatings.com).

U-C Coatings is led by its President Tom Johel and Executive Vice President of Sales Tim Cutler. They will continue to be active with the company under High Road ownership. “Our superior products have a proven impact on the bottom line for lumber yards, saw mills and log exporters by increasing production yields,” said Mr. Johel. “In addition, our SEAL-ONCE formulations are preferred by craftspeople and manufacturers who demand environmentally friendly products and premium performance. Partnering with High Road gives us the resources to continue to innovate and better serve our customers.”

High Road teamed with chemical industry expert Jeff Leone to evaluate this investment opportunity. Mr. Leone was recently CEO of Rutland Group, a manufacturer of coatings and inks and a portfolio company of The Riverside Company (Riverside sold Rutland to PolyOne Corporation in June 2017), and previously led the coatings division of BASF and the North and South American operations for global chemical supplier Mapei. “U-C Coatings is an ideal platform for building a broader specialty chemicals business focused on coatings and adhesives technologies,” said Mr. Leone. “With this first transaction closed, we will now seek both organic growth and acquisition opportunities for the company.”

“U-C Coatings, with its market leadership in wood protection, is ideally positioned for expansion,” said Jeffrey Goodrich, a Partner at High Road who led this transaction. “Wood protection practices are progressively being adopted both in North America and other wood-producing regions and exports of North American hardwoods are growing. We see an immediate opportunity to expand U-C Coatings’ distribution globally.” Working on this transaction with Mr. Goodrich were Eojin Lee, Vice President; James Karle, Senior Associate; and Marc Rosenberg, Associate.

High Road invests in manufacturing, service, or value-added distribution businesses with revenues of $10 million to $100 million and EBITDAs of $3 million to $10 million.  High Road has completed 47 transactions – 18 platform investments, 23 add-on acquisitions and six exits – since its founding in 2007.  The firm is based in New York (www.highroadcap.com).

Madison Capital Funding, the middle market lending subsidiary of New York Life Insurance Company, provided financing for the transaction (www.mcfllc.com).

© 2018 Private Equity Professional | January 11, 2018

Seacoast Exits Mountain Alarm

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Seacoast Capital has sold its minority equity interest in Fire Protection Service Corp. (dba Mountain Alarm) back to the company. Seacoast first invested in Mountain Alarm in December 2012.

Mountain Alarm designs, installs, services, and monitors security and fire alarm systems for both residential and commercial customers. A third-generation, family-owned and managed company, Mountain Alarm operates in Arizona, Colorado, Idaho, Utah, and Montana, and is the 36th largest alarm company in the US (out of a total of over 10,000), and one of the largest in the region. The company was founded in 1952 and is headquartered in Ogden, UT (www.mountainalarm.com).

“Seacoast was the perfect partner for us,” said Rod Garner, CEO of Mountain Alarm. They were deeply engaged when we needed help and stood out of the way when we didn’t. What else could any company ask for from a minority investor?”

In 2012, Seacoast invested subordinated debt with warrants in Mountain Alarm through its third fund, Seacoast Capital Partners III LP, to assist with the replacement of the company’s senior lender who exited the industry.  During the term of its investment, Seacoast also supported the company’s add-on acquisitions which included the buys of Rocky Mountain Alarm, Armed Alert, Kenco and United Systems.

Over the term of Seacoast’s investment, the company increased revenue 99%; EBITDA 95%; and employees 77%. Recurring Monthly Revenue (RMR), an industry growth metric, increased 141% during Seacoast’s tenure.

“Our investment in Mountain Alarm has been a perfect example of Seacoast’s focus on highly motivated and incented management teams with a significant runway for growth—both organic and via acquisition. The company grew substantially over the course of our investment so they were able to buy out Seacoast’s position entirely with senior debt—as a result, Rod and the rest of the Mountain Alarm team now are back to owning 100% of the business. Seacoast wishes Mountain Alarm the best as they enter a new growth stage,” said Jeff Holland, a Partner at Seacoast.

Seacoast Capital makes non-control subordinated debt and equity investments of $5 million to $30 million in lower middle market companies with revenue of at least $10 million and $2 million or more of EBITDA. Sectors of interest include specialty manufacturing; value-added distribution; health and wellness; logistics and infrastructure services; and commercial and consumer services. Seacoast Capital is currently investing its fourth fund, Seacoast Capital Partners IV LP, with $239 million of capital commitments.  The firm was founded in 1994 and has offices in Boston and San Francisco (www.seacoastcapital.com).

© 2018 Private Equity Professional | January 11, 2018

Blue Point Adds to Fire & Life Safety

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Fire and Life Safety America (FLSA), a portfolio of Blue Point Capital Partners, has acquired Integrated Fire Protection (IFP), a provider of fire and life safety services. The buy of IFP is the first add-on completed by FLSA since being acquired by Blue Point in February 2017.

