Archives for August 2018

Tracy Family Acquires TAGG

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Dot Family Holdings, the investment office of the Tracy family, has acquired TAGG Logistics.

TAGG is an e-commerce fulfillment platform that offers nationwide B2B and B2C e-commerce order fulfillment, retail distribution services, contract packaging, reverse logistics and kitting and assembly. Many of TAGG’s customers are active in the healthcare and consumer products sectors.

In addition to its St. Louis headquarters, the company has three additional facilities in Reno, NV; Sparks, NV; and near Philadelphia in Macungie, PA. TAGG was founded in 2006 by Tod Yazdi and Gary Patterson and has 140 employees (www.tagglogistics.com).

“Dot Family Holdings’ business experience and resources complement TAGG,” said Mr. Yazdi, TAGG’s CEO. “Dot has extensive experience in logistics and distribution, and our new partners bring a lot of resources and expertise that will help TAGG continue to grow.” Post-closing, the current leadership team of TAGG will continue to manage the operations of the business with Dot Family Holdings providing oversight and governance.

The Tracy family is the owner and operator of Dot Foods, one of the largest food industry redistributors in the US. The company offers over 112,000 products from 830 food industry manufacturers. Dot consolidates these products and delivers in less-than-truckload quantities to distributors nationwide on a weekly basis. Dot has approximately 4,200 employees and annual revenues in excess of $6 billion. The company has nine distribution centers that serve all 50 states and over 25 countries. Dot is headquartered in Mount Sterling, IL (www.dotfoods.com).

“E-commerce is a rapidly growing industry where we see great opportunity,” said Heath Hunter, Vice President – Corporate Development of Dot Family Holdings.  “TAGG is a successful and growing business and is a great fit within our portfolio of companies. For now, it will be business as usual at TAGG, but there is the potential for collaboration between Dot Foods and TAGG down the road.”

Dot Foods was founded in 1960 by Robert Tracy and was originally named Associated Dairy Products to reflect the nature of the business at the time. In 2016, Dot Foods was listed at number 65 on Forbes’ list of America’s Largest Private Companies with a reported revenue of $6.2 billion in 2015. In 2017, John Tracy moved from CEO to executive chairman of the company, and his brother, Joe Tracy, became CEO. Another brother, Dick Tracy, was appointed president. All three are sons of founder Robert Tracy and his wife, Dorothy.

Dot Family Holdings invests in non-food distribution businesses – to avoid any conflict with Dot Foods’ customers and suppliers – that are based in the US or Canada and have enterprise values between $25 million and $250 million or EBITDA in the range of $5 million to $30 million. The family office is based in St. Louis (www.dotfamilyholdings.com).

© 2018 Private Equity Professional | August 31, 2018

Boyne Acquires AC Business Media

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Boyne Capital has acquired AC Business Media in partnership with the company’s management team. The selling shareholders were the company’s Chairman Anil Narang and CEO Carl Wistreich, and both have maintained a minority interest in the company.

AC Business Media (ACBM) is a business-to-business media and data company with a portfolio of brands in the heavy construction, asphalt, concrete, paving, equipment rental, landscape, manufacturing, logistics, and supply chain sectors. The company’s media properties include, among others, magazines such as Asphalt Contractor, Concrete Contractor, Pavement Maintenance & Reconstruction, OEM Off-Highway, Food Logistics, Supply & Demand Chain Executive, and Green Industry Pros.

All of ACBM’s media properties utilize digital products, trade shows, videos, magazines, webinars, and newsletters. ACBM is headquartered in Fort Atkinson, WI (www.acbusinessmedia.com).

At the closing of the acquisition, Barry Lovette was named the new CEO of ACBM. Over the past two years, Mr. Lovette had been an executive partner at San Francisco-based Salt Creek Capital. Earlier, from 2005 to 2015, he was the president and general manager of Grand View Media, a Birmingham, AL-based publisher of 21 business-to-business magazines and 7 consumer magazines.  The media properties of Grand View have been sold off by its owner EBSCO Industries over the past year.

“AC Business Media is a market leader that is poised for future growth,” said Mr. Lovette. “By partnering with Boyne, AC Business Media will be able to continue investing in its products and capabilities and significantly enhance our ability to provide great value to our customers.”

Boyne makes investments in lower middle market companies that have revenues of less than $100 million and EBITDA of $2 million to $10 million. Sectors of interest include healthcare services, agriculture, consumer products, niche manufacturing, and business & financial services. In July 2017, Boyne closed its debut institutional fund, BCM Fund I LP, with $126 million of capital commitments, surpassing the original target of $100 million. Boyne was founded by Derek McDowell in 2006 and is headquartered in Miami (www.boynecapital.com).

“AC Business Media is a leader in construction media with a portfolio of brands unmatched in the industry,” said Mr. McDowell. “We are pleased to be partnering with Barry Lovette and AC Business Media’s long-tenured management team to grow the company by expanding its already substantial audience and capabilities.”

