Archives for December 9, 2019

Hudson Ferry Carves Dake from JSJ

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Laguna Tools, a portfolio company of Hudson Ferry Capital, has acquired Dake Corporation from JSJ Corporation.

Dake is a manufacturer of presses, bandsaws and other machine tools used in the metalworking industry. The company was founded in 1887 and is based in Grand Haven, Michigan. The company was acquired by JSJ in 1940.

Irvine, California-based Laguna Tools manufactures wood, plastic and metalworking CNC machinery which the company sells directly to is customers. The company also sells band saws, table saws, edge banders, lathes, dust collectors and other woodworking equipment to retailers including Woodcraft and Rockler Woodworking. Laguna Tools was founded in 1983 by Torben Helshoj and today is led by CEO Stephen Stoppenbrink.

“We are thrilled to add a company with Dake’s pedigree to the Laguna Tools portfolio,” said Mr. Stoppenbrink. “From its craftsmanship to its culture, we believe Dake is an excellent addition to our company and further demonstration of our commitment to continued investment in our industry-leading product lineup.”

“Dake has a great brand and product line that instantly bolsters Laguna’s presence in the metalworking industry.  We look forward to building off Dake’s success as Laguna continues to expand in metalworking,” said Bruce Robertson, a partner at Hudson Ferry.

The buy of Dake is the second add-acquisition for Laguna since being acquired by Hudson Ferry in March 2016. In September 2017, Laguna Tools acquired St. Joseph Tools (DBA SuperMax Tools) from its owner Bill Schroeder. SuperMax is a St. Paul, Minnesota-based maker of drum, brush and combination sanders that are used in the woodworking and metalworking industries. The company also sells accessory products such as dust collectors, abrasives and brushes.

JSJ Corporation, the seller of Dake, is a privately held, Grand Haven, Michigan-based manufacturing company that was founded in 1919 by Alvin Jacobson, B.P. Sherwood, and Paul Johnson. Today the company is led by its Chairman and CEO Nelson Jacobson (grandson of Alvin Jacobson).

With the sale of Dake, the remaining operating businesses of JSJ include GHSP, a Grand Haven, Michigan-based supplier of mechanical and electromechanical systems to the automotive, transportation, and appliance industries (founded by JSJ in 1924); Hudson Technologies, an Ormond Beach, Florida-based maker of stainless steel and titanium metal cases and diaphragms used in the medical, aviation, aerospace and defense, semiconductor, and commercial industries (acquired in 1984); McLoone, a La Crosse, Wisconsin-based manufacturer of metal and polycarbonate labels, decals, and nameplates (acquired in 1980); and Sparks Belting, a Grand Rapids, Michigan-based conveyor belt fabricator and motorized pulley manufacturer and distributor (acquired in 1982).

Hudson Ferry invests in companies with enterprise values of $15 million to $50 million, revenues of $15 million to $75 million, and EBITDAs of $3 million to $8 million. Sectors of interest include niche manufacturers; business services providers; and outsourcing providers. Hudson Ferry was founded in 2007 and is based in Rye Brook, New York.

CIBC Bank USA provided senior debt financing to support this add-on acquisition. Grand Rapids-based Charter Capital Partners was the financial advisor to JSJ on this transaction.

© 2019 Private Equity Professional | December 9, 2019

Blue Point Buys Sixth Fund IV Platform

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Blue Point Capital Partners has acquired Mattco Forge, a maker of forged metal products used primarily for aerospace and defense applications.

Mattco’s products are made from nickel, titanium, aluminum, stainless and carbon steel, magnesium and other alloys and include hubs, shafts, gears, disks, bars, blocks, and seamless rolled rings. In addition to serving the aerospace and defense sector, Mattco’s products are also used in the oil and gas, transportation, and power generation industries. Mattco was founded in 1969 by Matt Minguez and is headquartered near Los Angeles in Paramount, California.

The buy of Mattco is the sixth 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.

“Our partnership with Blue Point will enable us to build upon our success to date,” said Rob Lewis, the president of Mattco. “The team is eager to benefit from a new, experienced partner while taking Mattco through its next stage of growth.”

Blue Point has made numerous investments in the aerospace and defense sector, and metals manufacturing space. These investments include Selmet, a manufacturer of titanium investment castings used in aerospace and defense applications. Blue Point acquired Selmet in 2011 and sold it to Consolidated Precision Products (CPP), a portfolio company of Warburg Pincus, in 2018. Blue Point maintains and equity interest in CPP.

“Blue Point sees a significant opportunity to grow the Mattco platform,” said Mark Morris, a partner at Blue Point. “Together with management and our extensive aerospace and defense operating resources, we hope to expand the company’s production capabilities, improve its supply chain management and enhance its business infrastructure, all while maintaining Mattco’s best-in-class track record of customer service and execution.”

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.

“Mattco has strategically positioned itself as a key supplier of forged metal products in the aerospace and defense industry. With a focus on innovative engineering, quality, continuous improvement and world-class customer support, Mattco has become the supplier of choice for industry leaders across the globe. Given our experience and resources, it’s a natural fit,” said Charley Geiger, a principal with Blue Point.

