Archives for September 18, 2018

Brazos Exits BlackHawk Industrial

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Brazos Private Equity Partners has sold BlackHawk Industrial Distribution to Snow Phipps Group.

BlackHawk Industrial Distribution was formed by Brazos in 2010 in partnership with Bill Scheller, the former CEO and President of ORS Nasco, a wholesale distributor of industrial supplies and a portfolio company of Brazos that was sold to United Stationers in 2007.  In September 2010 BlackHawk made is first acquisition with the purchase of Duncan Industrial Solutions (Oklahoma City, OK) and in December 2010 acquired Rogers Industrial Supply (Fort Smith, AR).  Both Duncan and Rogers are distributors of name-brand industrial MRO supplies and equipment.

Over the past 8 years, BlackHawk has grown through a total of 14 add-on acquisitions to become one of the top 30 North American industrial distributors. The company focuses primarily on technical, recurring and consumable segments within industrial distribution, with an emphasis on the cutting tools and abrasives product category. The company has a national footprint that includes locations across North America and offers a portfolio of over one million SKUs. BlackHawk is headquartered near Tulsa in Broken Arrow, OK (www.blackhawkid.com).

“We could not be more pleased with the success of BlackHawk,” said Randall Fojtasek, current Managing Partner of CenterOak Partners and former Co-Founder and Co-CEO of Brazos. CenterOak was launched in September 2014 by Mr. Fojtasek, the former co-founder and co-chief executive officer of Brazos Private Equity Partners. He leads the firm alongside former Brazos senior executives Michael Salim, Lucas Cutler, Jason Sutherland and William Henry. CenterOak closed its first fund, CenterOak Equity Fund I LP, at its hard cap of $420 million in July 2016.

“We have a long track record of investing in specialty distribution businesses across numerous end markets and this transaction represents the successful execution of our investment thesis in the industrial distribution space,” added Mr. Fojtasek. “While completing five platform and 15 add-on investments for CenterOak, our team has also worked tirelessly to build BlackHawk and maximize value for our partners. We are thrilled with the outcome for our investors and for the management team, and we wish them continued success.”

“It has been an incredible run with the team and I have truly enjoyed the partnership, leveraging their expertise in the space to generate value for shareholders,” said Bill Scheller, former BlackHawk CEO and current CenterOak Operating Partner. “BlackHawk has built a leading market position over the last eight years, and we wish the current CEO John Mark and his team success as they focus on the continued growth of the business.”

“We have completed two successful investments and exits alongside Bill Scheller in the industrial distribution space and look forward to working with Bill on a third distribution opportunity at CenterOak Partners,” added Mr. Fojtasek.

CenterOak makes equity investments of $20 million to $90 million in companies with enterprise values of $50 million to $250 million. Sectors of interest include industrial distribution and manufacturing, business services, and consumer. CenterOak is based in Dallas (www.centeroakpartners.com).

Snow Phipps, the buyer of BlackHawk, makes control investments in companies primarily located in North America with enterprise values ranging from $100 million to $500 million that require equity investments ranging from $50 million to $150 million. Sectors of interest include industrials, services, and consumer. The firm was co-founded by Ian Snow and Ogden Phipps in April 2005. Snow Phipps is headquartered in New York (www.snowphipps.com).

Brazos Private Equity Partners, the seller of BlackHawk, is based in Dallas (www.brazospartners.com).

© 2018 Private Equity Professional | September 18, 2018

Palo Duro Partners Up in Specialty Chemicals

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Palo Duro Capital has partnered with Mario Toukan to form CCR Specialty Chemicals in order to acquire Crowley Chemical and its subsidiary Rusmar.

Crowley Chemical manufactures and distributes organic chemicals derived from petroleum derivatives and serves as a custom formulator of specialty aromatic oils bends used by compounders to extend aromatic polyurethanes, epoxy resins, aromatic based rubbers, PVC plastisols and unsaturated polyester resins.

The company was founded in 1920 and is headquartered in New York City with operating facilities in Ohio and Oklahoma (www.crowleychemical.com).

Rusmar is a specialty manufacturer and provider of aqueous foams and application equipment for emissions and odor control in the solid waste, environmental remediation and mining industries.

