Archives for October 31, 2018

Akoya and Hillcrest Partner on CSS

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Akoya Capital Partners and Hillcrest Holdings have acquired Evolver and eVigilant, two Virginia-based security companies, to form Converged Security Solutions.

Converged Security Solutions (CSS) provides both cyber and physical security services including surveillance, building access control, intrusion detection, mass notification, perimeter screening, barriers, gate controls, biometric technology, and visitor management systems. The company’s services include assessment, remediation, and monitoring of IT and infrastructure to quantify, reduce, and manage security risk. CSS is headquartered in Reston, VA (www.convergedsecuritysolutions.com) (www.evolverinc.com) (www.evigilant.com).

John Regazzi, Akoya’s Information Services Sector Leader, will serve as Chairman of the Board of CSS, and Dr. Bob Friedenberg, an Akoya Operating Partner, will serve as the newly appointed CEO of CSS. “The CSS executive team brings a rich, extensive background and depth of expertise in cyber and physical security for public and commercial sectors alike. We are thrilled to work with the existing management team in growing and expanding the company’s product lines, customer relationships and geographic footprint,” said Mr. Regazzi.

Akoya Capital Partners invests in US-based companies with revenues from $20 million to $200 million and EBITDA of at least $3 million. Sectors of interest include specialty chemicals, industrial products and distribution, consumer foods and products, and professional information services. The firm is headquartered in Chicago (www.akoyacapital.com).

The creation of CSS is Akoya’s 14th platform investment and its second consecutive investment partnering with a family office. “The CSS acquisition is consistent with our investment strategy of combining world-class executives, well-positioned companies, and fully developed value creation strategies to create significant value for management and investors.   We were delighted to partner with Hillcrest Holdings on this transaction as they have proven to be a value-added investor and strategic partner,” said Max DeZara, Managing Partner of Akoya.

Hillcrest Holdings is a family-owned holding company that invests in privately held middle market businesses in the United States that have enterprise values between $25 million and $150 million. Hillcrest is led by Chairman and President John Smith and Vice President Ian Smith. The Smith family business dates back to 1955 when Herald and Miriam Smith started Cedar Rapids Steel Transport (CRST). Now in its third generation of family ownership, CRST International has evolved from a trucking firm to one of the nation’s leading providers of transportation services. Cedar Rapids, IA-based Hillcrest was formed in 2012 to diversify and grow the family-owned business through direct equity investments outside of the transportation industry (www.hillcrestholdings.com).

BMO Harris Bank provided senior debt to support this transaction and Tecum Capital Partners provided subordinated debt and made an equity co-investment.

© 2018 Private Equity Professional | October 31, 2018

Southfield Closes Dividend Recap of Vanguard

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Southfield Capital has completed a dividend recapitalization of its portfolio company, Vanguard Dealer Services.

Vanguard is an agent and administrator of finance and insurance (F&I) products and services to franchised automobile dealers.  Vanguard offers a portfolio of proprietary and third-party auto extended warranty (vehicle service contracts) and ancillary products such as tire protection, key replacement, dent repair and pre-paid maintenance.  The company also offers other financial and insurance consulting services to dealers such as training, compensation plan development, reinsurance, incentive management, sales strategy, compliance review, and staffing.  Vanguard was founded in 1999 and is headquartered just west of New York City in Fairfield, NJ (www.vanguarddealerservices.com).

Vanguard’s senior management team, led by CEO Jim Polley, along with Ed Reitz and Mike Seergy, invested alongside Southfield Capital to acquire the business in August 2015. “Vanguard has grown due to its relentless pursuit of driving dealer, administrator, and OEM profitability,” said Mr. Polley “We will continue to invest in our systems, processes, and people to ensure that we remain the best-in-class F&I product and training provider in the industry.”

Crescent Capital, an alternative asset manager with over $25 billion of assets under management, provided the financing to support the Vanguard dividend recapitalization transaction. Crescent Capital invests in debt securities at all levels of a company’s capital structure. The firm has more than 160 employees and is headquartered in Los Angeles with offices in New York, Boston, and London (www.crescentcap.com).

“Vanguard has experienced tremendous growth over the last couple of years, more than tripling since the time of our investment three years ago,” said Andy Cook, a Partner at Southfield Capital. “The management team has executed on our initial growth strategy and we are excited to partner with Crescent to capitalize the business for the next stage of growth.”

