Archives for February 8, 2018

Cerberus to Buy Cyanco from Oaktree

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Cerberus Capital Management has agreed to acquire Cyanco from Oaktree Capital which acquired the company in October 2008. 

Cyanco is the largest global producer of sodium cyanide, an important raw material input used in the gold and silver mining industry. Sodium cyanide is used in gold cyanidation, a hydrometallurgical technique for extracting gold from low-grade ore by converting the gold to a water-soluble slurry. It is the most commonly used leaching process for gold extraction. Sodium cyanide briquettes – white in color and resembling charcoal briquettes are primarily used by the mining industry. Cyanco’s briquettes are packaged in hopper cars, ISO containers, one metric ton bag/boxes and one metric ton composite packaging.

Cyanco has two production facilities in Winnemucca, NV with a combined production capacity in excess of 240 million pounds annually; a production facility in Pearland, TX that has production capacity of over 120 million pounds annually; delivery terminals in Wyoming, Quebec, and Mexico; and a laboratory facility in Reno, NV. In addition to its production operations, Cyanco’s Applied Technology division provides consulting services, laboratory support, and cyanide processing technologies to assist its customers in maximizing their metal recoveries using sodium cyanide. Cyanco, led by its CEO Jeffrey Davis, is headquartered south of Houston in Pearland, TX (www.cyanco.com).

“We are pleased to acquire Cyanco, an industry leader with a reputation for safety, reliability, and customer service,” said Dev Kapadia, a Managing Director of Cerberus. “We believe in Cyanco’s proven business model, which has demonstrated positive, sustainable growth due to its long-term customer contracts, strong cash flow, and leading competitive position in the attractive sodium-cyanide market. We look forward to working with the management team at Cyanco to provide expansion capital and operational expertise to accelerate the company’s successful growth strategy.”

Cerberus has approximately $34 billion of capital under management and invests in three strategies: global credit opportunities (which includes non-performing loans, corporate credit & distressed debt, mortgage securities & assets, and direct lending); private equity; and real estate. The firm was founded in 1992 and is headquartered in New York (www.cerberuscapital.com).

“This transaction marks the next logical stage in Cyanco’s evolution,” said Cass Traub, a Managing Director of Oaktree. “After working alongside management for the past nine years, we have every confidence that Cerberus and management will create an even greater Cyanco enterprise.”

Oaktree makes investments in distressed debt, corporate debt (including high yield debt and senior loans), control investing, convertible securities, real estate and publicly-traded equities.  The firm has over 900 employees and $100 billion in assets under management and is headquartered in Los Angeles (www.oaktreecapital.com).

© 2018 Private Equity Professional | February 8, 2018

Svoboda Takes Second Puff on Cigars

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Svoboda Capital Partners has acquired Quality Importers Trading Company (QI), a wholesaler of cigar-related products.

QI designs, imports, and wholesales company-branded and third-party branded cigar humidors, cigar accessories, custom cigar box packaging products, and other cigar-related accessories. The company’s customers include retailers, distributors and manufacturers. QI is headquartered in Weston, FL (www.qualityimporters.com).

Simultaneous with the closing of the QI transaction, QI acquired XIKAR which, according to Svoboda, is the world’s leading cigar accessory brand. XIKAR designs and distributes cigar cutters, lighters, humidification products and other cigar related accessories under the XIKAR brand to thousands of retail locations around the world. The company is headquartered in Kansas City, MO (www.xikar.com).

“This transaction exemplifies Svoboda’s strategy of investing in leading, consumer products and value-added distribution companies with strong management teams,” said Jeff Piper and Rick Harpster, Managing Directors at Svoboda, in a combined statement. “Svoboda is excited to work with the teams from QI and XIKAR to execute on the company’s organic and acquisitive growth objectives. We intend to provide the capital and support to help expand their product offering and enhance their domestic and international go-to-market strategy while preserving their great cultures and further strengthening their market leadership.”

From 2004 to 2007, Svoboda was the owner of Cigars International, a Bath, PA-based catalog and Internet marketer of hand-rolled cigars and cigar accessories to retail and wholesale customers. Svoboda sold the company to Stockholm-based Swedish Match in August 2007.

“QI’s recapitalization by Svoboda and simultaneous acquisition of XIKAR is a transformational event in the cigar accessory category, and creates an industry-leading partnership with enormous growth potential in existing and new markets,” said Michael Giordano, Founder and CEO of QI. “We chose to partner with Svoboda based on their experience in the space and enthusiasm for our business, and we are excited to work together to achieve our growth objectives and take our company to the next level.”

