Archives for March 20, 2018

Kainos Acquires Bonewerks Culinarte’

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Kainos Capital has acquired Bonewerks Culinarte’, a maker of sauce products for center-of-the-plate entrées and fully prepared sous vide entrées.

Sous vide, which means “under vacuum” in French, refers to the process of food preparation consisting of cooking followed by vacuum-sealing and chilling, then later reheating the food to a very precise temperature in a water bath. Bonewerks’ sous vide products include beef, pork, lamb, duckling, chicken and veal.

By outsourcing sous vide preparation, chefs can eliminate labor, as well as the time-consuming food safety paperwork required to cook sous vide in-house. The company’s products are typically used to prepare dishes for large groups in white tablecloth restaurants, catered events, sporting venues and hotels. Bonewerks was founded in 1998 and is headquartered in Green Bay, WI (www.bonewerksculinarte.com).

“We are excited to partner with the Bonewerks team to capitalize on the sizable growth opportunity in the marketplace,” said Andrew Rosen, Managing Partner of Kainos Capital. “The company has a powerful value proposition for foodservice operators, including consistent quality and the ability to achieve cost savings through reduced kitchen labor, time, real estate and waste in the preparation of essential center-of-the-plate items.  We look forward to working with Bonewerks to increase its product awareness, expand into new channels, and introduce new on-trend products, particularly by extending the company’s sous-vide product line.”

“Bonewerks is uncompromising about product quality, period, from chef-driven recipes to the use of the highest-quality ingredients, traditional open top kettles, hand skimming and unparalleled food safety procedures,” said Tom Sausen, Bonewerks’ CEO. “We are thrilled to partner with Kainos to capitalize on what we have built and to pursue numerous growth initiatives.”

Kainos Capital invests from $50 million to $150 million of equity in manufacturers and marketers of food products, as well as other consumer products in the household and personal care industries, and over-the-counter health and nutritional products sectors. In November 2016, Kainos closed Kainos Capital Partners II LP with total equity commitments of $895 million. The new fund was oversubscribed and closed at its hard cap. The firm’s earlier fund closed in 2013 with $475 million of committed capital. Kainos was founded in January 2012 and is based in Dallas (www.kainoscapital.com).

“Bonewerks is an outstanding company led by a management team with a strong commitment to providing quality products and solutions,” said Bob Sperry, a partner of Kainos Capital. “We believe that Bonewerks and its team can lead a broader consolidation strategy in outsourced sauces, broths and entrees that meet the growing need of foodservice operators for cost-effective solutions to these items.”

The acquisition of Bonewerks is Kainos’ second in the sauces and prepared meals segment of the food industry. In August 2015 it acquired Kettle Cuisine, a manufacturer of over 50 varieties of soups, chilis and chowders prepared in refrigerated and frozen formats that are sold through the foodservice and retail channels to independent restaurants, national restaurant chains and regional and national food retailers. Kettle Cuisine is headquartered near Boston in Lynn, MA (www.kettlecuisine.com).

© 2018 Private Equity Professional | March 20, 2018

New Water Invests in Pegasus Foods

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New Water Capital has made an investment in Pegasus Foods, a contract manufacturer of frozen appetizers and snacks.

Pegasus’ products include frozen dough, appetizers, bakery and dessert items that are sold to both retail and foodservice customers. The company has a 55,000 sq. ft. facility in Los Angeles with organic, gluten-free and kosher capabilities. Pegasus was founded in 1998 by Jim Zaferis and Van Ambatielos (www.pegasusfoodsinc.com).

The investment from New Water provides growth capital to Pegasus to support the company’s recent expansion into a second manufacturing plant, a 135,000-square-foot, state-of-the-art facility located near Dallas in Rockwall, TX. The new facility in Rockwall allows Pegasus to meet both growing demand from new customers and to better serve its existing markets.

“Pegasus Foods’ strengths include its ability to satisfy the quality and safety specifications of the largest and most demanding consumer packaged goods companies and manufacture an extremely diverse product line, while still providing the flexibility to customize packaging, labeling and product selection to meet all of its customers’ needs,” said Jason Neimark, a Partner at New Water Capital. “New Water looks forward to partnering with management as the company scales its manufacturing capacity and takes advantage of significant opportunities that have been presented to Pegasus in the frozen food contract manufacturing industry.”

“We at Pegasus look forward to our partnership with New Water, which will allow us to meet the growing demand for high-quality, high-convenience frozen foods,” said Mr. Zaferis. “As highly regarded partners with expertise in the food manufacturing sector, the fact New Water partnered with us demonstrates their confidence in Pegasus and our strategy for growth.”

The Pegasus investment is New Water Capital’s eighth since the company’s launch in fall 2014 and its second in the food manufacturing space. In April 2017, New Water acquired Denver-based Custom Made Meals, a manufacturer of oven-ready entrees and appetizers sold in more than 6,000 retail grocery locations nationwide (www.custommademeals.com).

New Water invests in lower middle market companies with revenues between $30 and $300 million.  Sectors of interest include consumer products, retail, and industrial manufacturing & services. The firm closed its first private equity fund at the hard cap of $406 million in July 2015. New Water was founded in September 2014 and is based in Boca Raton (www.newwatercap.com).

© 2018 Private Equity Professional | March 20, 2018

Warburg Sells Extant to TransDigm

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Warburg Pincus has agreed to sell Extant Components Group, a maker of aerospace components, to publicly-traded TransDigm Group for $525 million in cash.

