Archives for July 2018

Pfingsten Closes Second Crane 1 Add-On

by

Crane 1 Services, a portfolio company of Pfingsten Partners since October 2015, has acquired Absolute Crane, a provider of overhead crane services and equipment.

Absolute Crane’s services include inspections, maintenance, repair, design and installation of new and refurbished equipment and parts for overhead cranes. The company, led by its owner and president Mark Lupo, was founded in 1996 and is headquartered in Houston (www.absolutecrane.com). Mr. Lupo will remain with Crane 1 as the division manager of the company’s new Houston location.

Crane 1 provides services and equipment for industrial and commercial users of overhead cranes and hoists. The company’s services include inspections, maintenance, repair, design and installation. Crane 1 was founded in January 2007 and is headquartered near Dayton in Miamisburg, OH (www.crane1services.com).

The buy of Absolute Crane is the second add-on acquisition completed by Pfingsten for Crane 1. In January 2017 the company acquired Crane Service & Inspections (CSI), a provider of overhead crane and below the hook lifting device services and equipment. CSI is based near Dayton in Monroe, OH and has an additional service facility in Memphis.

“The acquisition of Absolute Crane is an integral piece in our strategy to create a national service organization focused on providing operational uptime, regulatory compliance and a better customer experience,” said Scott Finegan, a Managing Director at Pfingsten. “We will continue to focus on strategic add-on acquisitions that bolster Crane 1’s service capabilities and geographic coverage for its customers.”

Pfingsten invests in middle-market manufacturing, distribution and business services companies that have transaction values ranging from $15 million to $100 million, revenues from $20 million to $150 million, and EBITDA between $3 million and $12 million. Since founding in 1989, Pfingsten has acquired 124 such companies through five funds with total commitments of $1.3 billion. The firm is based in Chicago with additional representative offices in India and China (www.pfingsten.com).

“We are thrilled to add Absolute Crane to the Crane 1 family as it represents our first entrance into the rapidly growing Texas market,” said CEO Bob Vevoda. “We plan to leverage the principles of high-quality service, timeliness, and integrity that have made Absolute so successful to date to continue our aggressive expansion throughout the rest of Texas and the Gulf Coast.”

The buy of Absolute Crane closed on July 20, 2018.

© 2018 Private Equity Professional | July 31, 2018

IOP Acquires SignResource

by

Industrial Opportunity Partners (IOP) has formed SRR Holdings to acquire SignResource and to own the equity interests of Royston, an existing portfolio company. SignResource and Royston will collaborate but remain independently operated businesses under SRR Holdings.

SignResource is a designer and manufacturer of exterior and interior signage for retail fuel/convenience store chains, retail and hospitality, and quick-serve restaurants. The company also provides its customers with installation and maintenance services. SignResource manufactures its products in two facilities near Los Angeles in Maywood, CA (headquarters) and Bell Gardens, CA. The company, led by CEO Scott Van Ness, also has a project management and customer service center in Knoxville, TN (www.signresource.com).

“The SignResource management team is looking forward to our partnership with IOP and with Royston,” said Mr. Van Ness. “We believe that together with Royston, and with IOP’s operations‐focused approach, we will be in a great position to continue to grow and serve our customers.”

IOP acquired Royston, a designer, manufacturer and installer of check out and merchandising fixtures and equipment, from Stephens Capital Partners in March 2018. The company’s products are used by convenience stores, grocery stores and other mass merchandisers and include checkout stands, customer service centers, prep and beverage counters, modular shelving systems, coffee and beverage islands, beverage tower systems, counters, kiosks, and fuel-island valets.

Additionally, through its field operations business, Royston provides customers with project management, site inspection and surveys, and installation services for program rollouts and store remodels. The company, led by CEO Mark Kenline, is headquartered in Jasper, GA (60 miles north of Atlanta) with two additional manufacturing facilities in Royston and Atlanta, GA (www.roystonllc.com).