Westport, CT-based Corporate Solutions (www.csmergers.com), an investment bank specializing in the trade show, consumer show and trade publishing industries, was the financial advisor to AC Business Media.

© 2018 Private Equity Professional | August 31, 2018

Andrew Scharf Joins WILsquare

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WILsquare Capital has added Andrew Scharf to its investment team as a Vice President.

“We are extremely pleased to have Andrew join our growing team,” said Bill Willhite, Managing Partner at WILsquare Capital. “Andrew’s significant transaction experience and meaningful understanding of lower-middle market companies will allow him to quickly contribute to our continued growth as a firm and the success of our portfolio investments.  I am very pleased to welcome Andrew to WILsquare Capital.”

Prior to joining WILsquare, Mr. Scharf spent four years at Atlanta-based investment bank Croft & Bender where he was active in all aspects of transaction sourcing and execution as well as supporting investments in three growth equity funds. He joined Croft & Bender in 2014 as an Analyst and was promoted over his tenure to Senior Analyst, Associate and Vice President. Earlier in his career, Mr. Scharf spent two years with PwC as an Assurance Associate. He has his MBA and undergraduate degrees from Tulane University.

WILsquare invests in businesses that are located in the Midwest and South that are often family-owned and have EBITDA of $3 million to $10 million. Sectors of interest include business services, niche manufacturing, distribution and technology companies. The St. Louis-based firm was co-founded in 2015 by Bill Willhite and Jamie Wilmsen (www.WILsquare.com).

WILsquare is currently investing out of its first fund, WILsquare Capital Partners Fund I LP, which closed in January 2017.

© 2018 Private Equity Professional | August 31, 2018

Kinderhook Builds Race Winning Brands

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Race Winning Brands, a portfolio company of Kinderhook Industries, has acquired Dart Machinery, a maker of high-performance engine blocks, cylinder heads and intake manifolds.

Dart Machinery was founded in 1981 by Richard Maskin and is headquartered in the Detroit suburb of Troy, MI (www.dartheads.com). Mr. Maskin was inducted into the Michigan Motorsports Hall of Fame in 2015 and has earned multiple National Hot Rod Association Pro Stock world championships as an engine builder. Post-closing he will be active with Race Winning Brands as a shareholder and Chairman of Research & Development.

The buy of Dart is the third add-on acquisition for Race Winning Brands. The first add-on was the April 2017 buy of sister companies Diamond Pistons and Trend Performance, manufacturers of high-performance engine components; and the second add-on was the buy of Rekluse, a maker of high-performance clutches for the powersports market, in April 2018.

Race Winning Brands (RWB) is a manufacturer of performance and racing pistons as well as connecting rods, crankshafts, electronics, and other engine related components. The company sells its products to the automotive and powersports performance markets under several brands including JE Pistons, Wiseco Performance Products, K1 Technologies, Diamond Pistons, Trend Performance, Rekluse Motor Sports and ProX Racing Parts. Customers include professional and sportsman racers, engine builders, enthusiasts, street performance racers, OEM crate engine builders, and automotive and powersports wholesale distributors. The company, led by CEO Brian Reese, is headquartered east of Cleveland in Mentor, OH (www.racewinningbrands.com).

“Dart is an iconic brand and a global powerhouse in high-performance blocks, cylinder heads and intake manifolds,” said Mr. Reese. “The Dart team has built a new manufacturing center of excellence in Warren, Michigan to power the brand with leading-edge products. We plan to leverage Richard Maskin’s championship engine building expertise across RWB’s portfolio of race winning products. This strategic acquisition helps drive our mission of leading racers to victory and enthusiasts to enjoyment, while extending RWB adjacently into engine blocks, cylinder heads, and intake manifolds.”

“We are excited about Race Winning Brands adding another premium brand name to its stable of branded products and that Dart has decided to partner with the RWB and Kinderhook family. We look forward to leveraging the RWB platform to further accelerate Dart’s growth,” said Tom Tuttle, Managing Director of Kinderhook Industries.

Race Winning Brands was formed in February 2017 by Kinderhook to acquire Performance Motorsports International from publicly-traded Dover Corporation for total consideration of $150 million. As part of that transaction, Dover agreed to have a minority equity ownership interest in RWB.

Kinderhook makes control investments in companies with transaction values of $25 million to $150 million in which the firm can achieve financial, operational and growth improvements. The firm makes investments in non-core divisions of public companies, management buyouts of entrepreneurial-owned businesses, troubled situations, and existing small capitalization companies lacking institutional support. Sectors of interest include healthcare services, environmental/business services, and automotive/light manufacturing. Kinderhook was founded in 2003 and is based in New York (www.kinderhook.com).

© 2018 Private Equity Professional | August 30, 2018

Avem Buys Future Tech Metals

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Avem Partners has acquired Future Tech Metals, a provider of metal finishing services, from co-owners Tim Gearhardt and Art Medina. True West Capital Partners provided both debt and equity capital in support of this acquisition.

