Archives for July 18, 2019

Arcline Carves Engine Division from Baker Hughes

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Arcline Investment Management has signed an agreement to acquire the Reciprocating Compression division of Baker Hughes, a GE company (NYSE: BHGE).

The Reciprocating Compression division (RCD) manufactures and services compression and engine systems that are used in a variety of applications, including the transmission of natural gas across domestic and international pipelines. RCD is the original equipment manufacturer and supplier of parts for its systems and provides overhaul and repair services to its customers. Company-owned brand names include Cooper-Bessemer, Ajax, Superior, Gemini, Enterprise, TSI, CSI, TXC, and Joy.

RCD has manufacturing facilities in Houston, TX and Salina, KS and its on-site services are delivered through its network of field technicians operating out of five repair and overhaul shops located around the US. Click HERE for the RCD webpage.

“BHGE’s Reciprocating Compression division serves the most critical infrastructure applications of its customers. We plan to aggressively invest in our long-standing, loyal employee base so that they can support every brand of our equipment operating in the field,” said Arcline CEO Rajeev Amara.

Arcline makes control investments in companies that have from $10 million to $100 million of EBITDA and enterprise values of up to $1 billion. Sectors of interest include industrials, technology, life sciences, and specialty chemicals. The firm closed its first fund, Arcline Capital Partners LP, with $1.5 billion of committed capital in March 2019. Arcline was founded in September 2018 and has offices in San Francisco and New York (www.arcline.com).

Robert W. Baird & Co. was the financial advisor to Arcline in connection with the acquisition.

© 2019 Private Equity Professional | July 18, 2019

Arsenal Buys Closed-Loop Plastic Company

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Arsenal Capital Partners has agreed to acquire a controlling interest in Revolution, a provider of sustainable, closed-loop plastic products serving the agricultural, consumer, and industrial markets.

Revolution markets an array of plastic products used in the agricultural sector, which it then recovers, cleans and processes into a post-consumer resin (PCR).  The company closes the loop by using this PCR to manufacture the same agricultural products again along with other products such as trash can liners, carryout bags and construction films.

The company’s brands include Delta Plastics, Revolution Bag, Revolution Ag, Rodeo Plastics, and Command. Revolution is led by CEO Sean Whiteley and is headquartered in Little Rock, AR (www.revolutioncompany.com).

“We commend the company on its success in building a market-leading business and the management team’s passion for developing unique sustainable plastic solutions,” said Tim Zappala, a senior partner of Arsenal. “Through its innovative closed-loop process, Revolution has led the industry in recycling for both closed and green out loops, keeping over 1.5 billion pounds of plastic out of the landfills.”

Arsenal invests in middle-market specialty industrial and healthcare companies that have from $100 million to $500 million in enterprise value. The firm has offices in New York and Shanghai (www.arsenalcapital.com).

“We are excited about the many growth initiatives available to us and our partnership with Arsenal will help us identify and capitalize on those opportunities,” said Mr. Whiteley. “They have successfully invested in businesses like ours and their background in manufacturing, focus on sustainability and commitment to expanding our recycling and manufacturing capabilities is a perfect fit with our corporate objective of making plastic a renewable resource.  The dramatic growth in demand and expectations by businesses and consumers for sustainable plastic solutions provides us with significant white space and opportunity.”

“Revolution has the most innovative and scaled methods for recycling plastic film, coupled with industry-leading capabilities to manufacture high PCR finished products in many cases closing loops for its customers,” said George Abd, an operating partner of Arsenal. “This is just the beginning of the long-term trend for robust growth as demand continues to build for better ways to handle plastic waste and PCR products, and Arsenal is excited about being a strategic partner to accelerate Revolution’s growth both organically and inorganically.”

Dhu Thompson, former majority owner and chairman of Revolution, will continue as a board member and retain a meaningful investment in the company upon completion of the transaction which is expected by the end of July.

According to a source familiar with this transaction, Twin Brook Capital Partners, the middle-market direct lending arm of Angelo Gordon, served as joint lead arranger and syndication agent on debt financing to support the transaction. Chicago-based Twin Brook focuses on loans to private equity-owned companies with EBITDA between $3 million and $50 million, with an emphasis on companies with $25 million of EBITDA and below. The firm targets senior financing opportunities up to $200 million, with hold sizes across the platform ranging from $25 million up to $150 million. Twin Brook’s products include opportunistic investments in second lien, mezzanine, and equity co-investments.