Jim Todd, an IOP Operating Principal, has assumed the position of Chairman of SRR Holdings, overseeing both SignResource and Royston. “We are excited to partner with Scott and the rest of the SignResource team,” said Mr. Todd. “We are also excited about the prospects of each of SignResource and Royston, and together we believe they will be able to offer customers a much broader product line with enhanced capabilities.”

IOP focuses on acquiring middle-market manufacturing and value-added distribution businesses, typically with revenues between $30 million and $400 million. The firm targets businesses with strong product, customer, and market positions and provides both management and operational resources to support sales growth and operational improvements. IOP is headquartered in the Chicago suburb of Evanston (www.iopfund.com).

SRR Holdings is the second platform investment for IOP’s third fund, Industrial Opportunity Partners III LP, which closed in July 2017 at its hard cap of $450 million.

Debt financing for the buy of SignResource was provided by an expansion of Royston’s existing capital structure with a bank group led by Comerica Bank and with subordinated debt financing provided by Norwest Mezzanine Partners.

© 2018 Private Equity Professional | July 31, 2018

Lovell Minnick to Buy National Auto Care

by

Lovell Minnick Partners has agreed to acquire National Auto Care Corporation from Trivest Partners.

National Auto Care (NAC) is a nationwide provider of automotive protection products including vehicle service contracts, guaranteed asset protection, limited warranty, tire, wheel and other ancillary protection products. The company’s products are sold through more than 2,300 independent agents including automobile dealers, credit unions, financial services companies, and recreational vehicle dealers. NAC, led by CEO Tony Wanderon, was founded in 1984 and is headquartered in Jacksonville (www.nationalautocare.com).

Trivest acquired NAC through its $325 million fourth fund in January 2013. “Since our investment nearly six years ago, NAC has grown to be one of the premier providers in the finance and insurance space, and we are extremely proud of our partnership and investment in such an exciting company. We are confident that NAC and the management team are well positioned for continued growth and success through their partnership with Lovell Minnick,” said Troy Templeton, a Managing Partner at Trivest.

Trivest makes control and non-control investments in founder or family-owned businesses in the United States and Canada that have revenues of at least $25 million and cash flows of at least $5 million. Sectors of interest include manufacturing, distribution, business and healthcare services, and consumer industries. Trivest held a first and final closing of Trivest Fund VI LP with $600 million of capital commitments in September 2017. Fund VI was Trivest’s twelfth overall fund, seventh institutional fund and fifth fund focused on founder/family-owned investments. The firm was founded in 1981 and has completed more than 250 transactions totaling over $6 billion in value. Trivest is headquartered in Miami (www.trivest.com).

“NAC is the premier national market leader in developing innovative products that help protect consumers from a wide range of risks that can arise with vehicle or power sport ownership,” said Trevor Rich, a Partner at Lovell Minnick. “We look forward to partnering with Tony Wanderon, who is an accomplished veteran and innovator in the automotive protection industry, and his experienced team at NAC, as our investment positions the company to aggressively pursue acquisitions that complement its strong growth trajectory.”

Lovell Minnick provides buyout and growth capital to middle-market financial services companies, typically making equity commitments of between $20 million and $100 million. Areas of specific interest include asset management, financial product distribution, insurance and securities brokerage, specialty finance, and related technology and business services. Lovell Minnick is the successor to the private equity affiliate of Putnam Lovell Securities which was established in 1999 by Jeffrey Lovell and James Minnick. The firm has offices in Philadelphia, New York and Los Angeles (www.lovellminnick.com).

Madison Capital Funding and NewStar Financial are providing debt financing for this acquisition which is expected to close in the third quarter of 2018.

Houlihan Lokey (www.HL.com) was the financial advisor to NAC.

© 2018 Private Equity Professional | July 31, 2018

Metalmark Adds to Premier Research

by

Premier Research, a provider of clinical development services, has acquired Regulatory Professionals. Premier Research was acquired by Metalmark Capital in November 2016.

