Archives for August 7, 2018

Peak Rock Exits Aerosol Valve Maker

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Peak Rock Capital has sold Precision Global, a maker of aerosol valves and actuators, to ONCAP, the middle-market private equity platform of Onex Corporation.

Precision Valve’s products are used in a variety of end markets including personal care, household, food & beverage, industrial and pharmaceutical.  The company has more than 12,000 SKUs and, according to the company, is the largest supplier of aerosol valves in the world selling more than four billion units annually. Precision Valve also sells more than two billion actuators annually.

Precision Valve was founded in 1949 by Robert Abplanalp and two partners to manufacture a new type of aerosol valve that Mr. Abplanalp had invented and patented.  At that time, aerosol technology was not new, but the metal valves on aerosol cans were unreliable, easily corroded and expensive to produce. Mr. Abplanalp used plastic in a model that could be mass produced, lowering the price per valve, to 2 1/2 cents from 15 cents. Mr. Abplanalp is considered by some to be the Henry Ford of the packaging industry. Today, led by CEO Mario Barbero, Precision Valve employs more than 1,500 people across 18 facilities in 15 countries and is headquartered in Greenville, SC (www.precisionglobal.com).

“Precision serves a growing market with high-quality, reliable and innovative products that are critical to its customers and end users,” said Ryan Mashinter, a Managing Director with ONCAP.  “We are excited to partner with Precision’s management team to accelerate the company’s growth both organically and through acquisitions for years to come.”

Peak Rock acquired Precision Valve in May 2015 from MML Capital Partners. “The Peak Rock team has been an invaluable partner over the last three years, supporting Precision’s significant investment in our product capabilities, global leadership organization, and exciting growth initiatives,” said Mr. Barbero. “As we move forward, the company is excited to work with ONCAP to continue to grow our business globally.”

ONCAP is the mid-market private equity platform of Onex Corporation (TSX: ONEX) which makes private equity investments through the Onex Partners and the ONCAP families of funds. Onex has more than $25 billion of assets under management and is based in Toronto with additional offices in New York, New Jersey and London (www.onex.com).

“We are extremely proud of all that Precision and its outstanding management team have achieved over the past few years, with Peak Rock’s backing,” said Robert Strauss, a Managing Director of Peak Rock. “Precision’s investments in its manufacturing assets and team across the globe have resulted in outstanding growth and profit improvement and have positioned the company for long-term success.”

Peak Rock makes debt and equity investments of $20 million to $150 million in middle market companies with revenues from $50 million to $1 billion and enterprise values from $25 million to $500 million. Sectors of interest include business and commercial services; consumer; distribution and logistics; energy and related services; healthcare; industrials; manufacturing, metals, and media. The firm is based in Austin (www.peakrockcapital.com).

“This transaction highlights Peak Rock’s capabilities to support the growth of global middle-market businesses,” said Anthony DiSimone, Chief Executive Officer of Peak Rock. “We look forward to continuing to pursue opportunities in the packaging industry as well as companies with a diverse, multinational footprint that can benefit from Peak Rock’s strategic and operational expertise and collaboration.”

Harris Williams & Co. (www.harriswilliams.com) was the financial advisor to Precision Global and Kirkland & Ellis (www.kirkland.com) provided legal services.

© 2018 Private Equity Professional | August 7, 2018

KPS Sells Attachments Division of IES

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KPS Capital Partners has agreed to sell the attachments division of International Equipment Solutions (IES) to Stanley Black & Decker for $690 million.

The IES attachments division, with approximately $400 million in annual revenue, consists of the Paladin, Genesis and Pengo business units (IES Attachments). KPS is retaining ownership of the cabs division of IES which consists of the Crenlo, Emcor and Siac do Brasil brands (IES Cabs).

KPS formed International Equipment Solutions in September 2011 to acquire Paladin Brands and Crenlo LLC from publicly traded Dover Corporation (NYSE: DOV). Today, IES operates 14 manufacturing facilities and has 2,700 employees. The company is headquartered in Oak Brook, IL, (www.iesholdings.com).

Paladin is a provider of attachment tools for operator-driven equipment used in the construction, landscaping, agriculture, demolition, recycling, forestry and material handling sectors. Company-owned brands include Paladin, Genesis, and Pengo. KPS added to the IES Attachment operations with the July 2012 buy of CWS Industries, a manufacturer of tire manipulators, cable reelers, grapples, and buckets used in the mining, oil & gas, forestry and construction markets; and the March 2015 buy of Kodiak Mfg., a manufacturer of agriculture implements, including rotary cutters, angle and box blades, and tillers.

