December 6, 2019
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Archives for December 6, 2019

Wind Point Invests in Tropicale Foods

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Wind Point Partners has acquired Tropicale Foods, a manufacturer of frozen novelty products under the Helados Mexico brand.

Tropicale Foods’ products include a range of traditional Hispanic offerings, including paletas (ice pops), bolis (ice creams) and mangonada cups (fruit drinks), which are sold in a variety of flavors and pack sizes. The company’s products are sold nationwide at multi-outlet retailers, convenience stores and traditional grocery outlets.

Tropicale was founded in 1999 by Ruben and Guadalupe Gutierrez and is headquartered near Los Angeles in Ontario, California.

Windpoint is partnering on this transaction with José Luis Prado, who most recently served as CEO of Evans Food Group, a manufacturer of branded and private label pork rind snacks which Wind Point sold in August 2019 to Benestar Brands, a food platform formed by Highlander Partners. Mr. Prado is the former president of Quaker Oats North America, a division of PepsiCo, and will join Tropicale Foods as its chairman.

“Tropicale is a terrific business with a leading Hispanic brand.  I see significant opportunity to continue building the Helados Mexico brand through great tasting new products, innovation and geographic expansion,” said Mr. Prado. “I look forward to drawing on my experience as CEO of Evans Food Group and my 30 years in consumer packaged goods to help Tropicale flourish in this next phase.”

“Tropicale represents a great fit for Wind Point,” said Joe Lawler, a principal at Wind Point. “The founders have built a terrific business with great momentum and we look forward to their continued support in growing Tropicale in this next phase.  We are also excited to partner with José Luis and the entire Tropicale team.  We have a strong value creation plan that includes delivering on commitments to our customers, continuing to support growth and exploring avenues to enhance the company’s portfolio of products.”

Chicago-based Wind Point invests from $50 million to $100 million in companies with EBITDAs of at least $10 million. Industries of interest include business services, consumer products and industrial products. Wind Point is currently investing out of Wind Point Partners IX LP which began fundraising in 2019.

FocalPoint Partners provided transaction advisory services to Tropicale in connection with the transaction.

© 2019 Private Equity Professional | December 6, 2019

Brentwood Buys Chicken Salad Chick

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Brentwood Associates has acquired a majority interest in Chicken Salad Chick from Eagle Merchant Partners.

Auburn, Georgia-based Chicken Salad Chick is a fast-casual restaurant franchisor that sells 15 different flavors of chicken salad, as well as delicatessen-style sandwiches, side dishes, salads and desserts. The company has 137 locations – approximately 20% are company-owned – in 16 states predominantly in the Southeastern US and provides dine-in, take-out, drive-thru and catering options.

Chicken Salad Chick was founded in 2008 by Stacy and Kevin Brown and began franchising in 2012. Eagle Merchant Partners acquired the company in 2015 when it had 32 locations in six southeastern states.

“We are extremely proud of Chicken Salad Chick’s achievements during our ownership, which resulted in a seven-fold increase in system sales and over 100 new restaurants,” said Stockton Croft, a partner at Eagle Merchant. “Chicken Salad Chick is a truly differentiated company with tremendous growth ahead.  It has been an honor to work with such a wonderful organization.”

Chicken Salad Chick is led by CEO Scott Deviney, who will continue to lead the business in partnership with Brentwood. “We are very excited to partner with Brentwood on the next chapter for Chicken Salad Chick,” said Mr. Deviney. “Brentwood’s long track record of working with leading restaurant companies coupled with their understanding of our business objectives and strategy make them the perfect partner for us to continue executing on our robust growth and expansion plan.”

Los Angeles-based Brentwood invests from $20 million to $200 million of equity in consumer products and services companies that have revenues of $20 million to $500 million and EBITDA of up to $50 million. Since 1984, Brentwood’s private equity team has invested in more than 50 portfolio companies with an aggregate transaction value of over $6 billion. Brentwood is led by its partners Bill Barnum, Roger Goddu, Steve Moore, Eric Reiter and Rahul Aggarwal.

The restaurant sector is not new for Brentwood. The firm has made seven prior restaurant investments including Lazy Dog Restaurants, Pacific Catch, Veggie Grill, Blaze Pizza, Zoe’s Kitchen, K-Mac (a franchisee of Taco Bell, KFC and Golden Corral), and Pacific Island Restaurants (a franchisee of Taco Bell and Pizza Hut).

“Chicken Salad Chick’s model fits well within our strategy of investing in high-growth, best-in-class consumer businesses,” said Mr. Aggarwal. “We look forward to working with Scott and the Chicken Salad Chick team to build upon their success in the markets they serve.”

Brentwood closed its current fund, Brentwood Associates Private Equity VI LP (and parallel funds) with total capital commitments of $1.15 billion in July 2017.

Atlanta-based Eagle Merchant Partners, the seller of Chicken Salad Chick, invests from $10 million to $75 million of equity in middle-market companies that are active in the consumer, business services, manufacturing and industrial services sectors. The firm was founded in September 2013 by ex-Arcapita professionals Stockton Croft, Ransom James, Bill Lundstrom, and Andrew Hirsekorn.