Svoboda invests from $10 million to $20 million in business services, value-added distribution, and consumer products companies that have revenues from $10 million to $100 million and EBITDAs from $3 million to $15 million. The Chicago-based firm was founded in 1998 and has over $350 million of capital under management (www.svoco.com).

© 2018 Private Equity Professional | February 8, 2018

Crestview Buys ATC Drivetrain From Marlin

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Crestview Advisors has acquired ATC Drivetrain from Marlin Equity Partners which acquired the company in August 2012 from GENCO ATC.

ATC Drivetrain (ATC) is a remanufacturer of transmissions, engines, battery packs and related components for light-, medium- and heavy-duty vehicles. The company’s services include process and salvage engineering; warranty root cause analysis and testing; machining for repair and salvage of components; and recycling of non-reclaimable material. ATC Drivetrain serves automotive original equipment manufacturers for both in-warranty and aftermarket products and services. The company’s customers include Ford, Honda, Chrysler, GM, Allison, Subaru, Saab and others. ATC Drivetrain is headquartered in Oklahoma City, OK (www.atcdrivetrain.com).

Joseph Roark will continue to lead ATC as CEO under Crestview ownership. “We are excited about our new partnership with Crestview,” said Mr. Roark. “As an investor with deep experience in backing vehicle suppliers, we believe Crestview will add tremendous value in the next stage of our growth plans and in support of our customers.”

Crestview invests from $100 million to $250 million in companies with enterprise values up to $3 billion. Sectors of specific interest include media, industrials, energy and financial services. The firm will invest in other industries where its relationship network and senior operating capabilities provide an advantage.  Crestview, founded in 2004 and headquartered in New York, manages funds with over $7 billion of aggregate capital commitments (www.crestview.com).

“We are excited to be partnering with ATC’s team as they embark on the next phase of the company’s development,” said Alex Rose, a Partner of Crestview and co-head of the firm’s industrials strategy. “We have been greatly impressed by ATC’s service quality, operational acumen, and deeply collaborative customer relationships. We look forward to working with ATC to capitalize on the numerous opportunities in front of the company.”

Marlin, the seller of ATC, invests in businesses that have revenues of $10 million to $2 billion and current profitability is not a requirement. Sectors of interest include software & technology, services, healthcare, consumer, and industrial. The firm is headquartered in Los Angeles with an additional office in London (www.marlinequity.com).

© 2018 Private Equity Professional | February 8, 2018

Rock Hill Acquires LeBlanc Marine

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Rock Hill Capital Group has acquired LeBlanc Marine, a provider of marine construction, barge & tug services, and material offloading services along the Gulf Coast.

LeBlanc Marine was founded in 2004 by its CEO Ben LeBlanc and began operations by providing barge cleaning and repair services as well as tug support from its primary facility in New Iberia, LA. Mr. LeBlanc partnered with Cody Fortier in 2015 to launch the company’s marine construction division which provides dredging services, levee construction, and coastal restoration.  Also in 2015, LeBlanc Marine began providing offloading services for many of its material vendors along the Gulf Coast and Mississippi River (www.leblancmarine.com).

“We believe Rock Hill’s involvement will provide the strategic insight and operational guidance needed for us to elevate to the next level. We are excited to have found a partner that recognizes the opportunity for growth and thinks about the business like we do,” said Mr. LeBlanc.

“Ben and Cody have built a robust platform to provide marine construction and ancillary services along the Gulf Coast. The LeBlanc team is highly entrepreneurial, we look forward to helping them broaden their geographic footprint and expand into new service offerings,” said Randall Hale, Managing Director of Rock Hill.

Rock Hill invests in small-to-lower middle market companies with enterprise values up to $75 million and EBITDA of $4 million to $10 million that are located in the South and Southeast regions of the US. Sectors of interest include industrial products and services. Rock Hill was founded in 2007 and is based in Houston (www.rockhillcap.com).

LeBlanc Marine represents the third investment by Rock Hill’s third fund which closed in January 2017 with $151 million in capital commitments. The firm’s earlier fund closed in 2013 with $88 million in commitments.

Debt financing for the buy of LeBlanc Marine was provided by BBVA Compass (www.bbvacompass.com).

© 2018 Private Equity Professional | February 8, 2018