Archives for August 14, 2019

Castle Harlan and Branford Castle Looking Great

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Castle Harlan and Branford Castle Partners have acquired Sunless, a maker of spray tanning equipment and supplies, from The Riverside Company which acquired the company in July 2011.

Sunless is a manufacturer of spray tanning booths, airbrush equipment, proprietary tanning solutions, and professional-grade retail products used in the sunless tanning segment of the indoor tanning industry. Company-owned brands include MysticTan, VersaSpa and Norvell.

Sunless’ booths are installed in thousands of tanning salons, fitness clubs, beauty salons and other retail channels, and are responsible for more than 12 million spray tans per year. The company is also a leader in handheld spray tanning equipment and solutions used by airbrush artists to manually apply full-body spray tans. Sunless is headquartered in Macedonia, OH (www.sunlessinc.com).

“Spray tanning is quick, easy, and allows people to look awesome,” said John S. Castle, president and CEO of Branford Castle. “Branford’s deal team has been looking especially great since due diligence started.  Further, we are very excited to work closely with the company’s customers to best address their needs and grow the industry as a whole.”

New York-based Branford Castle invests in companies that have enterprise values of up to $100 million and have from $1.5 million to $15 million of EBITDA. Sectors of interest include industrials, consumer goods & services and transportation & logistics industries. Between its founding in 1986 (by John K. Castle who also founded Castle Harlan) to 2016, Branford Castle operated as a family office. In October 2016, Branford Castle held a final close of its first fund that was open to outside investors and the investment in Sunless is the eleventh transaction for this fund.

In July 2016, Branford Castle invested in a similar company to Sunless when it acquired Earthlite, a Vista, CA-based manufacturer of massage tables, beauty and wellness equipment, supplies and accessories, oils and creams, manicure and pedicure equipment. The company’s most prominent products are its massage tables, which have an estimated 20% global market share.

“Sunless is an excellent opportunity to acquire the leader in a growing and recurring consumer market,” said Eric Schwartz, a managing director of Castle Harlan.  “Demand for spray tanning is strong.  It is amazing how quickly consumers who try spray tanning become regular adopters, and we expect this trend to continue in the coming years.”

Castle Harlan makes control investments in middle-market companies in North America, Europe and Australia. The firm has raised eight private equity funds – five in the United States and three in Australia – totaling more than $6 billion in capital commitments.  Castle Harlan was founded in 1987 and is based in New York.

The Riverside Company, the seller of Sunless, is a global private equity firm focused on investing in and acquiring growing businesses valued at up to $400 million. Since its founding in 1988, Riverside has invested in more than 600 transactions and its portfolio includes more than 90 companies. The firm is headquartered in New York.

© 2019 Private Equity Professional | August 14, 2019

Aterian Buys Health and Beauty Platform

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Aterian Investment Partners has acquired Bright International, a maker of hair bleach products that are used in the health and beauty, and personal care markets.

Bright manufactures hair bleach products, shaving depilatory powders, developers and hair colors that are used by consumer product brands sold into the professional salon and retail markets. The company’s services include research and development, formulation, blending, packaging, filling, and kitting.

Bright was founded in 1987 by Anthony Bibars and has a manufacturing facility and headquarters near Phoenix in Coolidge, AZ (www.brightcorp.us).

“This transaction will allow for Bright to expand the depth and breadth of its portfolio offerings with a new ownership group who has a track record of investing in operations and growing businesses alongside management,” said Mr. Bibars. “We believe Aterian’s support will allow the company to pursue several near-term strategic initiatives and continue providing the highest quality products to our customers.”

“As Bright’s partner we look forward to bringing further innovation, capital and resources to the organization while maintaining the customer-centric approach and manufacturing expertise that made Bright the world-class operation it is today,” said Christopher Thomas, co-founder and partner at Aterian. “The company will be a platform for further investments in the consumer, health and beauty, and personal care industry.”

“Bright has established its impressive market leadership position by uniquely marrying innovation and R&D support with contract manufacturing,” said Joshua Ciampa, a principal at Aterian. “The company has made significant investments in its human capital, facility and equipment, laboratory, and processes to differentiate itself, and complements Aterian’s investments in market-leading manufacturing businesses.”

