Archives for February 7, 2020

Audax Invests in Government Data Manager

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Audax Private Equity has acquired Kofile, a provider of document capture and management services to government agencies.

Kofile’s services include paper document restoration and preservation; physical and digital document access control for employees and citizens; paper document conversion to digital; digital document enhancement; and indexing (creating a database of information allowing users to search for and find required documents); cloud services; and information security. Kofile, with about 400 employees, was founded in 2009 by William “Sonny” Oates and is headquartered in Dallas.

According to the company, it is the largest provider of information management and access services to government agencies in the US. More than 50 percent of counties with over one million residents, including 75 percent of the country’s fastest-growing counties, are customers of Kofile.

“In Audax, we believe we have found the perfect investment partner to propel our future growth,” said Michael Crosno, CEO of Kofile. “Their interest in the public sector market, coupled with their experience and customer focus, has us very excited about the opportunities this partnership can bring to Kofile’s customer-centered commitment.”

“We are impressed by the business that Michael and his team have built over the years and are excited to invest behind them for the company’s next stage of growth,” said Tim Mack, a managing director at Audax. “We believe Kofile is well-positioned to continue expanding its high-quality suite of products and services for the public sector.”

Audax invests in middle-market companies that have from $8 million to $50 million in EBITDA and enterprise values of $50 million to $400 million. Sectors of interest include business and consumer services; energy; healthcare; technology, media and telecom; and industrials including chemicals, infrastructure, and building materials.

“Kofile’s reputation for quality and customer service is a testament to the company’s culture,” said Young Lee, a managing director at Audax. “We look forward to helping accelerate the growth of Kofile’s brand and product portfolio across a national footprint.”

Software-focused investment bank Shea & Company was the financial advisor to Kofile on this transaction. “The Shea & Company team exceeded our expectations at every step of the process,” said Mr. Crosno. “We partnered with Shea & Company because we view them as the leading experts in government software. This industry expertise, coupled with deep buyer relationships, excellent process execution, and their team’s dedication to our transaction helped us achieve an outcome that we are thrilled with, and best positions Kofile for future growth.”

Audax is currently investing out of its $3.5 billion sixth private equity fund. The firm has offices in Boston, New York, and San Francisco.

© 2020 Private Equity Professional | February 7, 2020

IOP Adds to Auto Aftermarket Platform

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Industrial Opportunity Partners (IOP) has added to its automotive aftermarket platform with the buy of Competition Cams, a maker of camshaft and valvetrain components.

Competition Cams (COMP Cams) is a manufacturer and distributor of automotive aftermarket products specializing in camshaft and valvetrain related components.

The company, led by its president Chris Douglas, is headquartered in Memphis with additional manufacturing and distribution locations in Olive Branch and Ashland, Mississippi; and Bronson, Michigan.

Competition Cams joins Edelbrock Corporation, a Torrance, California-based maker of specialty automotive and motorcycle parts, which IOP acquired in June 2010. The company products, sold under the Edelbrock and Russell brands, are used in numerous vehicle types, including early- and late-model performance cars, trucks and off-road, and Japanese domestic. Edelbrock is led by CEO Don Barry.

“The COMP Cams management team and I are looking forward to our partnership with IOP and Edelbrock,” said Mr. Douglas. “We believe IOP’s operations-focused approach will assist us in optimizing all aspects of our business to support continued growth and better serve the automotive aftermarket and racing communities.”

Phil Fioravante, an IOP operating principal, will assume the position of chairman of IOP’s automotive aftermarket platform.

The buy of COMP Cams is the sixth platform investment for IOP’s third fund, Industrial Opportunity Partners III LP, which closed in July 2017 with $450 million of committed capital. The five earlier Fund III portfolio companies are Midwest Paper (acquired in January 2020), a Wisconsin-based manufacturer of recycled containerboard and white paper for book publishing and printing/writing applications; United Poly Systems (acquired in June 2019), a Missouri-based manufacturer of made-to-order high-density polyethylene (HDPE) pipe; SignResource (acquired in July 2018), a Tennessee-based designer and manufacturer of exterior and interior signage for retail fuel/convenience store chains; Royston (acquired in March 2018), a Georgia-based designer, manufacturer and installer of check out and merchandising fixtures and equipment; and Creative Foam (acquired in October 2017), a Michigan-based manufacturer of die-cut, formed foam, nonwoven, and other components used in the automotive, medical, and wind energy markets.

IOP focuses on acquiring middle-market manufacturing and value-added distribution businesses, typically with revenues between $30 million and $400 million. The firm targets businesses with strong product, customer, and market positions and provides both management and operational resources to support sales growth and operational improvements. IOP is headquartered in the Chicago suburb of Evanston.