Twin Brook Capital Partners, the middle-market direct lending arm of Angelo Gordon, served as administrative agent on debt financing to support the buy of Mattco Forge by Blue Point.  Chicago-based Twin Brook focuses on loans to private equity-owned companies with EBITDA between $3 million and $50 million, with an emphasis on companies with $25 million of EBITDA and below. The firm targets senior financing opportunities up to $200 million, with hold sizes across the platform ranging from $25 million up to $150 million. Twin Brook’s products include opportunistic investments in second lien, mezzanine, and equity co-investments.

Lazard was the financial advisor to Mattco on this transaction.

© 2019 Private Equity Professional | December 9, 2019

Stellex Closes Second Grammer Add-On

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Grammer Industries, a portfolio company of Stellex Capital Management, has acquired LiMarCo Logistics.

Grammer is a provider of transportation and logistics services for specialty and hazardous chemicals including anhydrous ammonia, liquefied petroleum gases, carbon dioxide, and nitric acid. The company’s services include transportation, transloading, terminaling, and handling of chemicals and hazardous materials.

LiMarCo Logistics is a regional hauler of liquefied petroleum gas and natural gas liquids in Louisiana, Oklahoma, the upper Texas Gulf Coast, and West Texas regions. The company is headquartered in Houston and operates a terminal facility in Corpus Christi.

Included in the acquired assets are LiMarCo’s Corpus Christi facility, 26 tractors and 41 trailers, 15 independent contractor relationships, and roster of customers. LiMarCo’s Houston facility was not included in the transaction.

Grammer was founded in 1968 by Charles “Shorty” Whittington in Grammer, Indiana as an over-the-road transporter of grain and dry fertilizer serving the agricultural industry in Southeast Indiana. Today, the company is headquartered in Columbus, Indiana and has 20 facilities located near major chemical production hubs across the United States. Grammer’s operating equipment includes a fleet of 350 tractors and 850 specialty trailers that are operated by over 500 drivers and owner-operators that support more than 2,000 delivery points and over 500 customers.

“Both companies have commercial and operational synergies that make this a great fit,” said Bart Middleton, CEO of Grammer. “Grammer and LiMarCo share best-in-class safety and driver retention metrics, so we expect a smooth transition. This is a win-win for all involved.”

Stellex acquired Grammer from Linx Partners in October 2018 in partnership with Mill Rock Capital, the founding Whittington family, and management. The buy of LiMarCo follows Grammer’s April 2019 buy of Sterling Transport, a Vass, North Carolina-based transporter of hazardous and specialty chemicals and materials including propane, natural gas liquids, cement, fly ash, asphalt emulsions, sand, and salt.

Stellex is actively seeking additional add-on acquisitions to extends Grammer’s geographic reach and adding new products and services to its existing core business.

Stellex invests from $25 million to $100 million in United States or Europe-based companies with enterprise values from $50 million to $500 million and revenues greater than $100 million. Sectors of interest include manufacturing and basic industry; industrial and business services; defense, aerospace and government services; automotive; consumer products; and distribution and transportation. Stellex has offices in New York and London.

Mill Rock Capital invests in North American-based middle-market businesses that are active in chemicals, materials and packaging; industrial distribution; business services; metals; transportation and logistics; and specialty manufacturing. The firm is based in New York City.

FINNEA Group was the financial advisor to Grammer on this transaction.

© 2019 Private Equity Professional | December 9, 2019

Leonard Green Hits Hard Cap on Two New Funds

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Leonard Green & Partners has held final closings of the firm’s eighth private equity fund, Green Equity Investors VIII LP (GEI VIII), with $12 billion of capital; and its inaugural dedicated middle-market fund, Jade Equity Investors LP (Jade), with $2.75 billion of capital. Both funds were oversubscribed and closed at their hard caps.

Leonard Green & Partners (LGP) is led by 15 partners including Managing Partners John Danhakl and Jonathan Sokoloff, and Senior Partners John Baumer and Jonathan Seiffer. In aggregate, the partners of LGP committed a total of $750 million to GEI VIII and Jade.

Leonard Green & Partners invests in service companies operating in the consumer, business, healthcare, retail, distribution, and industrial sectors. The Los Angeles-based firm was founded in 1989. LGP’s earlier fund, Green Equity Investors VII LP, closed in June 2016 with $9.6 billion of capital.

Investors in the new funds include public and corporate pensions, sovereign wealth funds, insurance companies, endowments, foundations, family offices, and financial institutions.

“We are sincerely grateful to our longtime investors for their continued support and are pleased to welcome our new investors into the LGP community. Our investor base represents a diverse group of institutions and their constituents globally, with limited partners in GEI VIII and Jade spanning over 20 countries,” said Erika Spitzer, a partner at LGP who leads the firm’s capital raising and investor relations efforts.

LGP did not use a placement agent on either GEI VIII or Jade, and Gibson, Dunn & Crutcher provided legal services.

© 2019 Private Equity Professional | December 9, 2019