Integrated Fire Protection’s commercial services include inspection, testing and maintenance of building fire protection systems, and the installation of new equipment. The company’s customers are K-12 schools, colleges, universities, manufacturers, distribution centers, data centers, property management, hotels, restaurants, multi-family housing, transportation hubs and entertainment venues.

IFP was founded in 2002 by John Bennett and is headquartered near Atlanta in Norcross, GA (www.integratedfireprotection.com).

“Integrated Fire Protection is a reputable player in the Georgia market that adds valuable scale and customer relationships to FLSA’s current platform.  In partnership with Blue Point, FLSA has continued its focus on building a leading fire and life safety service platform that can meet its customers’ needs nationwide.  Acquiring IFP bolsters this effort significantly,” said Brian Castleberry, a Principal with Blue Point.

Blue Point acquired FLSA from PNC Riverarch in February 2017 which in turn had acquired the company from KRG Capital in June 2015. FLSA has completed numerous add-on acquisitions under its private equity owners including the buys of Southeast Fire Protection, Affordable Fire Protection, Fire Watch Services, Elite Fire Protection, Texas Southwest Fire Protection, and Universal Sprinkler.

“We have been impressed by the capabilities, reputation and customer base that IFP has built over the last 15 years.  Atlanta is an important market for FLSA, and we are excited to partner with the IFP team to expand our presence there,” said FSLA CEO Tom York.

According to Blue Point, FLSA is one of the nation’s largest fire and life safety services providers and a large percentage of the company’s revenue comes from recurring inspection and monitoring accounts. FLSA services fire alarms, sprinkler systems, fire pumps, pipe/hose systems, fire extinguishers, kitchen hood suppression and emergency and exit signs.  The company has approximately 800 employees and services customers from 18 branch locations in the mid-Atlantic and southeastern United States, as well as through a national partner network. FLSA was founded in 1997 as East Coast Fire Protection and is headquartered in Richmond, VA (www.flsamerica.com).

Blue Point Capital Partners is a lower middle market private equity firm that invests in manufacturing, distribution and service businesses that have from $20 million to $200 million in revenue and EBITDA greater than $5 million. The firm has over $825 million in committed capital and has offices in Cleveland, Charlotte, Seattle, and Shanghai (www.bluepointcapital.com).

© 2018 Private Equity Professional | January 11, 2018

Prospect Acquires Bland Landscaping

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Prospect Partners has acquired Bland Landscaping Company in partnership with the company’s senior management.

Bland Landscaping is a full-service provider of landscape design, installation, enhancement, and maintenance services for commercial properties and high-end residential estates. The company primarily serves offices, hospitals, universities, municipalities, and homeowner associations statewide, including the Triangle, Triad, and metropolitan Charlotte regions. Bland Landscaping was founded in 1976 and is headquartered near Raleigh in Apex, NC (www.blandlandscaping.com).

The company’s in-house team of nearly 300 landscape experts includes professional turfgrass and horticulture managers, landscape designers, chemical technicians, and floriculturists. Second generation owners Kurt Bland, President and CEO, and Matt Bland, CFO and COO, lead the company.

“This is an exciting time for Bland Landscaping as we are actively building upon our company’s pioneering legacy,” said Kurt Bland. “As we pursue our goal of becoming the leading regional provider of the complete life cycle of commercial landscape management services, Prospect Partners offers proven expertise growing niche companies like ours as well as investment capital that will help us continue to be the best at what we do.”

“Bland Landscaping is a rapidly growing niche market leader long known for its superb commercial landscape maintenance and management services, innovation, commitment to the environment, and great customer relationships,” said Erik Maurer, a Principal of Prospect Partners. “We look forward to supporting management as they continue to scale the company and expand its regional presence.”

With the buy of Bland Landscaping closed, Prospect Partners is now seeking add-on acquisitions of well-respected, local providers of commercial landscape maintenance services based in the Southeast and the Mid-Atlantic states.

Prospect Partners focuses exclusively on management-led leveraged recapitalizations and acquisitions of niche market leaders with revenues of less than $75 million.  Areas of interest include niche manufacturing, distribution, and specialty service markets. Since 1998, Prospect Partners has built 50 platforms by investing in more than 150 businesses. The firm has $470 million of capital under management and is based in Chicago (www.prospect-partners.com).

Bland Landscaping is Prospect Partners’ 50th portfolio company overall, and the 14th in the firm’s current fund, Prospect Partners III LP, which closed in 2010 with $200 million of capital.

CCG Advisors, an Atlanta-based mergers and acquisitions firm (www.ccgadv.com), represented Bland Landscaping in this transaction. Freeport Financial Partners (www.freeportfinancial.com) provided financing for the recapitalization.

© 2018 Private Equity Professional | January 11, 2018