Archives for October 2, 2019

Wynnchurch Stays Busy with EMS Buy

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Wynnchurch Capital has acquired Eastern Metal Supply, a distributor of aluminum extrusions and related products.

Eastern’s aluminum extrusions are sold into the industrial, commercial, residential, and marine end markets and are used in a variety of applications. The company was founded in 1982 and now has fourteen distribution centers and manufacturing facilities that total nearly 1.5 million square feet under roof.

The company is led by Greg Weekes, president and co-founder, and has 800 employees with a headquarters near West Palm Beach in Lake Worth, FL (www.easternmetal.com).

“We have built and grown Eastern by providing our customers with exceptional service, just-in-time delivery and a wide breadth of value-added products,” said Mr. Weekes. “Wynnchurch shares this commitment and we are excited to partner with them as we continue that mission and pursue our next phase of growth.”

“For nearly 20 years, a core part of our strategy at Wynnchurch has been investing in founder-led companies.  We are very fortunate to be able to continue this with our investment in Eastern and partnership with Greg,” said Chris O’Brien, a managing partner at Wynnchurch.

Wynnchurch has been an active acquirer in 2019 and is investing from its $1.3 billion fourth fund which closed in November 2014. In June, the firm acquired MPL Company, a Fairland, IN-based build-to-order manufacturer of cultured marble bath products including panels, surrounds, shower pans, and other accessories. Cultured marble is a blend of stone particles, resins, and pigments that is cast in molds to produce specific forms in a range of colors and natural-looking patterns.

Just two weeks before closing on MPL, Wynnchurch acquired two closed-die forging facilities from publicly traded Allegheny Technologies for $37 million in cash. The acquired closed-die operations are in Portland, IN and Lebanon, KY and produce carbon and alloy steel forged products for blue-chip OEMs primarily in the oil and gas, transportation, construction, and mining industries. In April, the firm acquired Alliance Designer Products, a Mirabel, QC-based manufacturer of polymeric sand and other products that are used in residential and commercial hardscaping projects; and in February, Wynnchurch acquired Boss Industries, a LaPorte, IN-based maker of power take-off (PTO) rotary screw air compressor systems that are used to power tools that need constant air pressure (e.g., jackhammers) and tools that require intermittent air pressure (e.g., wrenches and drills).

Wynnchurch makes investments in middle-market companies that have revenues of $50 million to $1 billion. Sectors of interest include aerospace & defense, automotive, building products, chemicals, food, logistics, energy services & equipment, environmental services, industrial products & services, metals & mining, and paper & packaging. Wynnchurch was founded in 1999 and is headquartered in the Chicago suburb of Rosemont with additional offices in Los Angeles (El Segundo), and Toronto (www.wynnchurch.com).

© 2019 Private Equity Professional | October 2, 2019

Pfingsten Sells MPE to BPOC

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Pfingsten Partners has sold Midwest Products and Engineering (MPE) to Beecken Petty O’Keefe & Company (BPOC).

MPE is a medium volume contract manufacturer of mobile and stationary carts, consoles, tables, and assemblies that are sold primarily to healthcare and technology OEMs.  The company, led by CEO Hank Kohl, was founded in 1978 and is headquartered in Milwaukee (www.mpe-inc.com).

Pfingsten acquired MPE in June 2011 through its $525 million fourth fund. “Pfingsten’s conservative capital structure allowed us to make significant investments in manufacturing technologies, new product development and key management personnel to execute on our strategy,” said Mr. Kohl. “We are excited to partner with a healthcare-focused private equity firm like BPOC as we embark on our next phase of growth.”

Beecken Petty O’Keefe & Company (BPOC) invests in middle-market buy-out transactions, recapitalizations, and growth platforms in the health care industry.  Typical targets will have EBITDAs from $5 million to $50 million and enterprise values from $50 million to $500 million. The firm is currently investing out of its fourth fund, Beecken Petty O’Keefe & Company Fund IV LP, which closed in 2013 with $500 million of capital. BPOC was founded in 1996 and is headquartered in Chicago (www.bpoc.com).

“MPE is proud to be a premier partner to many of the nation’s largest medical device and technology OEMs,” added Mr. Kohl, who will continue to lead the company under BPOC ownership. “BPOC’s experience in contract manufacturing and the broader healthcare industry is well aligned with our business model and strategy and will allow us to better serve our customers while continuing our rapid growth.”

