Archives for January 22, 2019

Palladium Keeps Building TransForce

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TransForce, a recruiting and employment services provider specializing in commercial truck drivers, has acquired The CDL School. This is the 8th add-on acquisition for the company since being acquired by Palladium Equity Partners in July 2015.

The CDL School is a full-service truck driving school that provides training for individuals to obtain their commercial driver’s license. The company’s programs range in length from a few hours to pass an exam (CDL License Training courses) to several weeks to obtain employment (certificate and diploma programs).

CDL School also provides vocational training and employment training for individuals who are seeking employment within the ground transportation industry. The company was founded in 1963 and is headquartered in Miami (www.cdlschool.com).

In 2012, the school launched a military hiring program, Troops Into Transportation, to help service members and veterans find employment in the transportation industry. “We are honored to offer vocation education and employment opportunities to those who have served our country,” said Albert Hanley III, President and CEO of The CDL School. “It is rewarding to find a solution that concurrently provides answers for the ever-present truck driver shortage with the employment need for service members and veterans.”

TransForce is a provider of specialized staffing, recruiting, and workforce management services to the commercial transportation industry. The company supplies qualified commercial truck drivers to third-party logistics companies, private fleets, and trucking companies. TransForce also offers online driving courses, online recruiting solutions, Department of Transportation (DOT) compliance services that include DOT audit preparedness, file qualification services and training, and federal motor carrier regulation education. TransForce operates 47 branches across 24 states and dispatches more than 2,500 drivers on a daily basis. The company was founded in 1991 and has operations across North America with a headquarters in Alexandria, VA (www.transforce.com).

With the purchase of the CDL School, TransForce will now offer a full arrange of training and education programs. “The CDL School will be an exciting addition to our company and to our future, and a high growth service line for TransForce,” said David Broome, President and CEO of TransForce. “This acquisition will incredibly enhance and transform our solutions for drivers and carriers. We will now be able to offer a full life cycle for the driver from education to employment, to safety and compliance, and returning to education for continued training throughout their career.”

Palladium invests from $50 million to $150 million of equity in companies that have $10 million to $75 million of EBITDA.  Sectors of interest include consumer, services, industrials and healthcare. Palladium has a focus on companies that operate in the US Hispanic market.  Since its founding in 1997, Palladium has invested over $2 billion of capital in more than 33 platform investments and completed over 125 add-on acquisitions. The firm is based in New York (www.palladiumequity.com). 

© 2019 Private Equity Professional | January 22, 2019

Gryphon’s HEPACO Acquires PetroChem

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HEPACO, a portfolio company of Gryphon Investors since August 2016, has acquired PetroChem Recovery Services from Succession Capital Partners.

PetroChem provides environmental consulting and remediation services to large industrial, government agencies, small business and residential clients located in the Mid-Atlantic region of the US.

The company’s services include emergency response to spill incidents in addition to hazardous material stabilization and packaging, facility decontamination, and hazardous waste transportation and disposal. PetroChem is headquartered in Norfolk, VA (www.petrochemrecovery.com).

HEPACO is a provider of emergency response, environmental remediation, maritime services, wastewater treatment, and other industrial services across a range of end markets including rail, oil & gas, transportation, power & utility, and manufacturing. The company provides services on both an emergency response and planned basis and in 2017 completed more than 6,500 projects.

HEPACO has 40 locations across more than 40 locations in the Mid-Atlantic, Midwest, Northeast, and Southeast United States and offers a three-hour or less response time within its footprint and on a national basis through its managed network of third-party emergency response vendors. The company, led by CEO Ken Smith, was founded in 1984 and is headquartered in Charlotte (www.hepaco.com).

The buy of PetroChem is the fourth add-on acquisition completed by HEPACO under Gryphon’s ownership. The earlier transactions were the December 2018 buy of Cleveland-based Environmental Management Specialists, a provider of emergency response, remediation, and environmental services; the October 2018 buy of Trans Environmental, a provider of environmental and emergency response services headquartered near Rockford in Loves Park, IL; and the November 2017 buy of Emergency Response & Training Solutions, a Jacksonville, FL-based provider of emergency response services to Fortune 500 companies through a national network of third-party vendors.

“We are excited to continue our successful acquisition strategy with the PetroChem transaction,” said Phil Petrocelli, a Gryphon operating partner. “We anticipate continuing HEPACO’s expansion through new geographies and greater coverage density in attractive markets.”

Gryphon makes leveraged acquisitions and growth investments in middle-market companies. The firm invests from $50 million to $200 million of capital in companies with sales from $100 million to $500 million. Sectors of interest include business services, consumer and retail, automotive, chemical, general manufacturing, healthcare and hotels.

