Archives for June 1, 2018

Mill Point Closes at Hard Cap

by

Mill Point Capital has closed its inaugural institutional fund, Mill Point Capital Partners LP, at its hard cap of $450 million. The new fund was significantly oversubscribed.

Mill Point makes control-oriented investments of $15 million to $80 million in middle-market companies that have enterprise values of $50 million to $250 million. Sectors of interest include business services and industrial. Mill Point was founded by Managing Partner Michael Duran and is based in New York (www.millpoint.com).

Limited partners in the new fund include endowments, foundations, corporate and state pension plans, family offices, gatekeepers, sovereign wealth funds, insurance companies, and fund of funds. “We are thrilled with the quality of our investor base and grateful for their overwhelming support for what we’ve built at Mill Point,” said Mr. Duran. “In spite of this frothy market, we continue to find market-leading businesses that are often undervalued or overlooked, and seek complex opportunities where we can bring to bear the full impact of our team and operational resources.”

Mill Point already has five portfolio companies as follows: Dejana Industries, a Port Washington, NY-based provider of municipal and facility maintenance services (acquired in December 2017); KKSP Precision Machining, a Glendale Heights, IL-based manufacturer of machined metal components used in the flow control, HVAC, appliance and automotive sectors (November 2017); Avenu Insights & Analytics, a Herndon, VA-based provider of services to cities and counties that aid in the collection of permits, license fees, and sale and use taxes (January 2017); Metal Powder Products, a Westfield, IN-based maker of powdered metal products used in the automotive, lawn & garden and basic industrial sectors (May 2016); and Huntington Solutions, a Jeanette, PA-based maker of foam packaging products used in the appliance, and automotive sectors (September 2016).

Acalyx Advisors (www.acalyx.com) was the exclusive placement advisor to Mill Point. “The Mill Point team, led by partners Michael Duran and Dustin Smith, are seasoned investors in the middle-market as they have created value in all parts of the market cycle. Mill Point’s ability to build a compelling portfolio amidst fundraising speaks to the team’s exceptional capabilities,” said Jennifer Cho Rinehart, CEO of Acalyx.

John Muno, Justin Redeker and Michael Black of Kirkland & Ellis (www.kirkland.com) served as legal counsel to Mill Point.

© 2018 Private Equity Professional | June 1, 2018

SK Capital to Acquire SI Group

by

SK Capital Partners has agreed to acquire SI Group, a manufacturer of specialty chemical additives and intermediates. SI Group is being acquired from the descendants of W. Howard Wright, who founded the company in 1906.

SI Group is a developer and manufacturer of additives and intermediates that are used in a range of end markets including pharmaceuticals, plastics, oil and gas, and tires. The company’s products include adhesives, antioxidants, fuels and lubricants, plastic additives, industrial resins, pharmaceuticals (Ibuprofen and Propofol), surfactants, and engineered plastics.

SI Group operates 20 manufacturing facilities in 10 countries with more than $1 billion in annual sales, and over 2,800 employees worldwide. The company is headquartered in Schenectady, NY (www.siigroup.com).

At the close of the transaction, SK Capital will combine SI Group and Addivant, a supplier of additives including antioxidants, antiozonants, inhibitors, polymer modifiers and UV stabilizers used in the polymers, plastics and rubber sectors. SK Capital formed Addivant in May 2013 to acquire the antioxidant and UV stabilizer business of Chemtura Corporation.

“We are excited that SI Group will be joining the SK Capital portfolio of chemicals and pharmaceuticals businesses,” said Barry Siadat, a co-founder and Managing Director of SK Capital. “SI Group has an excellent fit with the technologies and end markets of several SK Capital businesses, including Addivant in additives, Noramco in the area of pain management pharmaceuticals, and TPC Group in building block chemicals for certain SI Group products. These technology and market connections will enhance and accelerate the continued growth and transformation of SI Group. Additionally, by combining the complementary strengths of SI Group and Addivant, we will be creating a global technology and industry leader in plastic, lubricant, oilfield and rubber additives.”

SK Capital specializes in the specialty materials, chemicals and healthcare sectors and typically invests equity of $100 million to $200 million in each portfolio company. The firm has more than $2.2 billion of assets under management and is based in New York (www.skcapitalpartners.com).

“SK Capital is a firm known for its sound business practices, deep industry experience, and impressive portfolio of companies in the chemicals sector,” said Wallace Graham, Chairman of SI Group. “We are thrilled by the prospect of SI Group joining SK Capital, as it will enhance the company’s performance additives and intermediates business in the plastic, oil and gas, pharmaceutical and rubber sectors. We expect to see great things in the years ahead.”

Committed debt financing has been provided by JPMorgan Chase Bank, HSBC Securities (USA), Deutsche Bank Securities, and Bank of America. HSBC Securities (USA) was the financial advisor to SI Group.

This transaction is expected to close in the second half of 2018.

© 2018 Private Equity Professional | June 1, 2018

MDP Buys Alcami from Ares Capital

by

Madison Dearborn Partners (MDP) has agreed to acquire Alcami Corporation, a contract developer and manufacturer of pharmaceutical drug products, from Ares Capital.

