Archives for September 17, 2018

NCK and Graycliff Acquire Graybill

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NCK Capital has acquired Graybill Processing, a food by-product recycling company. NCK Capital completed this transaction in partnership with Graycliff Partners which invested both subordinated debt and equity.

Graybill provides collection services, by-product handling, and 24/7 regional logistics support to food waste streams. Through a proprietary process, Graybill converts candy, bakery and other hard-to-handle food waste into a value-added animal feed used by dairy, beef, swine, and poultry farmers. In addition to its core business, the company also provides logistics and hauling, paper and cardboard recycling, and mulch production.

Graybill, led by CEO Matt Petersen and Director of Operations Natalie Petersen, is headquartered in a 50,000 square foot facility in Elizabethtown, PA (www.graybillprocessing.com).

“Graybill is a great example of how ingenuity can be used to not only build a great business but also to drive a very important social mission as well,” said Michael Kornman, Managing Partner at NCK Capital. “Over the last 20 years, this company has found a productive use for an unfathomable amount of organic waste that otherwise would have filled up the precious space we have in landfills.”

NCK Capital makes control investments in lower-middle market companies that have EBITDA of $2 million to $8 million. Sectors of interest include business services, healthcare services, niche manufacturing, specialty distribution, food manufacturing, and for-profit education. The firm is headquartered in Dallas (www.nckcapital.com).

“We are very excited to join the Graybill family,” said Grant Kornman, Managing Partner at NCK Capital. “Matt and Natalie Petersen have built a fantastic operation. The company has an impressive, dedicated team that delivers unrivaled service to their clients and we could not be more elated about our investment.”

“Graybill has carved a unique niche in the animal feed market, providing value to both its suppliers by handling challenging food by-products and waste and its customers by offering a low cost yet nutrient dense livestock feed supplement,” said Duke Punhong, Managing Director, Graycliff Partners. “We look forward to working with our partners at NCK Capital and the team at Graybill to execute the strategic initiatives we have identified and position the company for future growth.”

Graycliff invests from $5 million to $40 million of equity and mezzanine capital in companies with revenues of at least $10 million and EBITDA margins of 10% or higher. Sectors of interest include manufacturing, services and distribution.  Both control and minority investments are considered. The firm was formed in December 2011 by the former investment team of HSBC Capital.  Graycliff is headquartered in New York (www.graycliffpartners.com).

SC&H Capital (www.schgroup.com) was the financial advisor to Graybill on this transaction. “The team at SC&H did a fantastic job. They helped us identify the right capital partner that understood our business and corporate culture,” said Mr. Petersen. “We definitely found the right financial partner to help us grow our business without losing our deep commitment to our clients and suppliers.”

© 2018 Private Equity Professional | September 17, 2018

JMC Buys Phoenix Products

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JMC Capital Partners has acquired Phoenix Products, a manufacturer of rugged industrial lighting products.

Phoenix’s lighting products are used in a range of applications in ports, mines, marine, and other commercial and industrial markets. The company, which traces its roots back to 1892 when it was founded by George Wordingham, has a 68,000 sq. ft. design, manufacturing, and headquarters facility in Milwaukee (www.phoenixlighting.com).

“Phoenix’s LED lighting business presents great opportunities for our future in this industry,” said Scott Fredrick, CEO of Phoenix. “As a 126-year-old manufacturer, we know the value of adaptability and perseverance. JMC’s strategy is a perfect fit for Phoenix and its plan for long-term growth.”

“We are very pleased to partner with Phoenix and its management team,” said Michael D’Amelio, Managing Partner of JMC. “The company has a proud tradition of innovative high-quality products.  With JMC’s support, Phoenix plans on aggressive growth both organically and through add-on acquisitions.”

JMC invests in what it calls the “lower-lower” middle market industrial product and technology sectors. The firm acquires companies with revenues between $5 million and $35 million and then executes a plan to grow the businesses and build profitability through add-on acquisitions and operational improvements. JMC was founded in 1999 by Mr. D’Amelio, and Lawrence Bero and is based in Boston (www.jmccp.com).

© 2018 Private Equity Professional | September 17, 2018

Founders Group Acquires MacDonald Meat

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Armand Agra, a portfolio company of Founders Group of Food Companies in partnership with the Flocchini family, has acquired MacDonald Meat Company.