Regulatory Professionals (RPI) provides strategic advice, regulatory planning, and submission services that assists biotechnology, pharmaceutical, and medical device companies to advance the development and registration of their drug and medical device products in worldwide markets. RPI’s services cover a range of therapeutic areas including oncology, neurology, cardiovascular, and dermatology. The company has 40 employees and was founded in 1995 with a headquarters near San Jose in Newark, CA (www.regprofessional.com).

Premier Research provides clinical development, analytic, and support services to pharmaceutical, biotech, and medical device customers worldwide. Sectors of specialization include analgesia, dermatology, medical devices, neuroscience, oncology, pediatrics, and rare disease. Premier Research is headquartered in Durham, NC and has operations in 84 countries and 1,250 employees (www.premier-research.com).

Premier Research will use the acquisition of RPI to form a new Regulatory Services Division which will be led by Donna Kato, RPI’s Founder and CEO. “Our ability to create value as a trusted partner and integral member of our clients’ scientific, regulatory, and development teams has earned us a reputation as a strategic adviser supporting regulatory activities in the United States, Canada, European Union, and Japan,” said Ms. Kato. “Combining with Premier Research will give us a much larger footprint and access to resources that complement our regulatory service offerings, such as data management and biostatistics, clinical development, safety management, DMPK, and other disciplines important to our clients.” (Editor’s note: DMPK refers to drug metabolism and pharmacokinetics).

“Taking a new drug or medical device from concept to market requires a thoughtful regulatory strategy, expertly prepared documents for agency submission, and submission management in accordance with increasingly stringent requirements,” said Ludo Reynders, CEO of Premier Research. “Most of our clients are specialty pharma and biotech companies that need ready access to development expertise. Joining with RPI will expand our ability to help these pioneers realize the potential of their novel therapies and life-changing innovations. Through our growth in this segment, we have become the CRO that is really built for biotech.”

Metalmark Capital was established by the principals of Morgan Stanley Capital Partners (MSCP) to manage the Metalmark Capital and MSCP funds. Since 1986, the Metalmark Capital and MSCP funds have invested $7 billion of equity capital in over 100 companies. Sectors of interest include healthcare, agribusiness, growth industrials, and natural resources. Metalmark Capital manages funds with $3.7 billion in aggregate capital commitments. The firm is based in New York (www.metalmarkcapital.com).

William Blair & Company (www.williamblair.com) was the financial adviser to Premier Research and Edgemont Capital Partners (www.edgemontcapital.com) was the financial advisor to RPI.

© 2018 Private Equity Professional | July 31, 2018

Ex-Wafra Pros Form Granite Bridge

by

The former management team of Wafra Partners, the direct equity division of Wafra, has spun out to form Granite Bridge Partners.

Forming and joining Granite Bridge are Peter Petrillo, Jeff Gerson, Mike Goodman, Eric Norfleet, Ryan Wierck and Sam Green. Mr. Petrillo leads the firm as Managing Partner.

With backing from Spring Bridge Partners and a syndicate of other limited partners, Granite Bridge has acquired, through a secondary transaction, a majority interest in Wafra’s direct equity portfolio. “We are very excited to have been able to partner with Spring Bridge and the rest of syndicate to complete this transaction and look forward to working with them to generate a successful outcome for all,” said Mr. Petrillo. “In addition, we are grateful to Wafra for more than 20 years of support and partnership and thrilled that they have agreed to remain a participant in our new venture.”

