May 2, 2018
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Archives for May 2, 2018

High Road Completes Sixth Fund I Sale

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High Road Capital Partners has sold All Integrated Solutions to publicly-traded MSC Industrial Supply for $86 million. The sale of the company marks the sixth exit for the firm’s debut fund, High Road Capital Partners Fund I LP, which closed in 2008 with $150 million of committed capital.

All Integrated Solutions (AIS) – formerly known as Accurate Components & Fasteners – was acquired by High Road in December 2012. The company is a distributor of industrial fasteners and Class C components (low cost and high volume commodity parts), MRO supplies and assembly tools. AIS offers these products along with vendor managed inventory services to original equipment manufacturers.

AIS was founded in 1962 and has operations in Wisconsin, Minnesota, Michigan, Iowa, Indiana and North Dakota. The company has approximately 130 employees and is headquartered south of Milwaukee in Franksville, WI (www.allintegrated.com).

Under High Road’s ownership, AIS’s revenue tripled and the company made three acquisitions: All Tool Sales in 2013; Williams Fastener & Supply in 2014; and Great Lakes Fasteners in 2016. These acquisitions helped grow what was a single-location distributor of fasteners and Class C components at acquisition in 2012 into a regional leader with seven locations in six states.

“High Road made significant investments to support AIS’s growth, including opening new locations, expanding the company’s sales force, adding to the management team, and upgrading its ERP and CRM systems,” said Ben Schnakenberg, Partner, High Road Capital Partners. “We are proud to have partnered with AIS’s outstanding management team, led by Jim Ruetz, to take the company to the next level.”

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 48 transactions – 18 platform investments, 23 add-on acquisitions and seven exits – since its founding in 2007.  High Road is based in New York (www.highroadcap.com).

MSC Industrial Supply (NYSE: MSM), the buyer of AIS, is one of the largest industrial equipment distributors in the world with annual revenues of $2.9 billion. The company was founded in 1941 and is headquartered in Melville, NY (www.mscdirect.com).

BB&T Capital Markets was the financial advisor to AIS.

© 2018 Private Equity Professional | May 2, 2018

AIP to Acquire Vertex Aerospace

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Publicly-traded L3 Technologies has agreed to sell its Vertex Aerospace business to American Industrial Partners for $540 million in cash. The sale of Vertex includes its Crestview Aerospace and TCS business units.

Vertex Aerospace provides aviation logistics services, supply chain management, and maintenance, repair and overhaul services. Crestview Aerospace is a fabricator and assembler of rotary aircraft components and TCS provides aviation-related engineering services and logistics support. The combined business serves the US Department of Defense, including the Air Force, Navy, Army, Marine Corps, Customs Service, and Drug Enforcement Administration.

Vertex Aerospace was founded in 1977 as the product support division of the Beechcraft Company and was purchased by Raytheon in 1980 and renamed Raytheon Aerospace. L3 acquired the business from Raytheon in 2003. Today the company is headquartered north of Jackson in Madison, MS. Click HERE for the Vertex website.

American Industrial Partners makes equity and debt investments in North American-headquartered industrial companies that have revenues from $100 million to $750 million. Transaction values are typically less than $500 million. The firm was founded in 1989 and is headquartered in New York (www.americanindustrial.com).

L3 Technologies (NYSE:LLL) is a provider of a range of communication, electronic and sensor systems used on military, homeland security and commercial platforms. In 2017 the company had revenues of $9.6 billion and approximately 31,000 employees. L3 is headquartered in New York (www.l3t.com).

Moelis & Company was the financial advisor to L3.

Closing of this transaction is expected during the summer of 2018.

© 2018 Private Equity Professional | May 2, 2018

Sterling Adds to Highline Aftermarket

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Highline Aftermarket, a portfolio company of The Sterling Group, has acquired South/Win, a private label and contract manufacturer of automotive fluids.

Highline Aftermarket is a manufacturer and distributor of packaged automotive chemicals, lubricants, and parts, which it sells to independent distributors, quick lube shops, jobbers, wholesalers, and multiple retail channels.  The company was formed by The Sterling Group through its third fund in April 2016 when it acquired DYK Automotive and Auto Aftermarket Holdings Corporation. Highline is headquartered in Memphis, TN (www.highlineaftermarket.com).