Alcami’s services include development and manufacturing, solid state chemistry, formulation development, analytical development and testing services, drug product manufacturing (oral solid dose and parenteral), packaging and labeling, and distribution. Customers of Alcami include small and mid-size pharmaceutical and biotechnology companies. The company is headquartered in Durham, NC, with nine additional locations including a manufacturing facility in the Netherlands and a sales office in Japan (www.alcaminow.com).

Alcami was originally a portfolio company of American Capital but became part of the Ares’ portfolio when American Capital was acquired by Ares in January 2017. As part of the sale to MDP, Ares is acting as the lead debt financing arranger, and it is maintaining a minority equity position in Alcami.

Alcami’s management team, led by CEO Dr. Stephan Kutzer, will continue to lead the company under MDP ownership. “The entire Alcami team is excited to further enhance and evolve the small to mid-size pharma growth engine. As we enter our next stage of progress as a leading global, clinically-focused and fully-integrated contract development and manufacturing organization (CDMO), we are proud to partner with MDP to expand our talented employee base and further develop our capabilities,” said Dr. Kutzer. “MDP’s extensive experience and strong relationships in the healthcare and life sciences sectors make them an ideal partner.

“We are excited to support Stephan, Alcami’s world-class management team, and its highly committed employee base,” said Tim Sullivan, a Managing Director and Head of MDP’s Health Care team. “They have a demonstrated ability to grow organically, deliver outstanding customer service, and respond to changing industry dynamics. They have recently completed significant capital expenditure programs to add further services and capabilities, and today the company has a highly diversified product portfolio with industry-leading positions in fast-growing market segments.”

Madison Dearborn (MDP) invests in privately held or publicly traded companies in the following sectors: basic industries; business and government software and services; financial and transaction services; health care; and telecom, media and technology services. In August 2016 the firm closed its seventh buyout fund at $4.4 billion. Madison Dearborn was founded in 1992 and is based in Chicago (www.mdcp.com).

“This investment represents an attractive opportunity for us to support and advance an end-to-end business model that we believe uniquely serves the needs of a large and growing customer base,” said Jason Shideler, a Director on MDP’s Health Care team. “We see a wide range of opportunities to expand via organic growth and acquisition within Alcami’s highly fragmented market.”

Ares Capital (NASDAQ: ARCC) provides from $30 million to $500 million of senior secured and mezzanine debt to US-based middle market companies that have from $10 million to $250 million in EBITDA. Sectors of interest include business services, consumer products, distribution, food and beverage, healthcare services, information technology services, and light manufacturing (www.arescapitalcorp.com). Ares Capital is part of Los Angeles-based Ares Management (NYSE: ARES) an investor in private equity, leveraged loans, high-yield bonds, distressed debt and private debt (www.aresmgmt.com).

William Blair & Company (www.williamblair.com) is the financial advisor to Alcami.

This transaction is expected to close in the third quarter of 2018.

© 2018 Private Equity Professional | June 1, 2018

TriTech Switches Sponsors

by

Bain Capital Private Equity has agreed to acquire TriTech Software Systems, a provider of public safety software programs, from Insight Venture Partners.

TriTech’s cloud-based software suite, marketed under the Inform, Zuercher, IMC, Impact, Respond, and CrimeMapping brand names, is active with every facet within the public safety incident-response sector, including 911 notification, computer-aided dispatch, field-based reporting, records management, jail management, analytics and intelligence, patient care reporting, and ambulance billing. The customers of TriTech include the California Highway Patrol, the largest state police agency in the United States, and more than 4,000 other police, fire, and EMS agencies. The company, led by CEO Tony Eales, was founded in 1992 and is headquartered in San Diego (www.tritech.com).

“Bain Capital has a long history of supporting technology and software companies in accelerating their growth,” said Mr. Eales. “Their commitment to our vision underscores the strength of our differentiated products and the potential to further extend the range of public safety solutions we offer to serve our customers.” Earlier investments by Bain in the software sector include Applied Systems, BMC Software, MYOB, Skillsoft, Symantec, Viewpoint Construction Software, Vertafore, and Waystar.

“We are excited to partner with TriTech’s talented management team to drive continued growth, organically and through acquisitions, as we build upon their leading public safety platform and look to bring new solutions to market to meet evolving customer needs,” said Darren Abrahamson, a Managing Director at Bain Capital Private Equity.

Bain Capital Private Equity was founded in 1984 and invests in the consumer and retail; financial and business services; healthcare; industrials; and technology, media and telecommunications sectors. The firm has a team of approximately 220 investment professionals with offices in Boston, Chicago, New York, Palo Alto, San Francisco, Dublin, London, Munich, Melbourne, Mumbai, Hong Kong, Shanghai, Sydney and Tokyo (www.baincapitalprivateequity.com).

“Since our investment in 2014, we have enjoyed partnering with TriTech to drive exceptional growth as the company has become a leader in public safety software,” said Richard Wells, a Managing Director at Insight Venture Partners. “We wish the company and the management team well as they enter this next phase of scaling.”

Insight Venture Partners makes expansion and late stage investments in software, e-Commerce, internet and data-services businesses. Founded in 1995, Insight has raised more than $18 billion and made more than 300 investments. The firm is headquartered in New York (www.insightpartners.com).

William Blair & Company (www.williamblair.com) was the financial advisor to TriTech.

The transaction is expected to close during the second quarter of 2018.

© 2018 Private Equity Professional | June 1, 2018