MacDonald Meat Company (Mac Meat) is a processor and distributor of meat products to the US Pacific Northwest and also exports its products to customers across the Pacific Rim. Mac Meat supplies a range of beef products, including portion control products, branded Certified Angus Beef items, as well as custom grounded products for local burger chains.

Mac Meat is one of the first companies in the industry to possess a Certified Angus Beef export certification for China, and today the company sells products throughout Asia. The company was founded in 1933 and is headquartered in Seattle (www.macmeat.com).

Armand Agra operates meat and seafood businesses under the names Sierra Meat & Seafood, Flocchini Family Provisions, and Durham Ranch.  The company processes and distributes private label and branded meat and seafood products, including a variety of specialty meats (bison, wagyu, venison, elk, and wild boar), which it markets under the “Sierra” and “Durham Ranch” brands. The company, led by CEO Chris Flocchini, is headquartered in Reno, NV (www.sierrameat.com) (www.flocchinisausage.com) (www.durhamranch.com).

“We are pleased to be the new owners of Mac Meat and welcome them into the Armand Agra family. We look forward to building upon their rich history in the Pacific Northwest and continuing to grow and support existing and new customers,” said Mr. Flocchini.

“MacDonald Meat complements our strategy of building a group of decentralized but integrated companies by acquiring durable, long-standing food businesses. It represents a unique opportunity to significantly scale our Armand Agra specialty protein business into the Pacific Northwest,” said Derek Senft, a Partner of Founders who led the transaction.

“We are thrilled about this acquisition and believe that MacDonald Meat is an excellent complement to Armand Agra. We see both companies benefiting from an expanded product line for customers and improved procurement practices,” said Richard Harris, a Partner of Founders and Executive Chairman of Armand Agra.

Founders Group of Food Companies (formerly Tricor Pacific Founders Capital) is a family-owned company that invests its own capital and applies operating know-how, to build a group of food businesses. The firm is based in Vancouver, BC (www.foundersfoodgroup.com).

RSM provided transaction advisory services for this transaction and CIBC provided the debt financing.

© 2018 Private Equity Professional | September 17, 2018

Applied-Cleveland Buys Third Add-On

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Applied-Cleveland, a portfolio company of First Reserve, has acquired the Inspection Business of STS Consulting Services. First Reserve acquired Applied-Cleveland in September 2016 from Nautic Partners.

The Inspection Business of STS provides third-party inspection and integrity maintenance services for midstream oil and gas customers across North America. In addition to its third party inspection services, the business also provides safety and risk management plan services, assistance in developing health, safety and environment (HSE) programs for customers, site-based quality assessment and control, and compliance documentation and manuals for midstream operators. The webpage of the Inspection Business of STS is available HERE.

Applied-Cleveland is a provider of third-party inspection, integrity management, environmental, survey, qualification testing and non-destructive examination (NDE) auditing services for energy infrastructure assets in North America across a variety of energy end markets, including transmission, gathering and distribution. The company, led by Chairman and CEO Randy Byers and President Matt Cheney, is headquartered in Cleveland, OK (www.applied-cleveland.com).

“STS’s core offering of third-party inspection to the midstream industry and its commitment to safety and integrity closely mirrors that of our whole organization. We are excited to continue to grow our company on the heels of two additional acquisitions announced earlier this year, and we are pleased to be able to continue offering experienced, highly qualified inspection services to a wide variety of end markets,” said Mr. Byers.

In February 2018, Applied-Cleveland acquired Encompass Energy Services and Perennial Environmental Services. Encompass provides surveying services as well as drafting, geographic information systems, and right-of-way services primarily for oil & gas pipeline infrastructure across North America. The company is headquartered in The Woodlands, TX (www.encompassservices.com). Perennial is a provider of complex environmental permitting services to oil and gas operators. The company has offices in Houston and Austin (www.perennialenv.com).

STS Consulting Services, the seller of the Inspection Business, provides virtually every service needed to complete oil and gas infrastructure projects including engineering, project management, inspection, and other specialized services. The company was founded in 2007 and is headquartered in Longview, TX (www.ststx.com).

First Reserve invests in energy-related companies including those that are active in the resources, equipment and services, and midstream and downstream infrastructure sectors. Since its founding in 1983, the firm has completed more than 550 transactions (including platform investments and add-on acquisitions). First Reserve has offices in Houston, TX; Stamford, CT; and London, UK (www.firstreserve.com).

© 2018 Private Equity Professional | September 17, 2018