Archives for October 10, 2018

Highlander Buys SFERRA from LLCP

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Highlander Partners has acquired SFERRA Fine Linens, a luxury linens and home lifestyle company, from Levine Leichtman Capital Partners (LLCP) which invested in the company in August 2013.

SFERRA’s product portfolio includes more than ten different categories, including bed, bath, table, and decorative accessories.  The company sells its products through a variety of channels including home specialty boutiques, luxury department stores (Bloomingdale’s, Neiman Marcus and Bergdorf Goodman), select hospitality properties, and online through its website. The company was founded in 1891 by Gennaro Sferra and today is headquartered in Edison, NJ (www.SFERRA.com).

“The SFERRA investment has been very successful for LLCP, our partners and for the company’s management team,” said Lauren Leichtman, CEO of LLCP. “We are proud to have enhanced the value of SFERRA through various avenues including introducing new products, adding new customers and elevating SFERRA’s quality and service. We are very excited for the future of SFERRA and we wish the management team continued success.”

LLCP, which invests in middle market companies located in the United States and Europe, is based in Beverly Hills with offices in Chicago, Dallas, New York, London and The Hague (www.llcp.com).

Under Highlander ownership, Michelle Klein will continue in her role as CEO and President of the company. Mark Blanchat, a Partner at Highlander, has been named as the Chairman of SFERRA.

“This acquisition reiterates Highlander’s focus on investing in high-quality, branded consumer products companies and represents an opportunity for us to acquire an established luxury brand with a loyal consumer following due to its highly differentiated product offerings and superior quality,” said Mr. Blanchat. “Luxury bedding has proven to be a stable segment of the market and is expected to continue growing over the foreseeable future as consumers correlate a better sleep experience to achieving improved health. There are tremendous growth opportunities for this business driven by strategic brand and product extensions designed to further increase awareness, along with continued growth in new and existing channels.  We believe Michelle and her team are the ideal partners to take SFERRA to the next level.”

“We are very excited to be partnering with SFERRA management in this transaction,” said Jeff Hull, President and Managing Partner of Highlander. “All of us believe SFERRA has the potential to become the leading luxury linens provider globally, reaching into adjacent untapped home-goods categories.  We are looking forward to implementing a selective “buy-and-build” investment approach and finding complementary M&A opportunities for this business in the luxury goods category.”

Highlander makes investments in middle market businesses in targeted industries in which the principals of the firm have significant operating and investing experience. Sectors of interest include manufacturing, consumer products, industrial goods, automotive accessories, packaging, food and beverage, and specialty chemicals. The firm has over $2 billion in assets under management and is based in Dallas (www.highlander-partners.com).

“We are excited about the new partnership with Highlander and will benefit from their resources and expertise in brand building,” said Ms. Klein. “SFERRA currently has outstanding consumer awareness, and we are well positioned to continue our historical success. We’re looking forward to partnering with Highlander to help accelerate growth across the US and internationally.  Our team at SFERRA is eager to get started on our robust pipeline of new opportunities.”

Lazard Middle Market was the financial advisor to SFERRA. Senior debt was provided by Regions Bank and Fifth Third Bank and mezzanine debt was provided by Norwest Mezzanine Partners.

© 2018 Private Equity Professional | October 10, 2018

IOP Exits Alexandria Moulding

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Industrial Opportunity Partners has sold Alexandria Moulding to U.S. Lumber Group (USL), a portfolio company of Madison Dearborn since March 2017.

IOP acquired Alexandria Moulding, a manufacturer and distributor of wood mouldings and millwork products for the Canadian and Northern US residential housing markets, in April 2016. The company sells directly to retailers as well as to wholesale building product distributors and industrial customers. Alexandria has six manufacturing facilities and four distribution centers and is headquartered near Montreal in Alexandria, ON (www.alexmo.com).

The sale of Alexandria Moulding is IOP’s fourth investment realization from its $275 million second fund, Industrial Opportunity Partners II LP, which closed in April 2012 with $275 million of committed capital.

IOP Operating Principal David Mackin served as Alexandria Moulding’s Chairman of the Board during IOP’s investment period. “I believe Alexandria Moulding’s leadership team and its employee base have worked hard to bring value to its customers through excellent customer service, a focus on 100% fill rates and a wide selection of quality products, and I believe the company is well positioned for its future under U.S. Lumber ownership,” said Mr. Mackin.

U.S. Lumber is a distributor of building products to individuals, builders, and contractors through local lumber yards and building supply dealers. The company is headquartered in Duluth, GA (www.uslumber.com).

“We are excited for the combination of Alexandria Moulding with U.S. Lumber, and we believe that both businesses will benefit from the significant expansion in scale, product line and depth of customer and supplier relationships,” said Kyle Hood, a Director of IOP. “We would like to thank the outstanding management team of the company led by President Andre Cholette and wish them continued success in the future.”

