Archives for May 7, 2019

AUA Forms New Food Platform

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AUA Private Equity Partners has formed Gourmet Culinary Holdings (GCH) as a new platform to acquire US-based premium specialty food manufacturers serving the foodservice and retail sectors.

The new platform already has two operating companies. In March, GCH acquired 100% of the equity of Gourmet Kitchen, a Neptune, NJ-based manufacturer of specialty prepared foods for hotels, restaurants, universities, corporate campuses, and distributors. The company’s products include appetizers, hors d’oeuvres, breakfast items, ethnic products, desserts and other custom and chef-inspired specialty foods (www.gourmetkitcheninc.com). In April, GCH acquired its second company with the buy of 100% of the equity of Kabobs, a Lake City, GA-based manufacturer of hors d’oeuvres, side items and ethnic and breakfast products that are sold to foodservice operators, hotels, convention centers, corporate campuses, professional caterers and universities (www.kabobs.com).

“We are extremely enthusiastic to partner with AUA and the owners of Gourmet Kitchen,” said R. Terry Hunt, chairman of Kabobs. “As we sought to grow our company and expand our facility, we felt AUA was the ideal partner to help accelerate that growth. We share their vision of creating a premium specialty prepared foods platform with a focus on quality, consistency, and extraordinary customer service.”

“We have been thinking about a partnership with Kabobs for years,” said Michael Lacey, president of Gourmet Kitchen. “AUA was able to make that a reality. Together, we will be able to provide a broader product offering and expansive customer service.”

The management teams of both Gourmet Kitchen and Kabobs will continue to be active with their businesses and each companies’ owners have substantial equity stakes in GCH in partnership with AUA. Future add-on acquisitions for GCH will utilize similar transaction structures.

“We are pleased to establish Gourmet Culinary Holdings in partnership with the owners of Gourmet Kitchen and Kabobs as we create the leading premium specialty prepared foods platform in the U.S. Combining the resources, expertise and industry knowledge of our partners will lead to significant synergies across our platform,” said Steven Flyer, a partner of AUA. The formation of GCH and the buys of Gourmet Kitchen and Kabobs was led by Mr.  Flyer, Managing Director Kyce Chihi, and Vice President Ari David.

“We are excited to establish the Gourmet Culinary Holdings platform and partner with talented operators at each of Gourmet Kitchen and Kabobs,” said Andy Unanue, AUA’s managing partner. “Based on the strong performance in our portfolio company Indulge Desserts Holdings, we hope to create similar economies of scale that will allow our partners to accelerate growth and continue to offer premium customized solutions to our customers.” AUA acquired Indulge Desserts in June 2016 and has actively been building the company through add-on acquisitions including the buys of Newark, NJ-based Joey’s Fine Foods (October 2018), Lyndhurst, NJ-based Elegant Desserts (March 2017), and Freeport, NY-based Love & Quiches (January 2017).

AUA Private Equity makes equity investments from $15 million to $75 million in companies with at least $5 million of EBITDA. Sectors of interest include consumer products and services with a focus on family-owned businesses and companies benefiting from the growth of the US Hispanic population. AUA is headquartered in New York (www.auaequity.com).

NXT Capital (www.nxtcapital.com) provided financing for the transaction and Foley & Lardner (www.foley.com) provided legal services.

© 2019 Private Equity Professional | May 7, 2019

Gen Cap Exits Alpha Technics

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Gen Cap America has sold Alpha Technics, a maker of sensor assemblies and precision thermometry instruments, to publicly- traded TE Connectivity. Gen Cap acquired Alpha Technics in April 2011.

Alpha Technics products are used in the in medical, biotech, life sciences and industrial sectors and include temperature sensors and sensor assemblies for patient monitoring and medical equipment; temperature verification kits used to check that equipment and manufacturing operations are running at temperatures that meet regulatory compliance; and catheters, skin sensors, esophageal, myocardial, and other special devices.

Alpha Technics, led by CEO Dan O’Brien and President Lisa Ryan, is headquartered in Oceanside, CA with manufacturing facilities in Tecate, Mexico and Xiamen, China. The company had revenues in 2018 of approximately $20 million (www.alphatechnics.com).

“Alpha Technics has been an expert designer and manufacturer of temperature sensing and measurement products since 1979,” said Mr. O’Brien. “By partnering with Gen Cap over the last eight years, we were able to open a medical device assembly and packaging clean room as well as establish calibration labs in Mexico and China. Those investments amongst others laid the groundwork for us to expand our capabilities and continue our growth.”

“We thoroughly enjoyed supporting the Alpha Technics team in growing the business,” said Chris Godwin, a managing director at Gen Cap America. “This has been an excellent investment for Gen Cap America, and we are confident that Alpha Technics will continue to thrive going forward.”

Gen Cap America invests in companies with revenues between $5 million and $100 million that are active in the manufacturing, distribution or service sectors. The firm is currently investing through Southwest Fund VII, a $250 million fund which had a final close at its hard cap in January 2017. Gen Cap was founded in 1985 and is based in Nashville (www.gencapamerica.com).

“Alpha Technics has been an excellent example of our firm’s long history of teaming with existing management in lower middle market companies,” said Barney Byrd, president of Gen Cap America.

