Abacus Backs Five Points’ New Buy

Abacus Finance Group was the administrative agent and lead arranger for $15 million in senior secured credit facilities to support the recapitalization of Specialty Appliances by Five Points Capital. Abacus also made an equity co-investment in Specialty Appliances.

Specialty Appliances is a designer and manufacturer of more than 100 types of customized orthodontic appliances.

The company’s principal product lines are Herbst appliances, used most often to correct overbites in growing children; Digital Indirect Bonding Services, which increase an orthodontist’s accuracy when applying traditional braces; Clear Image Aligners, used for easy-to-moderate orthodontic corrections; and a range of other customized fixed metal, fixed expansion, and molar distalization appliances (used to move molars). Specialty Appliances was founded in 1981 by CEO Scott Huge and is headquartered northeast of Atlanta in Cumming, Georgia.

“This was our first transaction with Abacus, and we were impressed how smoothly, efficiently, and on time the whole process went,” said Marshall White, a partner at Five Points.

Abacus Finance provides cash flow-based senior financing to private equity and family office-sponsored, lower-middle market companies that have EBITDA between $3 million and $15 million. Debt facilities can be as large as $50 million with a typical hold size ranging from $10 million to $40 million

“Although, as Marshall noted, it was our initial transaction with Five Points, we have known members of the firm for many years. As I expected, they proved to be an excellent partner and easy to work with,” said Tim Clifford, president and CEO of Abacus. Other Abacus team members involved in the buy of Specialty Appliances included Director Eric Petersen and Analyst Austin Rendell.

“Five Points’ level of due diligence was impressive and made our underwriting and documentation flow smoothly,” said Mr. Petersen, “and were able to act quickly – an important aspect of being able to Count on Us™ thanks to our Total Partnership Approach™.” The firm’s Total Partnership Approach refers its focus on relationships not just transactions and includes its cash-flow financing expertise, deep industry knowledge, and a commitment to exceptional client service, including swift response times, over the lifecycle of each investment.

Five Points Capital (formerly known as BB&T Capital Partners) invests from $5 million to $25 million of equity and subordinated debt in lower middle market companies that have EBITDA of $3 million or greater. The firm’s transaction types include buyout, acquisition, growth, and recapitalization transactions as a control investor on a standalone basis, or as a co-investor with other financial sponsors.  Sectors of interest include business, healthcare and industrial services; niche manufacturing; and value-added distribution. Five Points is headquartered in Winston-Salem, North Carolina.

“The Abacus team was responsive, flexible, easy to work with, and knew the company,” added Steele Windle, a vice president at Five Points.

Since its founding in June 2011, Abacus has closed over $2 billion in financings. The firm is headquartered in New York and is an affiliate of New York Private Bank & Trust.

© 2020 Private Equity Professional | January 15, 2020

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