Archives for February 27, 2020

Align Acquires Marco Rubber & Plastics

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Align Capital Partners (ACP) has acquired Marco Rubber & Plastics, a specialty distributor of elastomer components, including O-rings, gaskets, and high-performance seals.

Marco’s specialty rubber and plastic components are used in the aerospace, medical, semiconductor, and chemical markets. The company’s in-house inventory and global network of suppliers represent more than 3,000 material formulations and more than a million SKUs. The company has more than 14,000 customers and through its online ordering system ships more than a million parts each month.

Marco, led by President Chad Belinsky, was founded in 1980 as the Marine and Aerospace Rubber Company (MARCO) and has a 37,000 square foot warehouse and manufacturing facility located just north of Boston in Seabrook, New Hampshire.

“We were looking for an investment partner who understands our market opportunity, believes in our technology platform and unique product offering, and brings clear growth resources to our business,” said Mr. Belinsky. “Align’s relevant specialty distribution experience, marketing and technology resources, and track record of successfully partnering with entrepreneurial management teams fit our needs perfectly.”

ACP’s investment in Marco is the company’s first institutional capital. ACP intends to continue the development of Marco’s technology platform that allows buyers to search and compare products by performance attributes, build Marco’s sales and marketing functions, and pursue a buy-and-build strategy to add additional products and broaden its current distribution capabilities.

“Chad and the Marco management team have built a very unique business model of supplying specialty and custom O-rings and seals designed to solve complex engineering challenges and sealing applications,” said Chris Jones, an ACP managing partner. “Marco creating a technology platform unique to the sealing products market is helping rationalize the industry’s fragmented supplier and customer bases by reinventing the way O-rings and sealing components are purchased. We are thrilled to partner with such a dynamic team and execute on Marco’s many growth opportunities.”

In addition to Mr. Jones, the ACP transaction team included Operating Partner Dave Perotti, Vice President Matt Iodice, and Associate Walker Tiller.

Align Capital Partners makes control investments in companies with enterprise values up to $150 million that have from $3 million to $10 million of EBITDA. Sectors of interest include business-to-business services, specialty manufacturing, and value-added distribution. Last month, Align closed its second fund, Align Capital Partners Fund II LP and Align Capital Partners Fund II-A LP (together ACP II), at the combined hard cap of $450 million.

Align, with offices in Cleveland and Dallas, was founded in 2016 by managing partners Steve Dyke, Rob Langley, and Chris Jones – all formerly of The Riverside Company – and has a total of 18 team members.

© 2020 Private Equity Professional | February 27, 2020

Wynnchurch Buys Pennsylvania Machine Works

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Wynnchurch Capital has acquired Pennsylvania Machine Works (Penn Machine), an integrated manufacturer of high pressure forged fittings and branch connections.

Penn Machine’s products range in diameters from 1/8″ to 72″ and are used in the marine, oil and gas, nuclear power, petrochemical, shipbuilding, cryogenic and steel making industries. The company has capabilities in carbon and stainless steels, nickel alloys, chromium-molybdenum alloys, titanium, aluminum alloys, and copper-nickel.

The company operates through three divisions – Penn Machine, US Drop Forge and Penn Texas – and is headquartered near Philadelphia in Aston, Pennsylvania with a forging facility nearby in Swedesboro, New Jersey and a machine shop in Houston, Texas. Penn Machine was founded in 1931 by Charles Lafferty and today is led by President Joe Pro.

“We are committed to providing our customers with a one-stop solution for all their forged fittings and branch connection needs and are excited to partner with Wynnchurch as we continue that mission,” said Mr. Pro. “Wynnchurch understands the importance of meeting the needs of our customers which is constantly evolving. Wynnchurch is the right partner to enable Penn Machine to reach the next level of growth.”

“Penn Machine has built a strong reputation for providing customers with industry-leading service levels across a broad offering of fittings and branch connections,” said Greg Gleason, a managing director at Wynnchurch. “We are excited to partner with Joe and his team to continue the company’s impressive track record.”

Wynnchurch makes investments in middle-market companies that have revenues of $50 million to $1 billion. Sectors of interest include aerospace & defense, automotive, building products, chemicals, food, logistics, energy services & equipment, environmental services, industrial products & services, metals & mining, and paper & packaging.

Wynnchurch has recent experience investing in the forging and machining sector. Last June, it formed Premier Forge Group to acquire two closed-die forging facilities from publicly traded Allegheny Technologies.

