Archives for April 2020

Hilltop Adds to American Track Services

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American Track Services, a portfolio company of Hilltop Private Capital, has acquired Savage Industrial Rail Services, a provider of track inspection, maintenance and repair services, from Savage Enterprises.

Hilltop Private Capital formed American Track Services (ATS) in October 2016 to acquire Ft. Worth, Texas-based American Track Generations and Mulberry, Florida-based C.J. Bridges Railroad Contractor. Both companies were active in the design and construction, inspection, repair, and maintenance of railroad track, predominantly for private users.

Customers of ATS include mines, ports, refineries, manufacturing facilities, warehouses, transload facilities, railcar maintenance, short-line and mainline railroads. PNC Mezzanine Capital and Deerpath Capital Management co-invested with Hilltop on the formation of ATS.

The buy of Savage Industrial Rail Services, with locations in Denver and Salt Lake City, adds to ATS’ seven existing locations in Utah, Wyoming, Texas, Florida, Colorado, and Oklahoma.

Hilltop, with offices in New York City and Los Angeles, was formed in 2016 by managing partners Drew Shea and Kate Lehman. “Safety, quality and timely responses to customer needs are critical to success in this industry,” said Ms. Lehman. “The acquisition of Savage Track Services will expand our geographic footprint and provide ATS with enhanced capabilities and reach for the benefit of new and existing customers alike.”

“The Savage Track Services team has a strong reputation of quality service working for some premier customers in the U.S. refining and manufacturing sectors,” said Thomas Lucario, CEO of ATS. “We are proud to add this group to our team at ATS and look forward to carrying on and expanding that legacy within our organization.”

Hilltop makes control-oriented and significant minority investments from $10 million to $30 million in business and industrial products and services companies, based in the US, that have from $10 million to $150 million and from $3 million to $20 million in EBITDA.

Savage Services provides transportation services including trucking, supply chain management, material handling, logistics, marine transportation, toll processing, trans-loading, and terminal operations to the agriculture, mining, manufacturing, transportation, utilities, and construction industries. The company was founded in 1946 by brothers Kenneth, Neal and Luke Savage and is headquartered near Salt Lake City in Midvale, Utah.

Private Equity Professional | April 29, 2020

Imperial Exits Cigar Business

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Imperial Brands has agreed to sell its worldwide premium cigar businesses (Premium Cigars) in two separate transactions – one for the US business (Premium Cigar USA), and the other for the rest of the world (Premium Cigar RoW).

The two transactions total €1,225 million ($1,326 million) of consideration comprised of €185 million ($200 million) for Premium Cigar USA which is being sold to Gemstone Investment Holding, and €1,040 ($1,126 million) for Premium Cigar RoW which is being sold to Allied Cigar Corporation. The total consideration is equal to a multiple of 11.8x Premium Cigars’ FY 2019 EBITDA.

“We are delighted to be able to announce the sale of Premium Cigars in the current challenging global environment,” said Dominic Brisby and Joerg Biebernick, joint interim chief executives of Imperial Brands in a released statement. “This has been a complex transaction involving joint venture partners and assets across multiple geographies and we would like to thank everyone involved for working so hard to get the deal completed. We believe we have found the right long-term owners for Premium Cigars; they are committed to investing in the business to maximize future growth opportunities and are well-positioned to further develop operations internationally.”

Included in the Premium Cigar USA transaction is Tabacalera USA, which is responsible for the business’ premium cigar operations in the US, the world’s largest premium cigar market, and includes the assets of cigar distribution company Altadis USA; several online retail platforms including JR Cigar, cigar.com and Serious Cigars; and Casa de Montecristo, a brick-and-mortar retailer with 28 US stores.

Included in the Premium Cigar RoW transaction are premium cigar manufacturing facilities in Honduras and the Dominican Republic; several Cuban cigar interests including a 50 percent stake in Cuba’s official exporter Habanos, a unit of state-owned tobacco company Cubatabaco. Habanos’ products include well-known brands Cohiba, Montecristo and Romeo y Julieta.