Future Tech operates out of two facilities in Southern California and is a supplier of roughing and finishing services to aerospace forging manufacturers with an emphasis on round forgings that are used on aircraft engines and power generated turbines.

The company has full machining capabilities, from CNC turning to conventional machining, with full secondary capabilities and specializes in working with hard, exotic alloys. Future Tech was founded in 1998 and is headquartered in Riverside, CA (www.futuretechmetals.com).

Avem Partners invests from $10 million to $25 million of equity in lower middle-market aerospace and industrial companies that have revenues from $10 million to $100 million and EBITDA of at least $2 million. The firm was founded in 2016 and is headquartered in Los Angeles (www.avempartners.com). Mike Fourticq, Brian Leibl and Ken Watler – all founding partners – led the transaction for Avem.

True West Capital Partners invests from $5 million to $25 million of junior debt and equity in Western US-based middle-market companies that have revenues of at least $20 million and EBITDA of at least $3 million. The firm has a broad range of industry interests. True West has offices in Portland, San Francisco, Los Angeles and Irvine (www.truewestcp.com). Managing directors Iain Douglas and Brian Hayden, and senior associate Alex Rocca led the transaction for True West.

Studio City, CA-based Backbone Capital Advisors, led by its founder and managing director Britt Terrell, provided debt arrangement services for this transaction (www.backbonecap.com).

© 2018 Private Equity Professional | August 30, 2018

Rotunda Adds to Munch’s

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Munch’s Supply, a portfolio company of Rotunda Capital Partners since April 2015, has acquired Tommark Company from Jon and Scott Larson.

Tommark is a distributor of heating, ventilation and air conditioning (HVAC) equipment and controls that are used in residential and commercial applications. The company carries equipment from Maytag, Kelvinator, Dunkirk, Modine, Tecumseh, Honeywell, Emerson and others. Tommark was founded in 1921 and has seven locations in the state of Michigan with a headquarters near Detroit in Jackson, MI (www.tommark.com).

Munch’s Supply distributes heating and cooling supplies to dealers and contractors and has more than 10,000 SKUs from more than 100 manufacturers. The buy of Tommark will expand Munch’s geographic footprint to 24 locations, including 12 Munch’s Supply branches in Chicago, Northwest Indiana and Michigan along with six O’Connor Company branches in Oklahoma, Kansas, Nebraska, Iowa and Missouri. Munch and Tommark will combine to operate nine branches in Michigan.

Munch’s Supply, founded in 1956, has 450 employees and is headquartered southwest of Chicago in New Lenox, IL (www.munchsupply.com).

“Tommark has a great team in place and we look forward to expanding into new product and customer segments,” said Munch’s CEO Robert Munch. “We are excited to further develop our company’s presence in the state of Michigan through Tommark’s convenient locations. The Larson brothers have done a fantastic job building a solid and successful operation with superior dedication to their family of contractors. We look forward to working with Jon, Scott and the talented Tommark team.”

Rotunda Capital invests in businesses with enterprise values of $15 million to $100 million. Sectors of interest include logistics, value-added distribution, specialty finance, and business services. Since founding in 2009, Rotunda has completed ten platform investments and realized four exits. The firm is headquartered in Bethesda, MD with an office in Evanston, IL (www.rotundacapital.com).

© 2018 Private Equity Professional | August 30, 2018

RoadSafe Acquires Optim Earth

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RoadSafe Traffic Systems, a provider of traffic control and pavement marking services, has acquired Optim Earth.

Optim Earth is the third add-on acquisition for RoadSafe since ORIX Capital Partners acquired the company in February 2016 from Falcon Investment Advisors and Aperion Management. Aperion continues to have a minority equity interest in the company.

Optim Earth provides its customers with on-demand access to 3D subsurface information required to plan and build structures, roads, bridges, tunnels and pipelines. The company was founded by its president Bill Honjas and is headquartered in Reno, NV. Mr. Honjas and other members of the senior management team are remaining with the company under RoadSafe ownership.

“We are a service company that has some of the same customers as RoadSafe, such as state transportation departments, general contractors and utility companies,” said Mr. Honjas. “Optim Earth has products all over the world used for geotechnical investigations. We can provide huge cost savings to end users in the project design phase because they can plan for what is underground and avoid the headaches of project delays encountered when running into something unknown. Optim Earth joining RoadSafe is a win-win situation for everyone, and I’m excited to see the endless possibilities and opportunities that lie ahead.”

RoadSafe Traffic Systems is the largest and only national provider of pavement marking, sign installation, and traffic control services and equipment to heavy highway, building and specialty contractors; state transportation departments; local governments; special events organizations; railroads; and utility companies. RoadSafe operates from 50-plus locations, enabling it to serve projects of any size in over 40 states. The company is led by CEO David Meirick and is headquartered in Chicago (www.roadsafetraffic.com).