The buy of Competition Cams was backed by senior debt from PNC Bank and Freeport Financial Partners with subordinated debt financing provided by Norwest Mezzanine Partners.

© 2020 Private Equity Professional | February 7, 2020

Grant Avenue Carves Businesses from HCR ManorCare

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Grant Avenue Capital has formed H2 Health to acquire the Heartland Rehabilitation and MileStone businesses from HCR ManorCare.

Heartland Rehabilitation is a national provider of outpatient physical rehabilitation care services including physical, occupational, and speech therapies. The business has more than 60 outpatient facilities across seven states including in Florida, Pennsylvania, New Jersey, Kentucky, and Virginia.

MileStone provides per-diem, travel, and contract clinical staffing to healthcare providers and facilities throughout the country. The business has offices in Dallas, Pittsburgh, Harrisburg, Boca Raton and Nashville.

“HCR ManorCare has created leading, regional platforms in the outpatient rehab and caregiver staffing sectors,” said Buddy Gumina, founder and managing partner of Grant Avenue. “Looking forward, we will build upon the great foundation of H2 Health to expand the reach of the business and thereby provide world-class care to a broader base of patients. In addition, completing a complex transaction like H2 Health speaks to the operational and execution capabilities of Grant Avenue Capital.” Prior to founding Grant Avenue in 2019, Mr. Gumina founded and led the build-out of Apax Partners’ US healthcare buyout practice over the course of 20 years and across multiple economic cycles.

With the closing of the transaction, Grant Avenue has named Guy Sansone, the founding partner of Kiawah River Health Partners and a Grant Avenue advisory board member, as chairman and CEO of H2 Health. “H2 Health has a long track record of delivering outstanding care and improving the lives of patients,” said Mr. Sansone. “I look forward to working with our dedicated and patient-focused management team, clinicians, and employees to grow our breadth of services over the years to come.”

Grant Avenue is a healthcare-focused, middle-market private equity firm that invests in companies with $5 million to $25 million of EBITDA. Transaction types include control buyouts, buy-and-builds, corporate carve-outs, joint-control partnership investments and special situations.

Toledo, Ohio-based HCR ManorCare, a subsidiary of ProMedica, is a provider of both short-term post-acute and long-term care through skilled nursing and rehabilitation centers, assisted living facilities, outpatient rehabilitation clinics, and hospice and home health care offices. ProMedica is a non-profit health care system with locations in northwest Ohio and southeast Michigan.

© 2020 Private Equity Professional | February 7, 2020

One Rock Adds New Partner

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One Rock Capital Partners has hired Rohan Narayan as a new partner. Mr. Narayan joins One Rock from New York-based private equity firm Lindsay Goldberg.

Earlier in his career, Mr. Narayan was a vice president at Goldman Sachs in its merchant banking division, and as a vice president at Ripplewood Holdings. While at Ripplewood, Mr. Narayan worked alongside several One Rock investment professionals and operating partners, including One Rock’s founders and managing partners Tony Lee and Scott Spielvogel.

“Rohan is a seasoned and highly-respected private equity executive who brings a wealth of middle-market expertise to One Rock. Having known and worked with Rohan for many years, we are confident that his investment acumen and diligence will serve our firm and portfolio companies well,” said Mr. Lee.

“I have long admired Tony, Scott, and the rest of the One Rock team for their culture of collaboration and proven execution of complex transactions, and I am excited to join One Rock’s growing team of experienced professionals,” said Mr. Narayan. “I look forward to partnering with skilled operating partners and management teams to build on One Rock’s track record of creating meaningful value for portfolio companies and investors alike.”

One Rock invests in companies that are active in the chemicals and process industries; specialty manufacturing and healthcare products; business and environmental services; and food manufacturing and distribution. The firm has a strategic relationship with Mitsubishi Corporation which provides resources to One Rock and its portfolio companies.

“We welcome Rohan to One Rock as we to continue to expand our team with talented professionals that enhance our ability to acquire and improve businesses that meet our investment criteria,” said Mr. Spielvogel.

The addition of Mr. Narayan comes at a time of steady growth for One Rock. Over the last year, the firm has closed four new platforms including Nexeo Plastics (April 2019), a Texas-based distributor of polymer products and engineered resins; Jadex (March 2019), a maker of plastic, nylons, monofilament, and zinc products that are used in health care, consumer, and industrial applications; CentroMotion (November 2019), a Wisconsin-based manufacturer of motion, actuation and control products; and Innophos (scheduled to close this month), a maker of phosphates, phosphoric acids, and other minerals and enzymes used as ingredients in food, health, nutrition, and industrial applications.

One Rock Capital Partners was formed in 2010 and is based in New York.

© 2020 Private Equity Professional | February 7, 2020