San Francisco-based North Point Advisors was the financial advisor to Chicken Salad Chick on this transaction.

© 2019 Private Equity Professional | December 6, 2019

CORE Adds ICOMold to MCT

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Midwest Composite Technologies, a portfolio company of CORE Industrial Partners, has acquired ICOMold.

ICOMold is a custom plastic injection molder and a provider of CNC machining to customers that are active in the medical, consumer, industrial, electronics and transportation sectors.

ICOMold’s primary manufacturing capabilities are complemented by a range of value-added secondary processes including ultrasonic welding, hot plate welding, heat pressing, pad printing and silk screening.  The company is headquartered near Toledo in Holland, Ohio, with a second facility in Shenzhen, China.

CORE acquired Midwest Composite Technologies (MCT) in September 2018. MCT is a provider of 3D prototyping and low-volume production services. The company’s technical capabilities include laser sintering, poly-jet printing, stereolithography, fused deposition modeling, multi-jet fusion technologies, CNC machining, injection molding and industrial design. Customers of MCT are active in the medical, aerospace, research & development, consumer and industrial end markets. The company, led by CEO Ryan Martin, was founded in 1984 and is headquartered in Hartland, Wisconsin.

With the buy of ICOMold closed, MCT now has 185,000 square feet of manufacturing capacity across five facilities in Wisconsin, California, Washington, Ohio and China. The acquisition of ICOMold follows MCT’s September purchase of FATHOM, a provider of rapid prototyping and low- to high-volume production services of parts used in the consumer products, electronics, medical, automotive, aerospace, sporting goods, and product design sectors.

“Our acquisitions of both ICOMold and FATHOM are representative examples of our desire to complete highly strategic add-on acquisitions to augment the commercial and operational capabilities of the broader MCT business,” said John May, managing partner of CORE. “The addition of ICOMold strengthens our Industry 4.0 platform from a variety of perspectives, most notably the opportunity to leverage the company’s proprietary technology to accelerate growth.”

Industry 4.0 refers to the current trend of automation and data exchange in manufacturing technologies. The goal of Industry 4.0 is the creation of “smart factories” that utilize cyber-physical systems, the Internet of things, cloud computing and cognitive computing. Industry 4.0 is commonly referred to as the fourth industrial revolution.

“We are confident that both the financial and operational synergies generated from these strategic acquisitions will help create what we believe to be one of the largest privately-held on-demand digital additive manufacturing companies that combines 3D printing and traditional technologies in North America,” added Mr. May.

CORE makes control investments in companies that have revenues of up to $200 million, EBITDA of up to $20 million, and enterprise values up to $150 million. Sectors of interest include a range of specialty verticals within the manufacturing and industrial technology sectors. In February 2019, the firm held a final close of CORE Industrial Partners Fund I LP with total commitments of $230 million. The new fund was significantly oversubscribed with demand in excess of the initial target of $200 million and initial hard cap of $225 million. CORE was founded in 2017 and is headquartered in Chicago.

Stifel Global Technology Group was the financial advisor to ICOMold on this transaction.

© 2019 Private Equity Professional | December 6, 2019

H.I.G. Expands Leadership Team

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H.I.G. Capital has expanded its leadership team with the promotion of Rick Rosen and Brian Schwartz to Co-President, a newly created title.

Messrs. Rosen and Schwartz currently manage the H.I.G. U.S. Middle Market Fund and the H.I.G. Advantage Fund, respectively, and will work closely with Sami Mnaymneh and Tony Tamer, founders and co-CEOs of H.I.G., who will continue leading the firm in their current roles. Mr. Rosen joined H.I.G. in 1998 and Mr. Schwartz joined the firm in 1994.

H.I.G. also announced that Executive Managing Director Doug Berman has been promoted to the position of Head of U.S. Private Equity. He has been at H.I.G. since 1995 and is the head of the H.I.G. U.S. LBO Fund; John Bolduc, Executive Managing Director, will continue overseeing H.I.G.’s credit funds; and Wolfgang Biedermann has been promoted to Executive Managing Director and Head of European buyouts.

“This is an exciting and energizing development for H.I.G., and a logical step for us in the long-term leadership planning for the firm,” said Messrs. Mnaymneh and Tamer in a released statement. “We have never been more excited about the firm’s prospects than we are today. We have built a unique global platform with a very differentiated and scalable position, and we look forward to working with Rick, Brian, Doug, John and Wolfgang to further grow the firm and its capabilities.”

H.I.G. specializes in providing debt and equity capital to small and medium-sized companies and invests in management buyouts, recapitalizations and corporate carve-outs of both profitable as well as underperforming manufacturing and service businesses.

Last month, H.I.G. held a final and above target close of H.I.G. Middle Market LBO Fund III LP with $3.1 billion of capital commitments. H.I.G.’s earlier mid-market fund, H.I.G. Middle Market LBO Fund II LP, closed at its hard cap of $1.75 billion in February 2014. With the closing of this new fund, H.I.G. has more than $30 billion of capital under management.

H.I.G. was founded in 1993 and is headquartered in Miami with 15 additional offices across the US, Europe, and South America.

© 2019 Private Equity Professional | December 6, 2019

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