Tree Line Capital Partners, a direct lender focused on the lower middle market, has provided a first-lien term loan and revolver, and made equity co-investment to support O2 Investment Partners’ recent investment in Frontier Dental Laboratories, a maker of dental prosthetics.
Frontier Dental is a full service, multi-site dental laboratory that provides high-end dental prosthetics, removable dental products and implants primarily for the cosmetic dentistry industry. The company’s products include full arch and multi-unit anterior crowns and bridges, veneers, single and multi-posterior crown and bridges, as well as single unit and full mouth implants.
Frontier has more than 500 customers, primarily private practices, and is led by President Brent West, and VP of Sales and Marketing Gil Villavecer. The company operates through two dental laboratories in El Dorado Hills, CA and Vancouver, BC (www.frontierdentallab.com).
“We appreciate Tree Line’s support in building the Frontier platform and are excited to expand our partnership with Tree Line with our third deal with them in thirteen months,” said Luke Plumpton, a partner at O2. “Tree Line sees what we see in Frontier, an incredible team led by Brent West and Gil Villavecer with a strong vision for growth. O2 is here to support the Frontier team and that’s Tree Line’s approach as well. We chose to work with Tree Line again not only for their proven efficient process and certainty of closing but also due to their ability to fulsomely respond to growth financing needs in the future.”
“The investment in Frontier highlights Tree Line’s ability to efficiently underwrite an initial financing for a lower middle market company, but with a platform mentality; we enjoy collaborating with our sponsors regarding forward-thinking for future financing needs, and believe O2 and Frontier are capitalizing on an exciting opportunity in building a leading dental lab platform that we can support with future debt and equity financing,” said Frank Cupido, a partner of Tree Line.
O2 and Tree Line have partnered up before, most recently in June 2019 when Tree Line backed O2’s investment in and strategic alliance with Patriot Energy Group (PEG) as an add-on investment to EMEX, a Houston-based provider of energy-related software and consulting services that O2 invested in during June 2018 with financing from Tree Line. PEG is a Burlington, MA-based client-side energy broker and advisor that assists customers in managing risks associated with energy costs. “As always, Tree Line ran a highly efficient process which was important to us given the scale of this acquisition,” said Joe Vallee, a vice president at O2. “Tree Line meaningfully expanded its credit facility and equity co-investment to facilitate EMEX’s investment in PEG. O2 is excited to continue expanding the relationship with Tree Line and fuel the growth of this highly scalable technology platform.”
“The EMEX transaction highlights Tree Line’s ability to provide initial platform financing and subsequent meaningful expansion capital for add-ons; in this case, we nearly doubled our initial investment with the company and did so efficiently given our existing framework,” said Jon Schroeder, a managing partner of Tree Line.
Tree Line is a direct lender focused on providing first lien term loans, unitranche term loans and equity co-investments to North American-based lower middle market companies with $3 million to $30 million of EBITDA and transaction sizes up to $150 million. The firm currently manages $1.2 billion in investable capital and has completed over 72 transactions for acquisitions, recapitalizations, refinancings, expansion projects and other growth capital needs. Tree Line is headquartered in San Francisco with an additional office in New York (www.treelinecp.com).
O2 makes control investments of $5 million to $75 million in companies with EBITDAs from $2 million to $10 million located anywhere in the US and Canada but prefers the Midwest and the Great Lakes regions. Sectors of interest include niche manufacturing, niche distribution, select service businesses, and certain technology businesses. In October 2017, the firm held a final closing of its Oxygen Fund with an above-target $100 million of capital commitments. O2, based in the Detroit suburb of Bloomfield Hills, is backed by the Orley family which has been investing in operating businesses and real estate since 1950 (www.o2investment.com).
© 2019 Private Equity Professional | July 30, 2019