“The addition of Optim Earth creates synergies between our two companies, with many of the same customers supported for infrastructure construction, repair and maintenance projects,” said Mr. Meirick. “Optim Earth has earned a solid reputation with contractors and engineers for its expert staff, service and cutting-edge technology. Our goal is to expand that footprint across the country and leverage our customer partnerships nationwide in doing so.”

“With the acquisition of Optim Earth, ORIX Capital Partners continues to realize our goal of seeking strategic add-ons for RoadSafe,” said Terry Suzuki, president and CEO of ORIX Capital Partners. “This will complement the strong organic growth Optim Earth has experienced as a result of the incredible value, reliability and safety of its services.”

In October 2016, RoadSafe acquired Lemoyne, PA-based Protection Services which offers traffic control and pavement marking services to private contractors, federal agencies, state transportation departments, governmental entities and utilities; and in July 2017 it acquired Gibsonia, PA-based Beth’s Barricades, a provider of traffic control services and products (traffic signals, message and arrow boards, speed trailers) to contractors, municipalities and developers throughout Pennsylvania and Maryland.

ORIX Capital Partners invests from $50 million to $150 million of equity capital per transaction in North America based middle-market companies.  The group will invest across a range of industries and special situations. Areas of specific interest include business services, retail, consumer, industrials, telecommunications and technology (www.orixcapitalpartners.com).

Aperion Management, which has been an investor in RoadSafe since its inception in 2007, invests in small to midsize businesses valued between $15 million and $150 million. The firm is based in New York.

© 2018 Private Equity Professional | August 30, 2018

Riverside Closes at Hard Cap

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The Riverside Company has held a final hard cap close of Riverside Micro-Cap Fund V (RMCF V) with capital commitments of $1.2 billion. This fundraise was completed in less than four months and demand exceeded the hard cap by more than 50%.

Riverside’s micro-cap funds (RMCF) were launched in 2005 and have acquired over 55 platform companies and 75 add-ons and have exited more than 30 platforms, including Tate’s Bake Shop (sold to publicly-traded Mondelēz International in June 2018) and Alchemy Systems (sold to publicly-traded Intertek earlier this month). Similar to prior funds, RMCF V invests in North American companies with up to $10 million of EBITDA.  Riverside’s earlier fund, Riverside Micro-Cap Fund IV, held a final close in September 2016 at the hard cap of $650 million.

“This level of investor support is the direct result of the quality of work done by the RMCF team. The RMCF platform investments have grown sales at a CAGR of 23% since the fund’s inception and equally impressive, have organically grown employee headcount by 27% at the portfolio company level,” said Riverside’s Co-CEO Stewart Kohl. “This is a remarkable body of work, and it has been most gratifying to see how well these companies have flourished.”

“We’re delighted to announce the first and final closing of our fifth fund and equally as grateful for the overwhelming response from both new and existing investors,” said RMCF Managing Partner Loren Schlachet. “We’re proud to have built such a strong team over the last fourteen years that is committed to finding, investing and growing businesses.”

“Our approach to the middle market has been consistent for the past 30 years, and RMCF V is a perfect example of that,” said Riverside’s Co-CEO Bèla Szigethy. “Our investments are built on growth, and we strive to continually make companies bigger and better.”

The Riverside Company is a global private equity firm focused on investing in and acquiring growing businesses valued at up to $400 million. The firm is headquartered in New York with 16 additional US and international offices (www.riversidecompany.com).

© 2018 Private Equity Professional | August 28, 2018

Yellow Wood Adds to Freeman Beauty

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Freeman Beauty, a portfolio company of Yellow Wood Partners, has agreed to acquire Paris Presents, a provider of branded cosmetic and bath accessories and a portfolio company of EagleTree Capital.

Paris Presents creates and distributes beauty products and personal care accessories to mass merchants, drug stores, specialty beauty stores, and online retailers. The company’s product portfolio includes Real Techniques, cosmetic sponges; EcoTools, cosmetics and bath accessories; and Body Benefits, bath accessories. Paris Presents, led by CEO Patrick O’Brien, was founded in 1947 and is headquartered north of Chicago in Gurnee, IL (www.parispresents.com).

“For over 70 years Paris Presents has been utilizing consumer insights, innovative product development, and supply chain expertise to develop winning consumer-focused products,” said Mr. O’Brien. “While we have enjoyed considerable growth and success over the past years with EagleTree, partnering with Yellow Wood provides us with access to additional resources and an increased level of industry and operating expertise to build on our success and accelerate our business priorities as an innovative market leader.”

New York-based EagleTree (www.eagletree.com), formerly Wasserstein Partners, acquired Paris Presents in December 2014 from Mason Wells. “We and our co-investors have been delighted to work with Patrick O’Brien and the entire Paris Presents management team over the last several years,” said George Majoros, Co-Managing Partner of EagleTree. “We’re very pleased with the strong growth the company has achieved under our ownership, and are confident Paris will continue its strong international and domestic growth under Yellow Wood’s leadership.”

