Archives for November 9, 2018

LFM, Backed by Abacus, Acquires Fecon

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LFM Capital has acquired Fecon, a maker of heavy-duty forestry equipment. Abacus Finance Group provided the senior debt to support this acquisition.

Fecon designs and manufactures heavy-duty forestry mulching equipment and related forestry accessories including its patented line of Bull Hog attachments (which include carrier, skid steer and excavator mounted rotational brush cutting and forestry mulching attachments), replacement parts, APEX hydro-seeding and environmental spray applicators, and a range of mounted attachments such as stump grinders, grapples and shears.

Fecon’s products are used for vegetation management, erosion control, general land clearing, and habitat restoration. Fecon, founded in 1992, has 210 employees and is headquartered northeast of Cincinnati in Lebanon, OH (www.fecon.com).

“We are proud of what we have built at Fecon over the last 25 years,” said Fecon’s President, John Heekin. “We have developed engineering, manufacturing and customer support teams that provide an excellent product and experience for our customers. We are excited to partner with LFM to grow the business and because of the operational experience they bring to help us continue our growth.”

“Fecon is a clear leader in its niche and is highly regarded for the exceptional quality and performance of its products,” said LFM Managing Director Dan Shockley. “Partnering with the outstanding team at Fecon, which has a strong record of operational expertise and execution, we plan to further invest in product development and manufacturing with a focus on growing into new markets and executing operational initiatives.”

Abacus Finance Group was the Administrative Agent and Lead Arranger for senior secured credit facilities to support the leveraged buyout of Fecon by LFM. “This was our second transaction with LFM Capital, and once again they demonstrated how well they understand manufacturing. Fecon is a quality company and a leader in its field, one that fits perfectly with our focus on the lower-middle market,” said Tim Clifford, President and CEO of Abacus Finance.

“It was good to work again with the Abacus team, which knows the manufacturing space well,” said LFM Capital Executive Managing Director Steve Cook. “The due diligence process went smoothly and communications – including early assurance of closure – were clear from the beginning.”

Abacus provides cash flow-based senior financing to private equity-sponsored, lower-middle market companies that have EBITDA between $3 million and $15 million. Debt facilities can be as large as $60 million with a typical hold size ranging from $10 million to $30 million.  Since its inception in June 2011, Abacus has closed over $1.9 billion in financings. Abacus is headquartered in New York and is an affiliate of New York Private Bank & Trust (www.abacusfinance.com).

“As in other transactions, our success was a function of our speed, flexibility, and certainty of close – key aspects of what we call our Total Partnership Approach™,” said Eric Petersen, Senior Vice President of Abacus Finance.

LFM is based in Nashville and invests in US-based manufacturing and industrial services companies with at least $3 million of EBITDA and enterprise values from $15 million to $125 million.  LFM was formed in May 2014 by Steve Cook, Executive Managing Director; Rick Reisner, Managing Director; and Dan Shockley, Managing Director (www.lfmcapital.com). In October 2018, the LFM closed its second fund, LFM Capital Partners II LP, with $184 million in capital commitments. The firm’s earlier fund closed in October 2014 with $110 million of capital commitments.

© 2018 Private Equity Professional | November 9, 2018

Incline Builds Bearing Business

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P.T. International, a portfolio company of Incline Equity Partners, has acquired IPTCI Bearings. Incline acquired P.T. International from Tonka Bay Equity Partners in January 2018.

IPTCI specializes in the supply of standard and corrosion resistant mounted ball bearings to the industrial, agricultural and food and beverage industries. The company has been in business for more than 45 years and has 23 sales offices across the country. IPTCI is based near Minneapolis in Chanhassen, MN (www.iptci.com).P.T. International (PTI) is a supplier of metric and American standard power transmission products used in industrial and commercial applications. The company’s products include mounted ball and roller bearing units, roller chains, gears, sprockets and other products that are sold to original equipment manufacturers and large national distributors for use across a range of end-markets.  PTI was founded in 1994 and is headquartered in Charlotte, NC (www.ptintl.com).

“The acquisition of IPTCI significantly increases our offering of both standard and corrosion resistant mounted ball bearings,” said Darin Davenport, Chief Executive Officer of PTI. “Additionally, the geographic footprint of IPTCI allows us to better serve customers in the Central and Western United States.”

“IPTCI is a leading name in the bearing and mechanical power transmission markets,” said Leon Rubinov, a Partner with Incline. “Partnering with the business meaningfully strengthens PTI’s product offering. We are also very proud to have nearly doubled the size of PTI in less than one year of partnering with the management team.”