Imperial Brands manufactures and sells tobacco and tobacco-related products including cigarettes, smokeless tobacco, papers, cigars, and e-cigarettes. Company-owned brands include Davidoff, Gauloises, Winston, Kool, Horizon, Cohiba, and Montecristo. The company was formerly known as Imperial Tobacco Group and changed its name to Imperial Brands in February 2016. The company was founded in 1901 and is headquartered in Bristol, United Kingdom.

The Premium Cigars business was acquired by Imperial Brands through its acquisition of Madrid-based cigarette and cigar maker Altadis in 2008.

AZ Capital is the financial advisor to Imperial Brands on these transactions which are expected to close in the third quarter of 2020.

Private Equity Professional | April 29, 2020

Largest Fund Ever for Constitution Capital

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Constitution Capital Partners has held a final close of its fifth fund – Ironsides Partnership Fund V LP and Ironsides Direct Investment Fund V LP – with total commitments of $1 billion (Fund V).

Fund V is the largest the firm has ever raised, it easily exceeded its $600 million target, and was larger than its predecessor fund which closed with $755 million of capital in December 2016. Investors in Fund V include new and existing public pension plans, corporates, Taft-Hartley plans, foundations, endowments, family offices and high net worth investors.

“This latest fundraise is a testament to our team’s demonstrated track record of investing across market cycles and sectors,” said Daniel Cahill, a managing partner at Constitution Capital. “We are grateful to our longstanding and new limited partners for their support and look forward to putting their capital to good use in quality partnership and co-investment opportunities across North America.”

As with its earlier funds, Fund V invests in private equity funds that have from $400 million to $2 billion in total commitments and makes direct investments in North America-based small to mid-cap companies that have enterprise values from $100 million to $1 billion. To date, Fund V has completed 27 direct investments and 11 fund investments.

“For more than three decades, we have developed deep sector expertise through fundamental research and a commitment to proactively building long-term relationships with best-in-class fund managers and high growth businesses,” said John Guinee, a managing partner at Constitution Capital. “We look forward to continuing to execute on this strategy while serving as a preferred partner.”

Constitution Capital is headquartered in Boston with an additional office in New York City.

Ropes & Gray provided legal services to Constitution Capital for this fundraise.

Private Equity Professional | April 29, 2020

Consonance Hits Hard Cap

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Consonance Capital Partners (CCP) has held a final close of Consonance Private Equity II LP at its hard cap of $856 million.

The new fund received support from existing investors, as well as from a number of new limited partners including insurers, endowments, foundations, family offices, asset managers, funds of funds, pension plans, and healthcare providers in the both United States and Europe.

CCP’s first fund closed in July 2014 with $500 million of capital. Like Fund I, the new fund targets growth equity, leveraged buyouts, and recapitalization transactions in healthcare companies that have between $25 million and $500 million in revenue. Within healthcare, sub-sectors of specific interest include providers, payors, distributors, medical device makers, specialty pharmaceuticals, outsourced services, and information technology.

New York City-based CCP was founded in 2005 by its four managing partners – Mitchell Blutt, Benjamin Edmands, Stephen McKenna, and Nancy-Ann DeParle. The four founders released a joint statement on the closing of Fund II.

“We are very pleased to close our second fund at its hard-cap and want to thank our limited partners for their commitment to our firm. Our team will continue to be highly focused and disciplined as we look at investment opportunities that provide high-quality care and where we believe we can help businesses grow and succeed through our strategic advice, operating expertise, extensive relationships and prudent financial management. And as we all manage through the COVID-19 pandemic together, our thoughts and prayers are with all who are suffering and have been impacted.”

As it did with its first fund, CCP engaged Monument Group as its placement agent and hired Latham & Watkins to provide legal services.