The acquired operations are located in Portland, Indiana and Lebanon, Kentucky and produce forgings used by OEMs in the transportation, oil & gas, construction, mining, agricultural, and aerospace and defense markets.

In January 2020, Wynnchurch closed its fifth private equity fund, Wynnchurch Capital Partners V LP, with $2.28 billion of committed capital. The new fund, which began its marketing in September 2019 with a target of $1.6 billion, was oversubscribed and closed at its hard cap. Wynnchurch is actively seeking investment opportunities for its new fund.

The buy of Penn Machine follows Wynnchurch’s buy last November of Clyde Industries, an Atlanta-based designer and manufacturer of soot blowers that are used to clean residue and deposits from the walls of steam boilers and heat exchangers.

Wynnchurch was founded in 1999 and is headquartered in the Chicago suburb of Rosemont with additional offices in Los Angeles (El Segundo), and Toronto.

© 2020 Private Equity Professional | February 27, 2020

Corsair Capital Closes Fifth Fund

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Corsair Capital has held a final, on target close of its fifth fund, Corsair V Financial Services Capital Partners LP, with $1 billion of limited partner commitments from new and existing investors from the firm’s earlier funds.

Corsair Capital was founded in 1992 as part of J.P. Morgan & Co. – it spun out as an independent firm in 2006 – and has invested across a range of geographies and in substantially all of the subsectors of the financial services industry including payments, financial technology, insurance, wealth & asset management, banking and specialty finance.

Typical investments by Corsair are from $50 million to $100 million in companies that have enterprise values of $100 million to $500 million. The firm also invests in larger transactions when partnering with co-investors. Corsair is based in New York with an additional office in London.

“The successful close of Corsair V is a recognition of our differentiated strategy and a testament to our team’s ability to partner with best-in-class companies and management teams,” said Ignacio Jayanti, managing partner of Corsair. “Through our performance and partnership-driven philosophy, we help our portfolio companies flourish by leveraging our team’s sectoral perspective, deep network of relevant industry relationships and impactful resourcing for value-add initiatives.”

Corsair’s new fund, along with an additional $264 million of co-investments, has already made investments in six portfolio companies including Axo AS, a Norway-based originator of consumer loans (2020); IDnow, a Germany-based provider of SaaS identity verification products (2019);

ZEDRA Group, a Switzerland-based provider of financial services to high net worth individuals and medium to large-sized companies (2019); Jackson Hewitt Tax Service, the second-largest provider of assisted tax-preparation services in the United States (2018); Spring Venture Group, a United States-based digital direct-to-consumer insurance sales and marketing company specializing in the senior market (2018); and RGI, an Italy-based provider of insurance management services (2017).

“We are pleased to have received such strong support from our limited partners, and we would like to thank our investors for their commitment to the firm throughout the years and for the continued confidence they have placed in our team,” concluded Mr. Jayanti. “Our value creation practices continue to evolve from a strong foundation, and the successful close of Corsair V reflects the fact that our strategy is working.”

Corsair’s previous fund, Corsair IV Financial Services Capital Partners LP, closed in 2012 with $863 million of committed capital.

© 2020 Private Equity Professional | February 27, 2020

Twin Bridge Adds Senior Associate

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Small and lower middle-market investor Twin Bridge Capital Partners has hired Brad Wrege as a new senior associate.

Mr. Wrege will be based in the firm’s Winston-Salem office and will be active assessing and executing new investment opportunities. Twin Bridge makes investments in North American-based small and lower middle-market buyout funds and it also makes non-control co-investments across a range of industries.

“We are excited to welcome Brad to the firm,” said Matt Petronzio, a partner at Twin Bridge. “Brad deepens our bench strength in small market buyout research and analysis, and we are confident he will be a valuable contributor to our growing investment team.”

Before joining Twin Bridge, Mr. Wrege was a senior associate with Five Points Capital, where he co-led the firm’s small buyout strategies platform. Earlier, he was an analyst at venture capital firm TrueBridge Capital Partners and an associate at Atlas Diligence. Mr. Wrege earned his undergraduate degree in Economics from the University of North Carolina.

Twin Bridge has raised more than $2.5 billion in capital since its founding in 2005 and has offices in Chicago, Illinois and Winston-Salem, North Carolina.

© 2020 Private Equity Professional | February 27, 2020