William Blair & Company was the financial advisor to Revolution.

© 2019 Private Equity Professional | July 18, 2019

Mill Point Quickly Building Foam Packager

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Huntington Solutions, a portfolio company of Mill Point Capital, has acquired Texas Foam.

Texas Foam is a manufacturer of extended-duration shippers and temperature-sensitive protective foam packaging products used in the medical, instrumentation, pharmaceutical and food and beverage industries.

The company was founded in 1991 and is headquartered near Austin in Bastrop, TX (www.texasfoam.com).

Huntington Solutions, acquired by Mill Point Capital in September 2016, is a maker of custom-engineered shape-molded and fabricated foam made from expanded polystyrene (EPS), expanded polypropylene (EPP) and other advanced resins. The company’s products are used in the appliance, cold chain, HVAC, consumer electronics, medical, and automotive sectors. Huntington, led by CEO Ed Flynn, is headquartered in Greer, SC and operates six plants in South Carolina, Michigan, Ohio, Texas and two in Mexico (www.hunt-sol.com).

“We are extremely excited that Texas Foam will be joining Huntington as its seventh facility. Texas Foam offers a wide variety of impressive and proven cold-chain packaging technologies that will augment our ability to meet the needs of our customers,” said Mr. Flynn. “Additionally, with a newfound presence in the Southwest, Texas Foam further expands Huntington’s geographic footprint, allowing our offering to reach an entirely new cohort of customers.”

“With the acquisition of Texas Foam, Huntington substantially increases and broadens its production capabilities in the fast-growing market that is temperature-sensitive packaging,” said Scott Martin, executive chairman of Huntington Solutions. “We view the transaction as highly complementary to both organizations, each of which will benefit from the sharing of technologies and implementation of operational best practices.”

Just a few months ago, Huntington Solutions acquired the assets of RADVA Corporation, a maker of protective and temperature-sensitive foam packaging products. The Radford, VA-based company’s products are used in a range of industries including consumer electronics, automotive, appliances, medical, and pharmaceutical (www.radva.com).

Mill Point makes control-oriented investments of $15 million to $80 million in middle-market companies that have enterprise values of $50 million to $250 million. Sectors of interest include business services and industrial. Mill Point Capital closed its inaugural institutional fund, Mill Point Capital Partners LP, at its hard cap of $450 million in May 2018. The firm was founded by Managing Partner Michael Duran and is based in New York (www.millpoint.com).

© 2019 Private Equity Professional | July 18, 2019

Falls River Adds Life Sciences Pro

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Falls River Group, a middle-market investment bank, has added Stephen Maddox to its team as a group president in the firm’s life science sector.

Mr. Maddox will lead the firm’s Life Sciences Team in developing investment opportunities and in the provision of sell and buy-side transaction, advisory and strategic planning services.

Prior to joining Falls River, Mr. Maddox was the General Manager, Life Sciences and Process Systems for Saint-Gobain, a multinational company based in Courbevoie, France. At Saint-Gobain he had worldwide P&L accountability for $500 million of revenues and $100 million of EBITDA from 26 factories, 6 countries, and over 2,500 people. Mr. Maddox’s work experience includes building state-of-the-art international factories for individual customers, implementing new direct sales channels, accelerating growth, and improving profits in the regulated pharmaceutical sector. In prior positions at St. Gobain, Mr. Maddox held general manager responsibilities for NorPro Catalytic Products, and he was Director, Strategy & Planning for acquisitions, and portfolio management. He has a BS in Metallurgical Engineering from Ohio State and an MBA from the University of Chicago.

“We are very excited that Steve is joining the Falls River Group team and bringing leadership to our life sciences sector that we have served since our founding over 25 years ago,” said Kerry Dustin, founder and chairman of Falls River Group.

“Steve’s experience expands our vision for disruptive change said Mike Wetzer, CEO of Falls River Group. “We are pleased to have him join our firm and utilize his wealth of experience and deep industry knowledge to lead our life sciences team.

Falls River Group is a mergers and acquisitions advisory firm based in Naples, FL. The firm’s sell-side clients typically have annual revenues of $20 million to $500 million and include both privately held companies and divestitures of publicly traded companies. Buyers range from private family wealth funds and private equity groups to Global 1000 companies (www.fallsrivergroup.com).

© 2019 Private Equity Professional | July 18, 2019