Crenlo is a provider of steel cabs and roll-over protective structures used in the construction, mining, agriculture and specialty truck markets. The business also provides electronic equipment cabinets under the Emcor brand to customers in the technology, aerospace, government and energy markets. KPS added to the IES Cab operations with the June 2012 buy of Siac do Brasil, a manufacturer of cab enclosures used by original equipment manufacturers in the construction, infrastructure, mining, forestry, and agriculture industries.

“Our investment in IES Attachments demonstrates our ability to identify the best businesses in their respective industries, and work with management to capitalize on each company’s strengths,” said Raquel Palmer, a Partner of KPS. “KPS, in partnership with management, successfully transformed IES Attachments from a non-core division of a large corporation into a thriving, highly profitable and growing standalone company.  Under KPS’ ownership, IES Attachments completed two highly synergistic acquisitions, increased productivity, diversified its end-markets, expanded its product offering and implemented a culture of continuous improvement.  IES Attachments is the latest example of KPS’ investment strategy achieving success across economic cycles, geographies and industries, and we take immense pride in the company’s accomplishments.

KPS Capital Partners is the manager of the KPS Special Situations Funds, a group of private equity funds with approximately $5.4 billion of assets under management that invests in restructurings, turnarounds and other special situations. KPS targets manufacturing and industrial companies that are going through a period of transition or experiencing operating or financial difficulties.  The firm’s portfolio companies have aggregate annual revenues of approximately $6 billion, operate 113 manufacturing plants in 24 countries, and employ over 23,000 people worldwide.  KPS Capital Partners is headquartered in New York (www.kpsfund.com).

Stanley Black & Decker (NYSE: SWK) is a manufacturer of industrial tools and household hardware and provider of security products and locks. The company is headquartered near Hartford in New Britain, CT (www.stanleyblackanddecker.com).

Deutsche Bank was the financial advisor to KPS and IES on this transaction.

© 2018 Private Equity Professional | August 7, 2018

Water Co. Sold to Culligan

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Prospect Partners and Stone Pointe have sold Water Co. Holding (WaterCo) to Culligan International Company.

In November 2011, Prospect and Stone Pointe partnered to acquire eleven of the company-owned dealers of Culligan International. Joining the two private equity firms in this acquisition were Don Fuller, the Vice President of Operational Support for the Culligan-owned dealership division, and John Capone, a sales and marketing executive in the Culligan-owned dealership division. The original dealers acquired by Prospect and Stone Pointe were located in New York, Connecticut, Rhode Island, Ohio, Indiana, and Washington.

“WaterCo has been a strong and exciting growth story for Prospect Partners,” said Lou Kenter, a Founding Principal of Prospect Partners. “WaterCo today is one of the largest and fastest growing dealers in the Culligan network, producing consistent, recurring top-line growth for corporate.”

During the holding period, WaterCo completed more than 20 add-on acquisitions of other Culligan franchises, independent water service dealers, and providers of commercial or industrial water purification services, expanding the company’s geographic footprint, market reach, and bottled water delivery capabilities. WaterCo now operates with territory exclusivity in 36 locations in 13 states and provides a suite of water-related products and services – including water equipment, bottled water, water treatment, and equipment installation, maintenance and repair – to residential and commercial accounts nationwide.

Prospect Partners focuses exclusively on management-led leveraged recapitalizations and acquisitions of niche market leaders with revenues of less than $75 million.  Areas of interest include niche manufacturing, distribution, and specialty service markets. Since 1998, Prospect Partners has built 50 platforms by investing in more than 150 businesses. The firm has $470 million of capital under management and is based in Chicago (www.prospect-partners.com).

“Don and John built a top-notch operating team and did an excellent job integrating, professionalizing, and improving the performance of WaterCo’s 20-plus acquisitions to create a highly respected, team-oriented company that prided itself on growth, best-in-class practices, and customer service,” said Lee Vandermyde, a Principal at Stone Pointe.

Stone Pointe invests in lower middle market companies that have revenues of at least $10 million and EBITDA of at least $1 million. Sectors of interest include niche manufacturing, business and consumer services, and value-added distribution. The firm is based in Naperville, IL (www.stonepointeinvest.com).

“We have deeply valued the strategic guidance both Prospect Partners and Stone Pointe have provided to help steer the company to a successful outcome,” said Mr. Fuller. “We look forward to continuing our relationship and growth under the Culligan brand.”

Culligan International specializes in water softeners, water filtration systems and bottled water for residential and office applications. The company sells its products and services through a network of approximately 800 independently franchised and company-owned dealers in 90 countries. Culligan International, a portfolio company of Clayton, Dubilier & Rice, is headquartered near Chicago in Rosemont, IL (www.culligan.com).

TM Capital (www.tmcapital.com) was the financial advisor to WaterCo on this transaction and Sidley Austin (www.sidley.com) provided legal services.

© 2018 Private Equity Professional | August 7, 2018