South/Win’s products are sold under a range of brands including Rain-X, Windex, Blue Coral, and Krystal Kleer. The company is headquartered in Greensboro, NC (www.southwinltd.com). The addition of South/Win provides Highline with additional automotive fluid manufacturing capabilities.

“Over 30 years, Will and Blaine DuBose have built a fantastic business at South/Win with a reputation for high-quality products and exceptional customer service,” said Darcy Curran, CEO of Highline. “When combined with Highline’s existing manufacturing and coast-to-coast distribution capabilities, South/Win strengthens Highline’s ability to serve customers nationwide.” Will DuBose has agreed to lead Highline’s combined manufacturing business.

“We believe the Highline and South/Win combination will result in additional organic growth opportunities, significant synergies, and broader product and channel reach, including solidified leadership in the windshield wash market,” said Gary Rosenthal, a Partner at The Sterling Group.

Highline has more than doubled in size under Sterling ownership and the buy of South/Win is the third add-on acquisition completed by Highline. The earlier add-ons were Service Champ, a Chalfont, PA-based distributor of branded and private label automotive aftermarket maintenance parts and accessories, in April 2016; and Levin’s, a Sacramento, CA-based distributor of branded and private label automotive aftermarket maintenance parts and accessories, in January 2018.

The Sterling Group invests in manufacturing, industrial services and distribution companies that have enterprise values from $100 million to $750 million.  The firm emphasizes an operational approach in partnership with management teams to grow and improve the companies it acquires.  Sterling was founded in 1982 and is headquartered in Houston (www.sterling-group.com).

© 2018 Private Equity Professional | May 2, 2018

Avista and Dana Acquire Kramer Laboratories

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Avista Capital Partners has partnered with Dana Holdings to acquire Kramer Laboratories, a seller of over-the-counter (OTC) foot care and specialty cough products.

Kramer’s product portfolio includes foot care brands such as The Original Fungi-Nail Toe & Foot, used to treat toe and foot fungus; HC Max, used to treat Athlete’s Foot; and Safetussin, used to relieve coughs caused by the common cold. The company’s products are sold in over 60,000 stores nationwide, including major drug, food and mass merchandiser outlets.

Kramer Laboratories, led by CEO Rick Kornhauser, was founded in 1983 and is headquartered in Coral Gables, FL (www.kramerlabs.com).

“We are excited to welcome Kramer to our healthcare portfolio,” said David Burgstahler, President and Co-Managing Partner of Avista. “The company has a strong foundation, with well-established brands, national distribution and an experienced management team. We look forward to working with the Kramer team and leveraging Avista’s expertise in the healthcare sector to support the company’s future development and expansion.”

Avista, with over $6 billion of capital under management, makes control or influential minority investments in growth-oriented healthcare businesses with a specific interest in pharmaceuticals, medical devices, outsourced pharmaceutical services, distribution, and consumer-driven healthcare. The firm was founded in 2005 and is based in New York (www.avistacap.com).

Robert O’Neil has been named as the new Chairman of the Board of Directors of Kramer. Mr. O’Neil is an experienced pharmaceutical and consumer healthcare executive. From 2002 to 2014 he was the Worldwide Vice President of Business Development for the Johnson & Johnson’s Consumer Group of Companies. He joined Avista as an Operating Executive in 2015. “Kramer has a long track-record of success and is one of most established brands in OTC foot-care,” said Mr. O’Neil. “We appreciate the strong heritage of the Kramer brands and the innovative self-care solutions they provide consumers. We look forward to working with the Kramer team to help the company realize its full growth potential.”

Dana Holdings, Avista’s co-investor on this transaction, is an independent sponsor that makes minority and control investments in companies active in the consumer healthcare sector. The firm was founded in 2004 and is based in Princeton, NJ. “We are delighted to partner with Avista Capital Partners and the entire Kramer organization,” said Joe Falsetti, Dana’s Managing Member. “We are excited about the prospects for the Kramer brands and look forward to working with Avista and the Kramer team to create long-term value.”

© 2018 Private Equity Professional | May 2, 2018

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