Extant Components Group was formed in 2010 by Warburg Pincus in partnership with aerospace executive James Gerwien. The company specializes in the engineering, manufacturing, supply, repair and overhaul of aftermarket components utilized on military and commercial aircraft. Extant focuses on supporting components on platforms at the end of their production lives, but with long-lived fleets that drive aftermarket demand. The company is headquartered in Melbourne, FL and has 170 employees (www.extantcomponentsgroup.com).

Extant’s strategy is to license or acquire mature, non-core electronics and electro-mechanical products from OEM’s. Its current product portfolio consists of over 2,500 proprietary, aftermarket-focused assemblies and sub-assemblies on over 70 active platforms supporting more than 400 military and commercial customers. “We are proud to have grown Extant into a leading, one-of-a-kind provider of aftermarket support and solutions across the aerospace and defense markets,” said Mr. Gerwien. “We have built a diverse portfolio of products and established longstanding, trusted partnerships and customer relationships with the industry’s leading OEMs.”

Extant expects proforma revenues for the fiscal year ending September 2018 to be approximately $85 million. The revenue is derived from a mix of military and commercial applications, with the majority of the revenue coming from the military end market. Extant’s largest platforms include the F-16, AH-64, F-18, F-15, and C-130. Commercial platforms include the King Air series, MD 900/902, B747, B757 and B777. The company also serves business jet platforms such as the Bombardier Learjet family, Cessna Citation family, and various Gulfstream aircraft.

“Extant has established a market-leading position in the aftermarket aerospace components sector, supporting numerous leading OEM licensing partners and serving hundreds of military and commercial customers,” said Dan Zamlong, a Managing Director of Warburg Pincus. “It was a pleasure to partner with Jim Gerwien and his team and we thank them for their exceptional dedication to building the business over the last eight years.  We are confident in Extant’s future growth and we wish the company continued success under TransDigm’s ownership.”

TransDigm Group (NYSE: TDG) is a designer, producer and supplier of a wide range of aircraft components for use on nearly all commercial and military aircraft in service today. The company is headquartered in Cleveland (www.transdigm.com).

“Extant has an unusual and attractive business model, with significant opportunities for growth,” said W. Nicholas Howley, Chairman and CEO of TransDigm. “This unique model fits well with our proprietary and aftermarket-focused value generation strategy. As usual, we anticipate attractive private equity type returns on this acquisition.” TransDigm will finance the acquisition of Extant through a combination of cash on hand and availability under its existing revolving credit facility.

Warburg Pincus has more than $44 billion in assets under management and has raised 16 private equity funds since its founding in 1966. In November 2015, the firm reached a final close of Warburg Pincus Private Equity XII LP at the hard cap of $12 billion. Warburg Pincus is headquartered in New York with offices in Amsterdam, Beijing, Hong Kong, London, Luxembourg, Mumbai, Mauritius, San Francisco, São Paulo, Shanghai and Singapore (www.warburgpincus.com).

Extant was advised by Lazard and Wells Fargo Securities. The transaction is expected to close before the end of June 2018.

© 2018 Private Equity Professional | March 20, 2018

Golden Gate’s GAL Adds On Again

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GAL Manufacturing, a portfolio company of Golden Gate Capital, has acquired the assets of Bore-Max Corporation, a maker of heavy-duty hydraulic passenger and freight elevator components.

Bore-Max’ products include pump units, jacks, slings and platform packages that are sold to customers in California and other western states. The company was founded in 1969 and was acquired in 1988 by Steve Sturm, who led the company as president until 2017 when his son Bret Sturm took over ownership and leadership responsibilities. Bore-Max is headquartered near Los Angeles in El Monte, CA (www.bore-max.com).

“We are excited to become part of the GAL group of companies,” said Bret Sturm, President of Bore-Max. “They are highly regarded in the industry, and we are confident that by joining their team, the business our family has developed over the last 30 years will continue to deliver high-quality products with our customer-first focus, while growing Bore-Max overall.” Bore-Max will continue to be led by Mr. Sturm and will remain headquartered in El Monte.

Golden Gate acquired GAL Manufacturing, a designer, manufacturer, and distributor of elevator components and systems, in June 2017. GAL supplies nearly every electromechanical component used in elevator systems including door operators and associated door equipment, geared and gearless traction machines, universally compatible microprocessor controllers, safety components, signal fixtures, push-button panels, and structural assemblies. The company sells its products to thousands of independent elevator contractors and large elevator OEMs. GAL is headquartered in Bronx, NY, with additional facilities in Quincy, IL, Mississauga, ON, and St. Louis, MO. GAL is comprised of GAL Manufacturing Company, Hollister-Whitney Elevator, GAL Canada Elevator Products and Courion (www.GAL.com) (www.hollisterwhitney.com) (www.GALCanada.com) (www.couriondoors.com).

The buy of Bore-Max is the second add-on completed by GAL in 2018. In January 2018, GAL completed the add-on acquisition of St. Louis-based Comprehensive Manufacturing Services, a provider of door systems for freight elevators. The company’s freight door products are sold under the Courion and Security brand names.

“Bore-Max is a great addition to the GAL family as we continue to expand our product offerings and footprint across North America,” said Mark Boelhouwer, President and CEO of GAL. “Through this acquisition, we will introduce a range of new hydraulic options to our portfolio, and the acquisition of Bore-Max confirms our intent to provide even stronger regional support to our west-coast customers. The Sturms have built an outstanding business, and we look forward to working alongside Bret, Steve and the entire Bore-Max team to grow our combined company together.”

Golden Gate Capital invests in companies across a range of industries and transaction types, including going-privates, corporate divestitures, recapitalizations, and public equity investments. The firm has approximately $15 billion of capital under management and is based in San Francisco (www.goldengatecap.com).

© 2018 Private Equity Professional | March 20, 2018