August 30, 2018
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Archives for August 30, 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

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