Gryphon closed its fourth private equity buyout fund, Gryphon IV LP, in November 2016 at $1.1 billion, and raised a $100 million captive mezzanine fund, Gryphon Mezzanine Partners LP, in August 2017. Gryphon Investors is based in San Francisco (www.gryphoninvestors.com).

Succession Capital and ARC Industries, an investment firm based in Charlotte, acquired PetroChem in March 2014 from owners and founders, Becky, Joe and Eric Fenska. During Succession’s hold of PetroChem, the company more than doubled revenue. “PetroChem’s stellar environmental team and premium customer service, provided us the foundation to build PetroChem into an environmental leader in Hampton Roads,” said former PetroChem CEO and Succession Capital Managing Partner, Matt Malone. “We believe that HEPACO is the ideal company to facilitate the next phase of growth for PetroChem and its employees, and will allow the company to continue to provide best in class service to its customers, far into the future.”

Succession Capital makes control investments from $3 million to $30 million in companies that have EBITDA from $750,000 to $7 million. Sectors of interest include industrial, consumer and general services. The firm was founded in 2009 and has offices in Norfolk, VA and Charlotte, NC (www.successioncp.com).

© 2019 Private Equity Professional | January 22, 2019

Brass Ring Closes Third Fund

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Brass Ring Capital has closed its third fund at its target of $50 million. The new fund was raised after just 90 days of marketing.

Brass Ring invests in companies with EBITDA from $1 million to $5 million that are active in the business services and manufacturing sectors. The firm will acquire companies nationwide but prefers to invest in the midwest and southeast portions of the US. Brass Ring is headquartered near Minneapolis in Minnetonka, MN (www.brassringcapital.com).

“We are excited to begin the next chapter in our story.  The support we received from existing limited partners was gratifying, and a recognition of the success we have achieved over the last 15 years,” said David Raffel, managing director at Brass Ring.

This new fund now brings Brass Ring’s assets-under-management to $80 million as it continues to oversee the $30 million of capital from its second investment vehicle, RCP Fund II LP, which is presently invested in five portfolio companies as follows: Creative Learning Systems, a Longmont, CO-based provider of turnkey STEM programs for K-12 schools (February 2017); Classic Brands, a Denver, CO-based manufacturer of wild bird feeding products (June 2015); RIE Coatings, an Eden Valley, MN-based applicator of engineered coatings (January 2015); DPIS Builder Services, a Tomball, TX-based provider of engineering and inspection services for residential builders (November 2014); and Portu Sunberg, a Minneapolis, MN-based provider of sales and marketing services to retail vendors (December 2012).

With the closing of its third fund, Brass Ring now intends to hire additional junior investment professionals and expand its Minneapolis office. Additionally, Brass Ring has added Jon Goetze to the firm as an operating partner. Mr. Goetze has over 20 years of experience working with small businesses in the areas of financing, buying/selling companies, business valuations, and strategy development and analysis. He has worked with a wide range of companies – from start-ups to $400 million in revenue – that were active in the manufacturing, distribution, and services sectors. At Brass Ring, Mr. Goetze will be active in due diligence and value creation at the portfolio company level.

© 2019 Private Equity Professional | January 22, 2019

CapStreet Promotes Two

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The CapStreet Group has promoted Adrian Guerra to partner and Kevin Johnson to principal. Both of these promotions became effective on January 1, 2019.

CapStreet makes control investments in privately held, lower middle market companies that are headquartered in Texas and surrounding states. The firm targets companies that have annual EBITDA between $3 million and $20 million and are active in the value-added distribution, industrial services and manufacturing, and business-to-business service sectors.

Mr. Guerra joined CapStreet in 2006 and was promoted to vice president in 2012 and principal in 2015. Prior to joining CapStreet, he spent three years at JP Morgan Chase where he was an analyst in the energy corporate banking and lending groups. At CapStreet, Mr. Guerra has been a key member of the Allied, Red Aviation, General LED, CRS and Revention portfolio company teams.

Mr. Johnson interned at CapStreet during the summer of 2013 and joined CapStreet on a full-time in 2014 upon earning his MBA from the University of Texas. Mr. Johnson was promoted to senior associate in 2016 and vice president in 2017. Prior to obtaining his MBA, he worked for two years at Morgan Stanley in Chicago and two years with Brentwood Associates in Los Angeles. At CapStreet, Mr. Johnson is active with CRS, Incentive Solutions and Revention portfolio teams.

CapStreet was founded in 1990 and is headquartered in Houston (www.capstreet.com).

© 2019 Private Equity Professional | January 22, 2019