Yellow Wood acquired Freeman Beauty, a specialty beauty company with a portfolio of brands across the skin care, hair care, foot care and specialty bath and body categories, from Champlain Capital in August 2017. Freeman Beauty’s brand names include Feeling Beautiful (facial masks), Beauty Infusion (facial masks), Feeling Legendary (facial masks for men), Bare Foot (foot care), Psssst! (dry shampoo), and c.Booth (bath and body care). Freeman’s products are sold through the food, mass, drug and specialty retail channels. The company, led by CEO Bill George, was founded in 1976 and is headquartered in Los Angeles (www.freemanbeauty.com).

“This transformational acquisition creates an industry leading beauty platform focused in two of the fastest growing segments in the personal care and beauty segments,” said Dana Schmaltz, Founding Partner of Yellow Wood. “Paris Presents’ superior quality branded beauty accessory products dovetail well with Freeman Beauty’s industry-leading face masks as both companies share the same millennial, Gen Z, and multicultural consumers.  The combined organization will enhance the strong partnerships that both Paris Presents and Freeman have with their retail and e-commerce partners leading to future growth.”

Yellow Wood invests in consumer brands and companies that operate in the mass, drug, food, specialty, value, club and e-commerce channels and have revenues between $30 million and $200 million. In July 2017, the firm completed fundraising for Yellow Wood Capital Partners II LP at an oversubscribed $370 million of committed capital. Yellow Wood was founded in 2011 and is based in Boston (www.yellowwoodpartners.com).

This transaction is expected to close before the end of September 2018.

© 2018 Private Equity Professional | August 28, 2018

HKW Buys Urban Armor Gear

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Hammond, Kennedy, Whitney & Company (HKW) has acquired Urban Armor Gear (UAG), a designer and manufacturer of branded, patented, and protective cases for mobile phones, laptops, and tablets.

UAG is led by its Co-CEOs Samuel Siu and Steve Armstrong and is headquartered in Laguna Niguel, CA (www.urbanarmorgear.com). “On behalf of the UAG management team, we are excited about this partnership with HKW,” said Mr. Siu. “We are positioning ourselves for the next phase of future growth and expansion with this new structure. Partnering with HKW, we have full confidence in the future of UAG.”

“We are very excited to make the investment in UAG and to partner with this management team,” said Luke Phenicie, Lead Transaction Partner at HKW. “The company has grown tremendously since inception and has significant opportunities on the horizon, and we are excited the team chose and trusted HKW as their investment partner.”

Hammond, Kennedy, Whitney & Company invests in companies with revenues between $20 million and $200 million and EBITDAs between $2 million and $20 million. Since 1982, HKW has completed 59 platform management buyouts of small middle-market companies throughout North America as well as 62 add-on acquisitions. The firm was founded in 1903 and is headquartered in Indianapolis with an additional office in New York (www.hkwinc.com).

“UAG fits squarely into HKW’s sweet spot of finding management owners who will retain significant equity ownership going forward.  Additionally, the business generates exceptional free cash flow while also having non-cyclical consumer demand for its products,” said Chris Eline, a Principal at HKW.

“This is an exciting and pivotal moment for UAG,” said Steve Armstrong, Co-CEO at UAG. “Our unique partnership with HKW provides the means to fuel our continued growth while our management team focuses on building the brand, innovating new products, and expanding our global supply chain.”

D.A. Davidson & Co. (www.dadavidson.com) was the financial advisor to UAG.

© 2018 Private Equity Professional | August 28, 2018

Arlington Acquires Black Box Division

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Arlington Capital Partners has completed its acquisition of the Government Solutions division of publicly-traded Black Box for a cash purchase price of $75 million. With the transaction now completed, the division has been renamed Tyto Athene.

Tyto Athene is a systems integrator and managed services provider of communications systems to the US Department of Defense and other civilian agency enterprise operations worldwide. The company is headquartered in Herndon, VA (www.gotyto.com).

Tyto Athene’s products include the Acuity Micro Data Center, a 30-pound ruggedized, carry-on micro data center that can provide immediate communications, applications, and information to deployed personnel anywhere in the world. The product is used in the event of an emergency, caused by natural disaster or act of war, where it can take weeks or even months to set up reliable communications. Tyto Athene will continue to be led by its existing management team, including Jeff Murray, the current Senior Vice President of the Government Solutions division, as the company’s new chief executive officer.

“We have been very impressed with the management team and the differentiated solutions that the company provides to their government clients as well as the company’s ability to develop new technologies such as the Acuity Micro Data Center; we believe that this technology will successfully address a strategic gap at the edge of the information infrastructure of Tyto Athene’s clients,” said Michael Lustbader, a Managing Partner at Arlington. “Additionally, we believe that the company will benefit from a number of secular tailwinds that will allow it to continue its strong performance as the US government modernizes its legacy IT infrastructure.”

Tyto Athene’s name originates from “Tyto”, the scientific name for owl, and “Athena”, the Greek goddess of wisdom and war. In mythology, when soldiers saw Tyto flying above the battlefield, it was a symbol that victory was near.