Aterian invests up to $65 million in small-to-middle market businesses with $25 million to $500 million in revenues. The firm’s sectors of interest are wide and include manufacturing, distribution, chemicals, metals and mining, industrials, retail, consumer products, restaurants, food and beverage, and health care services. Aterian held a first and final closing of Aterian Investment Partners III LP with $350 million of committed capital in July 2018.

Aterian was founded in 2009 by Brandon Bethea, Michael Fieldstone and Christopher Thomas and is based in New York (www.aterianpartners.com).

Houston-based investment bank GulfStar Group was the financial advisor to Bright International on this transaction.

© 2019 Private Equity Professional | August 14, 2019

Westhook Adds to Metco Landscape

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Metco Landscape, a portfolio company of Westhook Capital, has acquired PGM, a provider of commercial landscape maintenance services.

PGM (Perfection Grounds Maintenance) was founded by its president Dan Pohja more than 30 years ago and is based in Colorado Springs (www.perfectiongrounds.com).

Metco Landscape, acquired by Westhook in September 2018, is a Colorado-based provider of commercial landscape maintenance, development, design, enhancement, and snow removal services. The company, with revenues of $64 million, was ranked as the 26th largest North American lawn care and landscaping company in 2019 by Lawn & Landscape magazine.

Metco operates out of its headquarters in Aurora, CO, with additional branches in Denver, Colorado Springs, and Fort Collins (www.metcolandscape.com).

“PGM is a great company that shares our mission and relentless focus on providing high-quality landscaping services and customer satisfaction,” said Mark Tomko, founder and CEO of Metco. “We are impressed with PGM’s people, reputation, and the positive impact they have had in their community and are excited to partner with Dan Pohja and his team.”

Westhook invests in buyouts of US-based lower middle market companies that have at least $20 million of revenue and EBITDA of $4 million to $15 million. Sectors of interest include consumer, industrial, business services and healthcare services. The Los Angeles-based firm held a final closing of its inaugural fund, Westhook Capital Partners LP, with $140 million in commitments in September 2018 (www.westhook.com).

Ceibass Venture Partners was the financial advisor to PGM on this transaction.

© 2019 Private Equity Professional | August 14, 2019

Great Point Hits Fund III Hard Cap

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Great Point Partners has held a final closing of Great Point Partners III LP (GPP III) at its hard cap of $306 million. The new fund was oversubscribed and exceeded its initial target of $250 million.

Limited partners in GPP III include endowments, foundations, family offices, banks, and pension funds. In addition, Great Point’s investment team and members of the firm’s CEO Advisory Board invested in the new fund and together have committed approximately 8% of GPP III’s committed capital.

“We are pleased to announce our final close,” said Jeffrey Jay, MD, co-founder and managing director of Great Point. “We were gratified to receive strong support from both our existing investors, many of whom have been invested with us since the inception of our private equity strategy in 2005, and a select group of new leading institutional limited partners.”

Great Point makes both control and minority investments of $7 million to $50 million in healthcare companies that are based in the US, Canada or Western Europe. Typical targets will have revenues of $10 million to $100 million and $2 million to $12 million of EBITDA. Sectors of specific interest within healthcare include biopharmaceutical supply chain services and products, hospital outsourcing and services, information technology-enabled services, medical devices, and diagnostics.

“We see the success of this fundraise as a clear endorsement by our investors of our growth buyout and growth recapitalization investing model, pro-active sourcing strategy and deep health care expertise,” said David Kroin, co-founder and managing director.

The new fund has already invested 30% of its  committed capital in three companies: SteriPack, a Mullingar, Ireland-based contract manufacturing and value-added services company serving the medical device and pharmaceutical industries (June 2019); Tergus Pharma, a Raleigh, NC-based contract development and manufacturing business for topical dermatology pharmaceuticals (June 2019); and Bionova Scientific, a Fremont, CA-based biologics contract development and manufacturing organization (June 2019).

Great Point’s first fund was raised in September 2006 with $156 million of capital and its second fund followed in December 2013 with $215 million of capital. Great Point was founded in 2003 and is headquartered in Greenwich, CT (www.gppfunds.com).

Morrison Cohen provided legal services to Great Point for this fundraise.

© 2019 Private Equity Professional | August 14, 2019