Archives for August 20, 2019

Blue Point Acquires VRC

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Blue Point Capital Partners has acquired VRC Holdings, a maker of rubber, plastic and sealing components, from Corporate Group.

VRC designs and manufactures a variety of products including seals, wiring grommets, tubing and molded thermoplastics that are used in the aerospace & defense, automotive, industrial, oil & gas, marine and medical end markets.

VRC operates through three subsidiaries: Ritus (based in Milwaukee) and its sister companies Vanseal (based near St. Louis in Vandalia, IL) and Classic Molding (based near Chicago in Schiller Park, IL). VRC was founded in 1963 and is headquartered in Milwaukee (www.ritus.com) (www.vansealcorp.com) (www.classic-molding.com).

“I am confident that our partnership with Blue Point will offer VRC both the capital and management expertise to help sustain our recent success and support our future growth initiatives, particularly in developing enhanced technical development capabilities, a stronger commercial presence and in pursuing acquisition opportunities in our fragmented industry space,” said Tom Gebhardt, the president of VRC.

“We are impressed with the quality and capacity of VRC’s current asset base and believe the company operates in an attractive niche of the industrial rubber and plastic component markets. We are grateful to have the opportunity to partner with Bill and Tom Gebhardt and support VRC in the next stage of its growth and evolution,” said John LeMay, a partner with Blue Point.

The buy of VRC is the fifth platform investment for Blue Point’s fourth fund, Blue Point Capital Partners IV LP, which closed at its hard cap of $700 million in January 2018. 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 has invested in the elastomeric components market before through Quality Synthetic Rubber (QSR), a Twinsburg, OH-based maker of molded silicon rubber components used by electrical connector suppliers in the automotive, medical, transportation and industrial markets. Blue Point acquired QSR in July 2007 and sold the company in July 2012 to Lexington Precision, then a portfolio company of Industrial Growth Partners.

“Over the last five decades, VRC has continually looked for ways to expand its platform and add value for their customers. Blue Point has partnered with over 25 custom material manufacturers over the years and is positioned to support management in identifying the most attractive paths for growth and building additional internal capabilities to execute against the core growth strategies,” said Jonathan Pressnell, a principal with Blue Point.

Corporate Group, the seller of VRC, is a Milwaukee-based private equity firm that invests from $2 million to $20 million in US-based companies that have annual revenues up to $50 million and are active in engineered products and value-added construction services (www.corporategroupinc.com).

© 2019 Private Equity Professional | August 20, 2019

LaSalle Buys Another AR Management Company

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LaSalle Capital has made an investment in Professional Recovery Consultants (PRC), a provider of accounts receivable management services.

Customers of PRC include hospitals and physician groups and other companies that are active in the healthcare industry as well as governments, utilities, and retailers. The company, led by President Geoff Miller, was founded in 1979 and is based in Durham, NC (www.prorecoveryinc.com).

“We are extremely pleased to have LaSalle Capital lead the next chapter of growth for Professional Recovery Consultants,” said Mr. Miller. “LaSalle is the perfect partner to help expand the business to meet the ever-changing needs of our customers and to advance the innovative solutions that our customers depend on. They have an in-depth understanding of collections businesses, supported by their previous investments in Receivables Management Partners and Brown & Joseph.”

LaSalle Capital sold Itasca, IL-based Brown & Joseph, a provider of commercial accounts receivable management services, to Incline Equity Partners in June 2019; and from 2007 to 2012 LaSalle owned Receivables Management Partners, a Greensburg, IN-based provider of accounts receivable management services specializing in the healthcare industry.

“The team at PRC has built an impressive business and achieved substantial organic growth,” said Ryan Anthony, a partner at LaSalle Capital. “We look forward to working with the team to help accelerate the expansion of the business through investments in people and technology as well as strategic add-on acquisitions.”

LaSalle Capital makes control investments of $10 million to $20 million in companies with revenues from $20 million to $100 million and EBITDA greater than $3 million. Sectors of specific interest include food and beverage, and technology-enabled business services. LaSalle Capital is based in Chicago (www.lasallecapitalgroup.com).

© 2019 Private Equity Professional | August 20, 2019

Riverside Loves Fire Safety

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The Riverside Company has acquired Performance Systems Integration (PSI), a provider of fire and life safety services, from Peterson Partners.

PSI’s services include system inspection, service and monitoring, equipment sales, and cylinder repairs as well as installations for new construction and retrofits. The company’s customers include hospitals, assisted living facilities, commercial and industrial buildings, schools, and hotels.

PSI operates in partnership with Fire King, a provider of fire extinguisher sales and services, cylinder requalification and maintenance services. The company, founded in 2002 and led by CEO Travis Everton, is headquartered in Portland, OR with an additional office near Seattle in Bothell, WA (www.psintegrated.com).

“Fire and life safety services are critical to any region, and we are thrilled to partner with the PSI team to help extend their geographic reach,” said Loren Schlachet, a managing partner at Riverside. “During our partnership, we plan to round out the platform with strategic add-ons, create a technician training academy and expand upon PSI’s sales and marketing efforts.”

The buy of PSI is the second fire and life safety platform Riverside has acquired in the past three months. In June 2019 the firm purchased CertaSite, an Indianapolis-based provider of fire and life safety services (www.certasiteprotected.com).

“The market for fire and life safety businesses continues to be attractive, and we’re looking for interested sellers,” said John McKernan, a principal at Riverside. “We are specifically looking for full-service fire protection companies with strong technicians, specializing in the inspection, repair and monitoring of fire and life safety equipment.”

Working with Mr. Schlachet and Mr. McKernan on the transaction were Operating Partner Ervin Cash, Finance Director Bart Thielen, and Senior Associate Liz Burke. Partner Joe Lee sourced the transaction for Riverside.

The Riverside Company 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 (www.riversidecompany.com).

Peterson Partners invests from $5 million to $25 million in companies with revenues from $5 million to $100 million and EBITDA from $2 million to $20 million. Sectors of interest include business services, consumer products, software, healthcare, retail, and financial services. The firm is currently investing through its eighth fund and is based in Salt Lake City, UT (www.petersonpartners.com).

© 2019 Private Equity Professional | August 20, 2019

Argonaut Hits Hard Cap

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Argonaut Private Equity has held a final closing of Argonaut Private Equity Fund IV LP at its hard cap of $400 million.

Tulsa-based Argonaut invests in companies that are active in the energy services, manufacturing and industrial sectors. The firm was founded in 2002 and over its history has invested more than $3 billion of capital in more than 100 direct investments (www.argonautpe.com).

Limited partners in the new fund include pension funds, endowments, financial institutions and family offices from both the United States and abroad. “This fund is the next chapter in a legacy of identifying unique opportunities across historically underserved regions and creating long-term value for our partners and investors,” said Kelby Hagar, the president of Argonaut.

Argonaut held a first close for the new fund in August 2018 with $230 million of commitments and has already invested in four portfolio companies and deployed over $120 million of its equity capital.

“Since holding our first close last year, Argonaut has made investments in multiple platform companies across our target sectors and continues to seek out highly capable management teams wanting to partner and execute on growth initiatives,” said Steve Mitchell, CEO and managing director of Argonaut.

The most recent acquisition by Argonaut was the buy of Houston-based Mammoth Carbon Products, a distributor of carbon steel pipe in Texas and Colorado (www.mammothcarbon.com).

Argonaut’s prior fund, Argonaut Private Equity Fund III LP, closed with $600 million of capital commitments in July 2016.

© 2019 Private Equity Professional | August 20, 2019