“We are impressed with the company’s proven past performance on highly-recurring managed services contracts, which provide the business with significant revenue visibility, as well as successful execution on large, multifaceted projects,” said Gordon Auduong, a Vice President of Arlington. “We believe that Arlington can provide the strategic support and necessary investments to accelerate this exciting platform.”

Arlington invests in buyouts and recapitalizations of companies valued from $50 million to $500 million. Sectors of interest include government services and technology; aerospace and defense; healthcare; and business services and software. Arlington is investing out of its fourth fund which closed in July 2016 with $700 million of capital. The firm is based in Chevy Chase, MD (www.arlingtoncap.com).

Black Box (NASDAQ: BBOX) is a provider of IT infrastructure, specialty networking, multimedia, and keyboard/video/mouse switching products. The company was founded in 1976 and is headquartered in Lawrence, PA (www.blackbox.com).

Raymond James & Associates (www.raymondjames.com) was the financial advisor to Black Box on this transaction. With the assistance of Raymond James, Black Box is continuing to explore strategic alternatives to address its liquidity needs which include refinancing, restructuring and the sale of other assets.

© 2018 Private Equity Professional | August 28, 2018

Trivest Acquires GAL Power

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Trivest Partners has acquired GAL Power Systems, a supplier of standby power generators and climate control equipment.

GAL Power provides power generators (6kW to 3500kW), rental generators (6kW to 2000kW), and climate control equipment across Canada and internationally. The company has more than 200 employees and has nine offices across Ontario and Quebec. GAL Power was founded in 1985 by its CEO Guy Lapierre and is headquartered in Ottawa (www.galpower.com).

“I am truly looking forward to the next chapter of GAL’s continuing evolution and am very excited at the prospect of building a strong and productive relationship with Trivest. Together, I am confident that there are no limitations to what we can achieve,” said Mr. Lapierre.

Trivest intends to continue GAL’s growth in Canada, further its expansion into the US and assist in seeking acquisition targets as they expand their market share within North America.

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. 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).

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.

WelchGroup Consulting (www.w-group.com), a corporate finance and mergers & acquisitions advisory firm and a subsidiary of Welch LLP, an Ottawa-based accounting firm, was the financial advisor to GAL Power (www.welchllp.com).

© 2018 Private Equity Professional | August 27, 2018

Pamlico Invests in Airwavz

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Pamlico Capital has made a growth equity investment in Airwavz Solutions, a provider of in-building wireless infrastructure.

Airwavz designs, installs, owns and operates wireless infrastructure systems that are located inside commercial office and hospitality buildings in major metropolitan areas.

The company’s products are used to provide building tenants and their guests with improved cellular service and simultaneously allowing wireless carriers to improve coverage and increase network capacity. Airwavz, led by CEO Brad Davis, is headquartered in Charlotte, NC (www.airwavz.com).

“Amidst the continued explosion in mobile data consumption, in-building wireless coverage and capacity challenges are increasing,” said Mr. Davis. According to the company, approximately 80 percent of mobile data consumption originates or terminates inside buildings and only a small fraction of buildings have adequate wireless infrastructure. Wireless services are a critical factor in tenants’ decisions to lease commercial real estate. Recent studies show that 84 percent of tenants are willing to pay more per square foot for a building with proven cellular connectivity infrastructure and the value of an in-building wireless system is estimated to be around $1.50 per rentable square foot in leasing value.

“Pamlico is pleased to partner with the Airwavz team to accelerate the company’s growth and innovation,” said Walker Simmons, a Partner at Pamlico. “We believe in-building is the next frontier of wireless network expansion, creating a highly attractive market opportunity that Airwavz is uniquely positioned to capture through its innovative solutions, novel business model, and seasoned management team.”

Pamlico invests from $20 million to $100 million in companies with annual revenues of $15 million to $200 million. Sectors of interest include business and technology services, communications and healthcare. Pamlico was founded in 1988 and is based in Charlotte (www.pamlicocapital.com).

“The partnership with Pamlico will allow us to accelerate the execution of our vision to solve these challenges for commercial building owners, tenants, and wireless carriers,” added Mr. Davis. “We are excited to have the support of the Pamlico team and the benefit of their experience in the communications infrastructure sector.”

Pamlico is currently invested in two other communications companies: Hosting, a Denver-based provider of managed cloud hosting services that the firm partnered with in 2008 (www.hosting.com); and Vast Broadband, a Sikeston, MO-based provider of high-speed broadband, video and voice services to residential and commercial customers in South Dakota, Minnesota and Iowa (www.vastbroadband.com). Pamlico invested in Vast Broadband in 2014.

Citizens Capital Markets was the financial advisor to Airwavz on this transaction.

© 2018 Private Equity Professional | August 27, 2018

Kayne Anderson Closes Fund III

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Kayne Anderson Capital Advisors has held a final above-target close of its latest fund, Kayne Senior Credit Fund III LP, with $3 billion of committed capital.