Incline Equity Partners invests from $15 million to $30 million in support of recapitalizations, buyouts and corporate divestitures of lower middle market companies that have EBITDAs greater than $5 million and enterprise values between $50 million and $300 million. Sectors of interest include value-added distribution, specialized light manufacturing, and business and industrial services.  Incline was formed in 2011 and is based in Pittsburgh (www.inclineequity.com).

© 2018 Private Equity Professional | November 9, 2018

TorQuest Invests in Cando Rail Services

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TorQuest Partners has acquired Cando Rail Services, a provider of specialized rail support services that allow industrial customers to optimize their bulk material supply chain and connect to Class 1 railways.

Cando Rail Services provides a range of rail services, including industrial switching, material handling, logistics, terminal & transload services, mechanical services, railcar storage, and engineering & track services. The company’s services are used by its customers to optimize their bulk material supply chains at more than 25 locations across North America.

Cando was co-founded by Gord Peters and Rick Hammond in 1978 and has approximately 600 employees. The company is led by CEO Brian Cornick and is headquartered in Brandon, MB (www.candorail.com).

“The company is very well positioned to benefit from growing demand for first-mile/last-mile rail logistics solutions,” said Mr. Cornick. “We welcome TorQuest’s investment and look forward to leveraging our market leadership position with an enhanced balance sheet and deep access to capital, in order to deliver more services to more customers in more markets.”

“Since Cando was founded in 1978, it has built a very successful business, achieved tremendous growth, and solidified its leading position in the market,” said Jonathan Fraser of TorQuest. “We are pleased to have partnered with Cando’s employee shareholders and will work alongside them to help grow the company’s core business by continuing to leverage their strengths in operational performance, commitment to safety, and outstanding customer service.”

TorQuest was founded in 2002 and has over C$2 billion of equity capital under management. In July 2016 the firm held an above-target final closing of TorQuest Partners Fund IV at the fund’s hard cap of C$925 million. TorQuest is headquartered in Toronto (www.torquest.com).

“I am very proud of how far Cando has come, and this transaction marks the next stage of the company’s evolution,” said Mr. Peters, who will remain invested in the business, and a member of the Board of Directors. “TorQuest’s investment speaks volumes about the quality of Cando’s employees, assets, and operational capabilities. An important component of Cando’s success has been its focus on employee ownership and that program will continue.”

© 2018 Private Equity Professional | November 9, 2018

New Heritage Keeps Building Continental

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Continental Services, a portfolio company of New Heritage Capital, has acquired United Vending & Market Service. Continental was acquired by New Heritage in February 2017.

United Vending & Market Services is a provider of vending, micro-market and office coffee services to customers in the metropolitan Detroit area.

The company is headquartered near Detroit in Ferndale, MI (www.uvmsi.com). As part of the transaction, the entire United Vending management team and staff will join the Continental team.

Continental provides its customers with a range of services, including corporate cafés, grab-and-go markets, vending, office coffee, and special event catering. The company serves more than 700 small and medium-sized businesses, blue-chip corporations, colleges, universities, business, and industrial sites, and hospitals and medical centers.   Continental was founded in 1989 and is headquartered north of Detroit in Troy, MI (www.ContinentalServes.com).

The buy of United Vending is the fourth add-on acquisition completed by Continental in the past year, and its largest acquisition to date. “United Vending brings Continental a wonderful cross-section of accounts and a large and loyal client base,” said Steve LaPorte, President of Continental’s refreshment services group. “We are delighted to have its well-seasoned, customer-focused staff join our refreshment services operations. The success of these deals has substantiated and helped the company work toward its goal of expanding its market presence in Southeast Michigan.”

The three earlier add-on acquisitions completed by Continental were Metro Vending Service (Roseville, MI) in April 2018; 24 Hr. Vending (Brighton, MI) in January 2018; and Satellite Vending Company (Wixom, MI) in September 2017.

New Heritage invests minority or majority equity in companies with minimum revenues of $30 million and at least $5 million of EBITDA. Sectors of interest include aerospace, business services, consumer products, distribution, education and training, food and beverage, healthcare and healthcare services, industrial and infrastructure, manufacturing, pet products and services, specialty chemical, and test and measurement. Heritage was founded in 2006 and is headquartered in Boston (www.newheritagecapital.com).

© 2018 Private Equity Professional | November 9, 2018