Rusmar is headquartered in West Chester, PA (www.rusmarinc.com).

“Crowley and Rusmar are recognized leaders in providing high-performance solutions to demanding end markets,” said Palo Duro Capital Partner Matthew Golden. “The management team has done an extraordinary job driving strong operational performance while continuing to extend the company’s reach into new applications.”

“The company has an excellent track record driven by a customer-centric focus and high-quality products, and we look forward to investing additional capital to support both organic growth initiatives and strategic follow-on acquisitions,” said Mr. Toukan. Mario Toukan has spent nearly 20 years as a chemical M&A banker and most recently was global head of chemicals, materials and packaging at KeyBanc Capital Markets.  Prior to KeyBanc, he was with Barclays Capital and Arthur Andersen. In addition, he is an investor and board member of VersaFlex, an industrial coatings business based in Kansas City, KS.

“The management team at CCR is tremendously excited to partner with this team of seasoned specialty chemical investors,” said Bill Callanan, CCR CEO and Chairman. “We have an exceptional opportunity to accelerate growth and make investments in product formulations to provide tailored solutions for our customers. Mario and Matt’s reputation in the chemicals sector and track record for investing in and growing businesses is impressive. This makes them ideal partners for CCR and I am very excited to collaborate with them on this opportunity.”

Palo Duro Capital invests in lower middle-market companies that have $25 million to $150 million of revenue and $5 million to $25 million of EBITDA. Sectors of interest include specialty chemicals, industrial manufactured products, and commercial building products. The firm was founded in November 2017 and is headquartered in Dallas (www.palodurocapital.com).

“The combination of CCR’s best-in-class product portfolio and reputation for unparalleled customer service makes this an exciting platform investment,” added Phil Johnson, CCR President. “We look forward to executing a buy and build strategy to expand the company’s capabilities and accelerate growth.”

© 2018 Private Equity Professional | September 18, 2018

Graham Adds to Aviation Platform

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Desser, a portfolio company of Graham Partners, has acquired AOG Aviation Spares, LLC and Seginus, LLC (together AOG/Seginus).

AOG/Seginus is a provider of component repair and overhaul services to the domestic and international aerospace industry and also produces replacement PMA (Parts Manufacturer Approval) parts that are sold to airline operators, repair stations, and global distributors.

AOG/Seginus is based in the Chicago exurb of Oswego, IL (www.aogrepairs.com) (www.seginusinc.com).

Desser, acquired by Graham Partners in August 2014, is a supplier of aircraft tires and tubes as well as other aviation products to customers in over 100 countries. The company also holds Federal Aviation Administration (FAA) and European Aviation Safety Agency (EASA) approvals for high-speed aircraft tire retreading and wheel and brake services, and produces aviation transparencies – such as aircraft windshields, windscreens, canopies, and windows – for aftermarket applications.

Desser is AS9100 approved and has facilities in Australia, the United Kingdom, and the United States to support commercial airlines, repair stations, and OEMs worldwide through its affiliates Aero Wheel & Brake Service, Cee Bailey’s Aircraft Plastics, Watts Aviation, Rotable Repairs, and now AOG Aviation Spares, and Seginus. Desser is headquartered near Los Angeles in Montebello, CA (www.desser.com).

The buy of AOG/Seginus adds a complementary business to the Desser platform, expanding Desser’s products and services and providing cross-selling opportunities. Additionally, the acquisition will expand Desser’s in-house PMA expertise and build Desser’s line of proprietary products.

“AOG/Seginus has experienced significant growth driven by the company’s impressive product and repair development capabilities and strong customer relationships,” said Chris Lawler, Managing Principal at Graham Partners. “We are excited to add AOG/Seginus’ engineering depth and experience to the combined business, which will be a valuable asset as Desser launches its own proprietary products.”

“Add-on acquisitions have always been a fundamental component of value creation for our companies, and this acquisition is no exception,” said Steven Graham, Senior Managing Principal of Graham Partners. “We look forward to integrating AOG/Seginus and realizing the potential of this combination.”