“The MPE team did a tremendous job accelerating the company’s growth during our ownership period,” said Phillip Bronsteatter, a Pfingsten managing director. “Their experienced team and laser focus on driving customer value were key to this successful investment.”

Pfingsten invests in middle-market manufacturing, distribution and business services companies that have transaction values ranging from $15 million to $100 million, revenues from $20 million to $150 million, and EBITDA between $3 million and $12 million. Since completing its first investment in 1991, Pfingsten has acquired 138 such companies through five funds with total commitments of $1.3 billion. The firm is based in Chicago with representative offices in India and China (www.pfingsten.com).

“MPE is a market leader with best-in-class product development, manufacturing operations and technical services.  We are excited to partner with MPE’s management team to support the company and its long-term growth initiatives,” added Dave Cooney, a partner at BPOC.

Cowen and Company was the financial advisor to MPE on this transaction and Paul Hastings provided legal services.

© 2019 Private Equity Professional | October 2, 2019

Paine Schwartz Closes its Largest Fund

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Paine Schwartz Partners has held a final closing of Paine Schwartz Food Chain Fund V LP with just over $1.4 billion of capital commitments.

Fund V, which closed above target and at its hard cap, is the largest fund that Paine Schwartz has ever raised and counts as limited partners institutions from the US, Canada, Europe, Middle East and Asia.

“We are excited about the successful closing of Fund V,” said Kevin Schwartz, CEO of Paine Schwartz. “This was truly a global capital raising effort, with participation from new and existing limited partners around the world.”

Paine Schwartz was founded in 2006 by Dexter Paine and Mr. Schwartz and provides equity to food and agribusiness companies for management buyouts, going-private transactions, expansion and growth programs.

“We have seen an increasing number of institutional investors focused on the food and agribusiness opportunity set, along with the need for sustainability, which is synergistic with driving positive investment outcomes in this sector,” added Mr. Schwartz. “We have built a leadership position and successful track record in this area over two decades, and look forward to continuing that execution with Fund V.”

Paine Schwartz has offices in New York City and San Mateo, CA (www.paineschwartz.com). The firm’s earlier fund, Paine Schwartz Food Chain Fund IV LP, closed in January 2015 with $893 million of capital.

© 2019 Private Equity Professional | October 2, 2019

HKW Closes Fifth Fund

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Hammond, Kennedy, Whitney & Company (HKW) has held a final close of HKW Capital Partners V LP (HKW V) with total commitments of $365 million.

Fundraising for HKW V began in September 2017 and it closed above its $350 million target. Limited partners in the new fund include institutional investors, insurance companies, state pension plans, family offices, high net worth individuals, foundations and endowments.

“We thank the many investors who have put their trust in HKW to continue meeting their high expectations,” said Ted Kramer, president and CEO at HKW. “In particular, having previous investors continue supporting our partnership is an important validation of our strategy and approach.”

HKW invests in companies with revenues between $20 million and $200 million and EBITDAs between $5 million and $30 million. Sectors of interest include business services, health and wellness, and infrastructure services and products.

“HKW V will be a continuation of our efforts to identify outstanding businesses with meaningful growth potential, led by talented and partnership-oriented management teams,” added Jim Snyder, a partner at HKW. “Seeking to ensure that the interests of all parties are aligned from the start allows us to focus on the best possible outcome for the company, our investors, and for HKW.”

To date, HKW has completed five investments for HKW V: Fresh Direct Produce, a Vancouver, BC-based distributor of fresh, ethnic, tropical, organic, and specialty produce (December 2018); Urban Armor Gear, a Laguna Niguel, CA-based designer and manufacturer of protective cases for mobile phones, laptops, and tablets (August 2018); Indigo Wild, a Kansas City, MO-based manufacturer and distributor of bath, skin, home, and cleaning products (August 2018); Certified Tracking Solutions, an Edmonton, AB-based provider of telematics used in fleet management applications (June 2018); and GCR, a New Orleans, LA-based public sector software development and consulting firm (December 2017).

Since 1982, HKW has completed 60 platform management buyouts of middle-market companies throughout North America as well as 66 add-on acquisitions. The firm was founded in 1903 and is headquartered in Indianapolis with an additional office in New York (www.hkwinc.com).

Thomas Capital Group was the placement agent for this fundraise and Kirkland & Ellis provided legal services.

HKW V follows HKW Capital Partners IV LP which had a final closing in April 2014 with $319 million in capital.

© 2019 Private Equity Professional | October 2, 2019