Kayne Anderson’s middle market credit strategy invests in acquisition financings, refinancings, recapitalizations and growth capital to private equity sponsored and family-owned businesses that operate in a wide range of industries. Investment types include senior and junior secured loans, mezzanine debt, and equity co-investments.

The new fund received strong support from existing investors and new domestic and international limited partners. “We greatly appreciate the trust and support from our investors. We continue to execute on a proven lending strategy providing capital to middle market borrowers with sustainable business models and cash flows,” said Doug Goodwillie, Managing Partner of Kayne Middle Market Credit.

The group’s earlier senior fund, Kayne Senior Credit Fund II LP, closed in 2015 with $1.1 billion of committed capital and the first senior fund closed in 2012 with $355 million of capital.

“Since Fund III’s initial close in March 2017, Kayne has committed over $1.4 billion to 40 investments,” said Ken Leonard, Managing Partner of Kayne Anderson Middle Market Credit. “The success of this raise allows us to better service our clients by being able to utilize our balance sheet to underwrite and close a broader spectrum of transactions.” Kayne Anderson’s middle market credit group has offices in Los Angeles, Chicago and New York. Click HERE for the group’s webpage.

“Kayne has built a first-class credit platform managing over $7 billion in credit assets with capabilities across middle market direct lending, CLOs, real estate debt, opportunistic solutions, energy infrastructure and broadly syndicated credit strategies,” said Mike Levitt, CEO of Kayne Anderson.

Kayne Anderson was founded in 1984 and manages $29 billion in total assets for institutional investors, family offices, high net worth and retail clients. The firm has more than 300 employees in eight offices across the US and is headquartered in Los Angeles (www.kaynecapital.com).

© 2018 Private Equity Professional | August 27, 2018

Ogdon Acquires AiA Industries

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Ogdon Ventures has acquired AiA Industries, a skylight manufacturer and fabricator of other plastic products.

AiA’s business is segmented into two divisions. The skylight division manufactures standard and custom structural and domed skylights that are used in residential and commercial applications. The second division fabricates and vacuum forms plastic, including light fixture lenses, display cases and point of purchase displays. AiA was founded in 1977 and is headquartered in Denver (www.aiaindustries.com).

At closing, Ogdon Ventures hired David Wilkins to serve as the company’s new president and CEO. “AiA has built a great brand and has successfully manufactured quality products for their loyal customer base for more than 40 years,” said Mr. Wilkins.  “We look forward to building on this foundation with a sales and marketing playbook supported by an increased digital presence offering customers different ways to buy.”

“We are very excited to have the opportunity to work with the knowledgeable team, the dedicated customer and supplier base, and the addition of David Wilkins,” said Bob Ogdon, Managing Partner of Ogdon Ventures.  “AiA Industries is perfectly aligned with our investment criteria and we look forward to growing the business.”

Ogdon Ventures invests in lower middle market companies with positive EBITDA from $500,000 to $2 million. Sectors of interest include distribution, manufacturing/wholesale and services. Ogdon Ventures is a family run private equity firm and is led by Bob, Dan and Mike Ogdon. The firm is headquartered in Littleton, CO (www.ogdonventures.com).

© 2018 Private Equity Professional | August 27, 2018

IGP to Sell Grakon to Methode

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Publicly-traded Methode Electronics has agreed to acquire Grakon from Industrial Growth Partners for $420 million.

Grakon is a designer and developer of lighting and electronics systems for OEMs in the heavy truck, specialty vehicle, bus, powersports and rail end markets. The company’s top ten commercial vehicle customers have an average tenure of over 19 years, with its newest customer being Tesla.

Grakon has engineering and manufacturing operations near Detroit in Farmington Hills, MI; and in the Netherlands, China, United Kingdom and Canada. Grakon has over 1,200 employees and is headquartered in Seattle (www.grakon.com).

For the trailing 12 months as of July 31, 2018, Grakon’s revenue was approximately $159 million and EBITDA was approximately $41 million. Based on the purchase price of $420 million, this results in an EBITDA valuation multiple of 10.2x.

Industrial Growth Partners (IGP) acquired Grakon in October 2014. During its ownership term, Grakon completed two add-on acquisitions with the May 2016 buy of Toronto-based Hamsar Diversco, a provider of lighting and electronic products used in the bus, off-road/powersports, industrial equipment and heavy truck segments; and the October 2016 buy of Manchester, UK-based BMAC Limited, a provider of LED lighting and electronic control systems for the European rail, bus and tram markets.

San Francisco-based IGP invests in niche manufacturers and industrial services businesses that have histories of profitability and revenues of up to $250 million (www.igpequity.com).

Methode (NYSE: MEI) designs, manufactures and markets electronic and electro-mechanical devices used in a range of industries including automotive, aerospace, appliance, material handling, medical, military, mining, and telecommunications. The company, with revenues of $908 million in FY2018, was founded in 1946 and is headquartered in Chicago (www.methode.com).