Southfield Capital makes control investments in companies that have revenues of $20 million to $100 million and EBITDA of $4 million to $12 million. Sectors of interest include outsourced business services, specialty finance, and value-added distribution. In August 2017, the firm held a final close of Southfield Capital II LP with approximately $200 million in capital commitments. The close was at the fund’s hard cap and exceeded its original target of $175 million. Southfield Capital was founded in 2005 and is headquartered in Greenwich, CT (www.southfieldcapital.com).

© 2018 Private Equity Professional | October 31, 2018

GI Adds to Legal Services Platform

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Consilio, a portfolio company of GI Partners, has acquired DiscoverReady, a provider of legal support services.

In April 2018, GI Partners formed Consilio through the acquisitions of two legal services providers – Advanced Discovery, a portfolio company of Trivest Partners, and Consilio, a portfolio company of Shamrock Partners and Trinity Hunt.

Today, Consilio is a provider of eDiscovery, document review, risk management, and legal consulting services to multinational law firms and corporations. Consilio operates through a family of companies including Advanced Discovery, Altep, Millnet Document Services, and Legal Placements Inc. The company has extensive experience in litigation, Hart-Scott-Rodino second requests, internal and regulatory investigations, eDiscovery, document review, information governance, compliance risk assessments, cybersecurity, law department management, contracts management, legal analytics, paper discovery, digital printing, as well as legal recruiting and placement. Consilio is headquartered in Washington, DC (www.consilio.com).

DiscoverReady, led by CEO James Schellhase, has 18 offices, review and data centers with a headquarters in Charlotte, NC (www.discoverready.com). The combined operations of DiscoverReady and Consilio will have more than 70 offices, review and data centers across 11 countries.

“DiscoverReady has a well-earned reputation of delivering consistently exceptional service experiences through the innovative application of advanced technologies,” said Andy Macdonald, CEO of Consilio. “This acquisition aligns well with our strategy to invest in differentiated solutions that result in a superior and consistent client experience.”

“We are incredibly excited to enhance our best-in-class eDiscovery and document review platform with Consilio’s acquisition of DiscoverReady,” said Hoon Cho, Managing Director of GI Partners. “With this year’s continuing success in integrating Consilio and Advanced Discovery, and now the acquisition of DiscoverReady, Consilio is committed to being the leading global provider of eDiscovery.”

GI Partners makes control equity investments in companies with enterprise values of $250 million to $1 billion that are active in the IT infrastructure, healthcare, software, and services sectors. In November 2017, the firm held a final closing of GI Partners Fund V LP at an oversubscribed and hard cap of $2.8 billion. GI Partners was founded in 2001 and is based in San Francisco (www.gipartners.com).

© 2018 Private Equity Professional | October 31, 2018

Audax Closes First Dancewear Add-on

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Revolution Dancewear, a portfolio company of Audax Private Equity, has acquired International Dance Supplies, Ltd (IDS). The buy of IDS is the first add-on acquisition by Revolution since being acquired by Audax in July 2018 from Incline Equity Partners.

International Dance Supplies is a wholesaler and retailer of dancewear, dance shoes, dance costumes and accessories. The company, with approximately eighty employees, was founded in 1978 and is headquartered in Newton Abbot, UK (www.idsdance.com).

Revolution Dancewear is a designer and marketer of dance recital costumes, competition costumes, footwear, and dancewear. The company sources its products from suppliers in Asia and sells directly to more than 12,000 worldwide customers including dance studios, dance schools, public programs, and dancers. Company-owned brand names include Revolution, 10th House, and Plume. Revolution also operates Dance Direct, a Swindon, UK-based seller of dancewear to consumers. The company, led by CEO Joe Sclafani, was founded in 1996 and is headquartered in the Chicago suburb of Niles, IL (www.revolutiondance.com) (www.dancedirect.com).

The acquisition of IDS strengthens Revolution’s and Dance Direct’s positions in the costume segment of the market to teachers and dance studios and expands the company’s operating footprint across Europe. “IDS is a well-respected leader in the costume and dancewear space with an excellent reputation and leadership team,” said Mr. Sclafani. “The acquisition is a perfect example of our ongoing strategy to complement organic growth with strategic acquisitions of industry-leading companies.”

Audax Group makes control investments of $10 million to $100 million in middle market companies with transaction values of $25 million to $500 million. Sectors of interest include industrial manufacturing; energy; outsourced industrial services; consumer products; healthcare devices and services; non-asset based logistics; technology; aerospace & defense; business services; and direct marketing. The firm was founded in 1999 and has offices in Boston, New York and Menlo Park (www.audaxgroup.com).

© 2018 Private Equity Professional | October 31, 2018