Graham Partners acquires companies with EBITDA between $5 million and $50 million and will invest in smaller companies as add-on acquisitions to existing portfolio companies. The firm is sponsored by the Graham Group, an industrial and investment concern with interests in plastics, packaging, machinery, building products, and outsourced manufacturing. Graham Partners was founded in 1988 and is headquartered in Philadelphia (www.grahampartners.net).

© 2018 Private Equity Professional | September 18, 2018

Blue Wolf Sharpens Portfolio

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Blue Wolf Capital Partners has merged two of its portfolio companies – Pearl Technologies and TGW Holdings – to create Edge Industrial Technologies.

Edge Industrial Technologies brings together a century-old, British family owned business and an American engineering and manufacturing company and it immediately becomes a leading provider of aftermarket consumables to the food processing, packaging, converting and extrusion industries worldwide.

The company manufactures machine knives, blades, cutters, punches, perforators, sealers, machine adapters and carriages, air cylinders, assemblies, and ball punches. It also provides bubble guides, chilled bubble cages, collapsing frame guides, slats and gusset boards to enhance the performance of blown film extrusion equipment. In addition to creating custom and specialty blades, Edge designs cutting-edge engineering, sharpening and training services for its products.

Edge Industrial will be headquartered in Wilder, KY (located eight miles south of Cincinnati) with manufacturing facilities and operations in Sheffield, UK; Savannah, NY; and Indore, India.

Blue Wolf acquired TGW, a manufacturer of industrial knives, in May 2018. TGW’s knives are made from a variety of materials including carbon steel, stainless steel, powdered metal, tungsten carbide, and ceramics, and are used in wide range of applications in the packaging, processing, printing and converting industries. Most of the company’s knives are available in stock and can be available for same-day shipping. TGW was founded in Sheffield, England in 1908 by Thomas Gilbert Wolstenholme, a descendent of George Wolstenholme who began a small business manufacturing cutlery in 1745. In 1993, the company established TGW International to expand its business to the North American market and in 2011 it opened a manufacturing facility in India. Today, TGW employs 160 people globally and has offices and facilities in Sheffield, UK; Wilder, KY; and Indore, India (www.tgwglobal.com).

Blue Wolf acquired Pearl Technologies, a manufacturer of consumable parts for converting and extrusion capital equipment, in October 2012. The company is based near Syracuse in Savannah, NY (www.pearltechinc.com).

“The combined scale, broad geographic footprint and strong commitment to customer service and quality products means that the combined company is well positioned for long-term growth,” said Michael Ranson, Partner at Blue Wolf.

“Combining TGW and Pearl is about bringing together two industry powerhouses to fuel topline growth. We have reached this critical milestone as a result of the hard work and dedication of generations of employees selling superior products around the world,” said Rick Tattersfield, the recently appointed Chief Executive Officer of Edge Industrial. An operating partner at Blue Wolf, Mr. Tattersfield previously sat on the boards of Pearl and TGW. “The team at Blue Wolf has expertise in helping to scale businesses, and we look forward to working with them to grow Edge Industrial and enable it to reach its full potential.”

Robert Woodbury, Jr. is joining Edge Industrial as the company’s new Chief Financial Officer. He has over thirty years of experience in financial management with engineering-based multi-national companies. Prior to joining Edge Industrial, Mr. Woodbury served as CFO at QD Vision, GT Solar and Brooks Automation.

In addition to Mr. Tattersfield and Mr. Woodbury, other senior executives from both Pearl and TGW will join the senior management team of Edge Industrial: Laurent Cros, previously CEO of Pearl, has been appointed President of Edge Industrial North America Operations; Steve Corbett, previously Operations Director of TGW, has been appointed President of Edge Industrial European Operations; and Tim White, previously Sales and Marketing Manager of TGW International, has been appointed Vice President of Sales & Marketing and General Manager of Edge Industrial, Wilder facility.

Blue Wolf invests in companies in which management of relationships with complex constituencies – such as government and labor – can change organizations and create value. The firm’s investment criteria are minimum revenues of $25 million; minimum transaction size of $20 million; and a minimum investment size of $10 million. Blue Wolf is headquartered in New York (www.blue-wolf.com).

© 2018 Private Equity Professional | September 18, 2018