Private Equity Professional | April 29, 2020

Altair Acquires Organic Food Maker

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Altair Acquisitions has acquired the assets of Wildtree, a manufacturer of organic and allergen-sensitive food products.

Wildtree’s products include spice blends, seasonings, rubs, sauces, marinades, oils, and dressings. Most Wildtree products are certified organic, Non-GMO or kosher. The company was founded in 1993 and is headquartered in Lincoln, Rhode Island.

“We couldn’t be more excited about having the Wildtree brand and its products as part of the Altair portfolio of companies,” said Michael Gilkenson, chief operating officer of Wildtree. “For over 20 years, Wildtree has given health-conscious families nutritious options to make mealtime special by staying true to our ingredient transparency philosophy. With Altair’s investment, the organization will continue its presence in the market and can look to a future of innovation and growth.”

“The timing is perfect for an investment in an organization like Wildtree,” said Erik Toth, chief executive officer of Altair. “Consumers are increasingly focused on healthful eating, and Wildtree makes it easier to provide these options to their families every day. The company is benefiting substantially from the trend towards subscription-based product delivery and online retailing of innovative food products. We plan to leverage that in significant ways.” Post-closing, Altair’s strategy is to increase Wildtree’s product offerings and expand into new markets where customers are seeking gluten-free, low-sugar, vegetarian, kosher, and organic options.

“Our plan includes partnering with legacy sales representatives and customers that effectively built the original business, and who we enthusiastically embrace as part of the future of the business, to continue the culture of excellence that has been a hallmark of Wildtree’s product offering and customer experience model for many years,” said Tracy Williams, chief investment officer of Altair. “The value creation opportunity for the company’s new investors is substantial due to the thoughtful deployment of growth capital, alongside the expansion of historical revenue streams and diversification of Wildtree’s distribution outlets.”

Altair makes control investments in companies that have revenues of more than $10 million and EBITDA from $2 million to $10 million. Typical enterprise values range from $2 million to $50 million. Sectors of interest include financial and business services; consumer, retail and dining; distribution and logistics; industrial, manufacturing and energy; technology, media and telecom; and healthcare. The firm was founded in 2019 and is headquartered north of Dallas in Frisco, Texas.

Private Equity Professional | April 28, 2020

Advent Continues Software Build

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Transaction Services Group (TSG), a portfolio company of Advent International since June 2019, has acquired TrueCoach, a provider of software used in the fitness industry.

TrueCoach provides software to more than 15,000 personal trainers that conduct more than 4 million workouts monthly. The company’s software is used for client management and communication, workout program building and progress tracking, and nutrition tracking. TrueCoach was founded in 2015 by CEO Casey Jenks and CMO Robert Jack and is headquartered in Boulder, Colorado.

Mr. Jenks will continue to run TrueCoach and Mr. Jack will take on a broader marketing role across the TSG portfolio of software products.

TSG is a provider of business management software and integrated payments services to the health and fitness, childcare and early education, insurance, and theme park sectors. The company’s products are used across Australia, North America, the United Kingdom, Europe and Asia.

The buy of TrueCoach follows earlier add-ons by TSG including boutique software providers Mariana Tek (November 2019), Triib (February 2020), Zingfit (February 2020), and Stadline (April 2020).

“Digital fitness services have enjoyed significant growth in recent years, and we are actively offering TrueCoach to our gym owners in the United Kingdom, Australia, and New Zealand,” said TSG CEO Floris de Kort. “During these challenging times, our clients are looking for new ways more than ever to engage with their members and gym members are looking for new ways to maintain their exercise regimes.  The TrueCoach solution is the perfect answer.”

Advent International invests in companies active in business and financial services; healthcare; industrial; retail, consumer and leisure; and technology, media and telecom. The firm has 15 offices in 12 countries and employs 195 investment professionals across North America, Europe, Latin America, and Asia. Founded in 1984 and headquartered in Boston, Advent has $57 billion in assets under management and has completed more than 350 private equity transactions.

Private Equity Professional | April 28, 2020