IOP focuses on acquiring middle-market manufacturing and value-added distribution businesses, typically with revenues between $30 million and $400 million. The firm targets businesses with strong product, customer, and market positions and provides both management and operational resources to support sales growth and operational improvements. IOP is headquartered in the Chicago suburb of Evanston (www.iopfund.com).

© 2018 Private Equity Professional | October 10, 2018

Mason Wells Acquires Structural Concepts

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Mason Wells has closed on its acquisition of Structural Concepts Corporation (SCC) in partnership with members of the company’s senior management team and other co-investors.

SCC is a designer and manufacturer of temperature-controlled food and beverage display cases for foodservice establishments and supermarkets. The company was founded in 1972 by James Doss and is headquartered in Muskegon, MI (www.structuralconcepts.com).

“SCC is a leader in supplying the growing grab-n-go, fresh prepared food and beverage refrigerated merchandiser markets,” said Jay Radtke, a Senior Managing Director at Mason Wells. “We believe SCC is well positioned to grow through attractive growth trends, leading product development capabilities, a trusted 45-year-old brand, state-of-the-art manufacturing facilities and a world-class workforce and management team who we plan to back with additional resources for growth.”

Mason Wells acquired SCC from James Doss, his family, and members of the company’s management team. “Structural Concepts is a company we have tracked and admired for a number of years and the company fits very well with Mason Wells in terms of family ownership, our industry knowledge and Midwestern headquarters,” added Mr. Radtke.

“This is an exciting time for Structural Concepts,” said David Geerts, President of SCC. “Our employees have built a great business with an enviable track record of growth.  Mason Wells will provide Structural Concepts with a seamless ownership transition and with resources to help the company to achieve great things.  All current shareholders, including myself, are so excited about Mason Wells’ plans for our future that we have all chosen to reinvest in the business.”

Mason Wells makes investments in Midwest-based companies with revenues of $25 million to $300 million and EBITDAs of $5 million to $30 million. Sectors of interest include consumer packaged goods; packaging materials and converting; outsourced business services; and engineered products and services.  In February 2016, Mason Wells held a final closing of Mason Wells Buyout Fund IV and its related Executive Buyout Fund IV with total commitments of $615 million.  The firm was founded in 1998 and is based in Milwaukee (www.masonwells.com).

© 2018 Private Equity Professional | October 10, 2018

AE Industrial Buys Atlas from Graham

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FMI, a portfolio company of AE Industrial Partners, has acquired The Atlas Group from Graham Partners.

Atlas manufactures flight-critical, complex assemblies on a group of commercial, military and business aircraft, including the 737 MAX, F-35 Joint Strike Fighter, Gulfstream G650, and nearly every Textron Aviation aircraft. The company’s products include aircraft doors, escape hatches, wing structures, and flight control assemblies. Atlas’ customers include Boeing, Spirit AeroSystems, Textron Aviation, Honeywell, Northrop Grumman, and Gulfstream. Atlas, led by CEO Rick Wolf, is headquartered in Wichita, KS (www.theatlasgroup.biz).

Graham Partners formed Atlas in March 2007 through the acquisitions of Atlas Aerospace and Vitron Manufacturing. During its ownership term, Graham diversified the business into a broader mix of blue-chip customers and aircraft submarkets, expanded the company’s manufacturing technologies and engineering capabilities, and strengthened its manufacturing operations. Overall, the company’s revenues doubled and EBITDA increased by 88% from 2007 levels.

AE Industrial Partners (AEI) acquired FMI, a manufacturer of aerospace structural components and subassemblies, in October 2017. FMI manufactures large and complex components that are used on many of the largest commercial aerospace platforms including the 737, 737 MAX, 777, and 787. FMI’s customers include Boeing, Spirit AeroSystems, Asco Industries, Beechcraft, Caterpillar, General Electric, Phillips Petroleum and others. The company was founded in 1992 and is headquartered north of Wichita in Park City, KS (www.fmi-incorporated.com).

“Atlas has a strong reputation for addressing complex manufacturing challenges and delivering world-class quality to its customers,” said Jon Nemo, a Partner of AEI.  “The acquisition of Atlas represents a critical milestone in creating a highly strategic, purpose-built platform and we look forward to partnering with their senior leadership team to grow the business.”

AEI invests in the aerospace & defense, power generation and specialty industrial sectors with a specific focus on technical manufacturing, distribution and supply chain management, MRO (maintenance, repair and overhaul) and industrial service-based businesses.  Typical company targets will have from $50 million to $500 million of revenue. The firm is headquartered in Boca Raton (www.aeroequity.com).

“Atlas’ strong industry position and management’s focus on continuous improvement made it very rewarding to partner with the team,” said Chris Lawler, a Managing Principal at Graham Partners. “We are proud to have built a widely respected leading aerospace assemblies manufacturer and we wish Atlas continued success under new ownership.”

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).

Lazard was the financial advisor to Atlas and PricewaterhouseCoopers was the financial advisor to AEI.

© 2018 Private Equity Professional | October 10, 2018