The portfolio of companies acquired by Granite Bridge from Wafra are as follows:

  • The Wellness Network, acquired by Wafra in January 2016, is a provider of patient engagement services to hospitals, physicians, payers and employers (www.thewellnessnetwork.net);
  • Winning Streak Sports, acquired by Wafra in October 2016, is a supplier of nostalgia-themed sports banners and pennants sold under licensing agreements with professional sports leagues and universities (www.wssdecor.com).
  • The InterMed Group, acquired by Wafra in December 2015, is a provider of outsourced medical equipment maintenance, management and other services (www.intermed1.com);
  • Integrated Cable Assembly, acquired by Wafra in May 2014, is a manufacturer of wire harnesses, cable assemblies, and electromechanical assemblies (www.icahholdings.com);
  • Smiles Services, acquired by Wafra in October 2013, is a provider of dental practice management services to dental offices located in the Pacific Northwest (www.welovesmiles.com);
  • Phelps Industries, acquired by Wafra in January 2013, is a manufacturer and marketer of branded and private label dog and cat treats (www.phelpsindustriesllc.com);
  • All Island Media (www.allislandmedia.com), acquired by Wafra in November 2010, publishes and distributes Pennysaver News, Town Crier, and other niche shopping publications in Nassau and Suffolk counties in New York;
  • Custom Wood Products, acquired by Wafra in July 2006, is a manufacturer of cabinetry for kitchens and bathrooms primarily for the remodeling market (www.cwpcabinetry.com); and
  • American Higher Education Development, acquired by Wafra in August 2004, is a for-profit, post-secondary education provider (www.ahed.com).

Granite Bridge invests from $10 million to $30 million per transaction in companies that have enterprise values between $10 million and $100 million. Typical targets will have revenues of at least $10 million and EBITDA of at least $2 million. Sectors of interest include consumer products and services, business services and niche manufacturing. Granite Bridge is headquartered in New York (www.granitebridgepartners.com).

Spring Bridge Partners, founded by Sebastien Burdel and Luca Salvato, is a specialty investor in private equity portfolios and general partnerships. The firm is based in New York (www.springbridgepartners.com).

New York-based Wafra is a privately held investment management firm with more than $20 billion of assets under management (www.wafra.com).

© 2018 Private Equity Professional | July 30, 2018

Carlyle Raises Its Largest Fund

by

The Carlyle Group has held a final close of its newest US buyout fund, Carlyle Partners VII, at $18.5 billion. More than 320 investors from 57 countries committed capital to the new fund, which exceeded its $15 billion target and closed at its hard cap.

Carlyle’s US buyout team is co-led by managing directors Peter Clare and Sandra Horbach. “This fundraise, the largest in Carlyle history, is a testament to the creativity, hard work and performance of the US buyout team,” said Mr. Clare and Ms. Horbach in a released statement. “We are grateful for the confidence and support of our fund investors, many of whom are repeat investors.” Carlyle’s 74-person US buyout team is part of Carlyle’s corporate private equity segment which has assets under management of $81 billion and 297 investment professionals.

“For 29 years, the US buyout team has demonstrated its ability to create value for our investors,” said Kewsong Lee, Carlyle’s Co-Chief Executive Officer. “Sandra and Pete’s track record is exceptional.  Their superb leadership coupled with the team’s deep domain expertise enables us to create the edge needed to maximize returns in today’s highly competitive markets.”

The Carlyle Group (NASDAQ: CG) invests in buyouts, growth capital, real estate and leveraged finance in Africa, Asia, Australia, Europe, the Middle East, North America and South America. Carlyle has expertise in various industries, including aerospace, defense & government services, consumer & retail, energy, financial services, healthcare, industrial, real estate, technology & business services, telecommunications & media and transportation.  The firm employs approximately 1,575 people in 31 offices across six continents and is based in Washington, DC (www.carlyle.com).

Carlyle’s previous US buyout fund, Carlyle Partners VI, closed in November 2013 with $13 billion of capital. Portfolio companies in Fund VI include Signode Industrial Group, formerly part of Illinois Tool Works; Ortho-Clinical Diagnostics, formerly part of Johnson & Johnson; Dealogic; Vogue International; Atotech, formerly part of Total; and Novetta Solutions.

© 2018 Private Equity Professional | July 30, 2018