“With Gen Cap’s support, we have been able to expand the company’s product lines, which range from sub-assemblies to full medical devices, and add key facility certifications. This brought value to both Alpha Technics as well as our customers and allowed us to secure our next partnership to continue our company’s legacy of providing quality products,” said Lisa Ryan, president of Alpha Technics.

TE Connectivity (NYSE: TEL), the buyer of Alpha Technics, manufactures connectivity and sensor products for harsh environments in a variety of industries including automotive, industrial equipment, data communication systems, aerospace, defense, medical, oil and gas, consumer electronics and energy. The company (formerly Tyco Electronics) is headquartered in Schaffhausen, Switzerland with an additional regional headquarters facility near Philadelphia in Berwyn, PA (www.te.com).

“The acquisition of Alpha Technics is part of our well-established strategy to expand our leadership position in sensor applications,” said John Mitchell, senior vice president and general manager of TE’s sensors business. “This transaction further establishes TE as a sensor technology leader for the medical market.”

© 2019 Private Equity Professional | May 7, 2019

Blue Point Buys TAS from TEAM

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Blue Point Capital Partners has acquired TAS Environmental Services (TAS), a provider of environmental and industrial services, from TEAM Partners.

TAS Environmental is a regional environmental services company that provides industrial services, emergency and spill response, wastewater disposal, transportation, box rental and terminal services. TAS, led by CEO Ed Genovese, operates out of 13 locations in Texas, Louisiana, and Arkansas and is headquartered in Fort Worth, TX (www.taslp.com).

“TAS values the relationship we have developed with TEAM Partners over these years,” said Mr. Genovese. “Their experience and steady hand allowed the company to navigate growing from a small owner-operated business to a leading regional player.”

TEAM acquired TAS in 2012 and over its investment period closed five add-on acquisitions, added new locations, expanded the company’s fleet, and added additional services. “This transaction represents the culmination of a successful partnership with TAS spanning over six years,” said David Mann, managing partner of TEAM Partners. “Our value creation plan resulted in substantial growth in TAS’ financial performance and generated a great outcome for all the stakeholders.”

The buy of TAS is the fourth platform investment for Blue Point IV, the firm’s fourth middle market buyout fund, which closed in January 2018 at its hard cap of $700 million. Blue Point invests in companies that are active in the manufacturing, distribution and business services sectors and have from $20 million to $300 million in revenue and EBITDA greater than $5 million. The firm has offices in Cleveland, Charlotte, Seattle, and Shanghai (www.bluepointcapital.com).

Blue Point was founded in 1990 and over the past 19 years has made 37 investments in the business services sector. “Blue Point’s ability to leverage our prior experience with multi-branch environmental and industrial services makes TAS a perfect addition to the Blue Point IV portfolio,” said Sean Ward, a partner with Blue Point.  “TAS has created a leading presence in the region, and we are excited to help the company continue to execute on their growth strategies and goals to keep workplaces and the environment healthy and safe.”

“We look forward to partnering with the TAS team to help build upon its strong platform, including via strategic acquisitions, while maintaining the company’s outstanding service and safety track record,” said Charley Geiger, a principal with Blue Point.

TEAM Partners, the seller of TAS, invests in profitable, family-owned and owner-operator businesses that have up to $100 million in revenue and have a minimum EBITDA of $1 million. Sectors of interest include consumer products, industrial services, manufacturing, distribution and business services. The firm was founded by David Mann – previously a partner at Brazos Private Equity Partners – and is headquartered in Dallas (www.teampartnersllc.com).

Brown Gibbons Lang & Company (www.bglco.com) was the financial advisor to TAS on this transaction.

© 2019 Private Equity Professional | May 7, 2019

TA Hits Hard Cap on Lucky 13

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TA Associates has held a first, final, and hard cap closing of its thirteenth fund, TA XIII LP, with total capital commitments of $8.5 billion. TA began raising the new fund during the first quarter of 2019.

TA XIII received commitments from a group of largely existing investors, including public pension plans, sovereign wealth funds, foundations and endowments.

As with its previously raised equity funds, TA XIII will make equity investments of $75 million to $500 million in middle-market growth companies, primarily in opportunities originated and led exclusively by TA. Sectors of interest continue to be technology, healthcare, financial services, consumer and business services. TA expects to begin investing capital from TA XIII during the second half of 2019.

“We are grateful and humbled to have received such a high level of interest in our latest flagship fund,” said Brian Conway, chairman and managing partner at TA. “We sincerely thank our existing and new limited partners for their enthusiastic affirmation of TA Associates’ strategy and culture.”

TA XIII follows TA XII LP, a $5.3 billion private equity fund that began investing in March 2016, and TA Atlantic and Pacific VII LP, a $1.4 billion private equity fund that began investing in January 2014.

“TA XIII will build on our existing strategy of providing transformational capital and strategic resources to great businesses and management teams across the globe,” added Ajit Nedungadi, a managing partner at TA based in London. “We look forward to investing the fund to help companies accelerate growth and deliver compelling investment performance for our investors.”

Since founding in 1968, TA has invested in over 500 companies globally and has raised more than $32 billion in capital. The firm has more than 85 investment professionals with offices in Boston, Menlo Park, London, Mumbai and Hong Kong (www.ta.com).

Goodwin Procter (www.goodwinlaw.com) provided legal services to TA on this fundraise.

© 2019 Private Equity Professional | May 7, 2019

AUA Forms New Food Platform