Archives for 2019

May River Closes Sophomore Fund

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Following a short three-month fundraising process, May River Capital has held a final on-target closing of its second fund, May River Capital Fund II LP, with $300 million of limited partner capital commitments. The demand for the new fund substantially exceeded its target size.

Limited partners in the new fund include university endowments, insurance companies, charitable foundations, fund-of-funds, family offices and high-net-worth individuals.

“We are thankful for the strong support of our investors and are excited to continue our strategy of investing in high-caliber, lower middle-market, industrial growth businesses,” said Chip Grace, a partner at May River.

May River’s founding partners, Chip Grace, Steve Griesemer and Dan Barlow, along with the firm’s Executive Resource Group, made significant capital commitments to the new fund. The Executive Resource Group is a collection of nine experienced senior executives who work with the investment team at May River to evaluate industry trends, specific businesses, talent management, and growth strategies for the firm’s portfolio companies.

“We are pleased with the reception we received from such a well-respected group of new and existing institutional investors and look forward to continuing those relationships,” said Steve Griesemer, a partner at May River.

The new fund will continue May River’s focus on investing from $15 million to $40 million of equity in companies with enterprise values of $15 million to $75 million. Sectors of interest include precision manufacturing, engineered products, specialized industrial services, and value-added industrial distribution services.

May River was founded in February 2012 and closed its inaugural fund, May River Fund I LP, in March 2017 with total commitments of $170 million. Since founding, May River has closed and managed seven investment platforms as well as ten add-on acquisitions.

In August 2019, the firm closed the sale of two platform companies: GCM, a maker of metal, ceramic and plastic components, was sold to Avista Capital Partners (May River acquired GCM – then Hi-Tech Manufacturing – in July 2012 from Longview Capital Partners); and Pride Engineering, a maker of tooling, equipment, and aftermarket parts used in the aluminum beverage packaging sector, to Arcline Investment Management (May River acquired Pride Engineering in March 2014).

“We are fortunate to have a skillful and dedicated team behind us and look forward to partnering with talented executives throughout Fund II,” said Dan Barlow, a partner at May River.

White Plains, New York-based M2O Private Fund Advisors was the placement agent for this fundraise and Winston & Strawn provided legal services.

© 2019 Private Equity Professional | December 10, 2019

 

Parthenon Beats Target

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Parthenon Capital has held a first and final closing of Parthenon Investors VI LP, with more than $2 billion in commitments. The original target for the new fund was $1.5 billion.

“We appreciate the rapid and significant support we received from existing limited partners and welcome an outstanding group of new investors to the Parthenon family,” said Brian Golson, managing partner and co-chief executive officer.

Parthenon invests in companies with enterprise values of $35 million to $500 million that are active in healthcare services, financial services, and business services. The firm was founded in 1998 and has offices in Boston, San Francisco, and Austin.

“We continue to be excited by the opportunity to build franchise companies in our target sectors and look forward to growing our firm and deploying our strategy in the coming years,” said Dave Ament, managing partner and co-chief executive officer.

Ropes & Gray provided legal services to Parthenon Fund VI LP and Kirkland & Ellis provided legal services to Parthenon Capital.

Parthenon Capital did not use a placement agent for this fundraising.

© 2019 Private Equity Professional | December 10, 2019

LNC Closes $300 Million Fund II

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LNC Partners has held a final hard-cap closing of its second investment fund, LNC Partners II – SBIC LP (LNC II) with total commitments, including leverage, of $300 million.

LNC II was oversubscribed and received support from both existing and new investors, including financial institutions, fund of funds, university endowments, family offices, and high net worth individuals.

“We credit LNC’s success to our experienced investment team and we are thankful for the strong support and commitment we received from our investors,” said Mark Raterman, co-founder and managing partner of LNC Partners.

LNC invests in at least $10 million of capital in companies that have at least $5 million of revenue and $2 million to $10 million of EBITDA. Sectors of interest include business and information services; financial and insurance services; healthcare services; and niche manufacturing and distribution.

The new fund has already completed a minority investment in Prime Capital Investment Advisors, an Overland Park, Kansas-based provider of wealth management and retirement plan advisory services with more than $11 billion in client assets under management. LNC’s investment in Prime Capital closed in October 2019.

Weston, Virginia-based LNC was founded in 2011 by its managing partners Mark Raterman, Matt Kelty, and Robert Monk.

© 2019 Private Equity Professional | December 10, 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