Methode will the fund the total consideration of $420 million with a combination of cash on hand and committed debt financing.

Baird was the financial advisor to Grakon on this transaction and Kirkland & Ellis provided legal services.

The transaction is expected to be completed in September 2018.

© 2018 Private Equity Professional | August 23, 2018

CD&R Buys PowerTeam from Kelso

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Clayton, Dubilier & Rice (CD&R) has agreed to acquire PowerTeam Services, a provider of maintenance and construction services to the utility industries, from Kelso & Company.

PowerTeam provides services to maintain, repair, upgrade, and install natural gas and electric distribution and transmission systems. The company’s customers include regulated utilities located in the southeastern and midwestern sections of the US. PowerTeam, headquartered in Cary, NC, has approximately 4,200 employees and 42 locations in 21 states with main operating offices located in Alabama, Georgia, Indiana, North Carolina, Texas, and Wisconsin (www.powerteamservices.com).

“The company has a very promising future,” said John Krenicki, a CD&R Operating Partner and the former Vice Chairman of General Electric and President and CEO of GE Energy. “PowerTeam’s management has built a strong market position and we share their vision for the future, which we believe will create rewarding career opportunities for the company’s more than 4,000 talented employees.” Mr. Krenicki will serve as the Chairman of PowerTeam post-closing.

“PowerTeam’s demonstrated ability to deliver safe, reliable, and high-quality services to its utility customers provides a strong platform to accelerate growth and expand the company’s geographic footprint,” said CD&R Partner Nate Sleeper. “We look forward to supporting the business through its next phase of growth while continuing to provide customers with exceptional service levels.”

“PowerTeam’s outlook is supported by favorable secular tailwinds, which we believe have plenty of runway,” said CD&R Principal Andrew Campelli. “Together with a targeted acquisition strategy, PowerTeam can continue to build its capabilities and reach to even better serve its existing and potential customers.”

CD&R invests in European and US-based businesses.  Since founding in 1978, the firm has invested $26 billion in 81 companies across a range of industries with a total transaction value of approximately $100 billion. CD&R was founded in 1978 and is based in New York and London (www.cdr-inc.com).

Kelso, which originally invested in PowerTeam in December 2012, is one of the oldest and most established firms specializing in private equity investing. Since 1980, Kelso has made investments in over 120 companies in a range of industry sectors. The firm is currently investing out of its ninth fund, Kelso Investment Associates IX, which closed in 2016 with $2.6 billion of capital. Kelso was founded in 1971 and is based in New York (www.kelso.com).

Middle market investment bank Harris Williams (www.harriswilliams.com) is the financial advisor to PowerTeam. The transaction is being led by Managing Directors Drew Spitzer and Matt White, Director Ian Thomas, Vice President Neha Shah, and Associate Will Forston. “Through superior execution, investment in scalable infrastructure and focus on recurring maintenance services, PowerTeam has built a remarkable platform in the utility services sector,” said Mr. Spitzer. “With attractive tailwinds in utility end markets, the company is poised to benefit from long-term investment in both gas and electric infrastructure.”

Kirkland & Ellis (www.kirkland.com) provided legal services to CD&R on this transaction.

© 2018 Private Equity Professional | August 23, 2018

Trinity Hunt Acquires Veracity Research

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Trinity Hunt Partners has acquired Veracity Research Company, a provider of outsourced investigative services.

Veracity Research Company (VRC) specializes in insurance and corporate defense investigations, surveillance, social media checks, hospital canvass, compliance, claims investigations, training and consultations. The company’s customers include insurance carriers, third party administrators, and self-insured corporations. VRC was founded in 1995 by CEO Marcus Doyle and President Lance Foster and is headquartered near Dallas in Denton, TX (www.vrcinvestigations.com).

Trinity Hunt is partnering with Messrs. Doyle and Foster in this transaction and they remain significant shareholders of VRC. “The Trinity Hunt team will serve as a key partner in our continued growth. Their significant resources will enable us to expand our reach and capabilities,” said Mr. Doyle.

Dallas-based Trinity Hunt invests in founder and family-owned companies that have EBITDAs between $5 million and $25 million. Sectors of interest include business-to-business services, niche manufacturing, industrial services, non-cyclical consumer and healthcare services. Trinity Hunt’s fourth fund, Trinity Hunt Partners IV LP, closed in December 2013 with $211 million in capital commitments. The firm is actively raising its fifth fund with a target of $300 million (www.trinityhunt.com).

“We are excited to partner with Marcus, Lance, and the dedicated management team at VRC,” said Pete Stein, Managing Partner at Trinity Hunt. “They have built an exceptional company through strong customer relationships and a commitment to customer service unmatched in the investigative services industry. We intend to build upon these core fundamentals to become the premier investigative services provider nationwide.”

“Trinity Hunt’s proven approach to value creation through partnership was a key factor in our decision to enter this relationship,” said Mr. Foster.

© 2018 Private Equity Professional | August 23, 2018