October 2, 2020
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Archives for October 2, 2020

SK Carves-Out Specialty Polymers Biz of Baker Hughes

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SK Capital has formed NuCera Solutions to acquire the specialty polymers business of Baker Hughes.

NuCera produces specialty olefin polymers and high melting point polyethylene waxes that are used in adhesives, candles, coatings, imaging, personal care, and plastics applications. The business began operations in 1934 as Bareco Oil Company and has manufacturing operations in Barnsdall, Oklahoma.

With the closing of the transaction, SK has named Steve McKeown as the company’s chief executive officer and Shawn Ham as its chief financial officer. Mr. McKeown was most recently the president and chief operating officer of Galata Chemicals, a Connecticut-based maker of thermoplastics and polyolefin additives which was owned by Aterian Investment Partners from 2010 to 2014. Mr. Ham was most recently the chief accounting officer and controller at Texas-based KMG Chemicals.

“We are very excited to have Steve and Shawn joining the NuCera team,” said Jonathan Borell, a managing director of SK Capital. “Their combination of chemicals industry experience and leadership skills will help transition NuCera into the next phase of its growth.”

New York City-based SK Capital invests in the specialty materials, chemicals and pharmaceutical sectors and typically invests equity of $100 million to $200 million in each portfolio company. In February 2019, the firm held a final closing of SK Capital Partners Fund V LP with total committed capital of $2.1 billion.

“We believe NuCera’s leading specialized polymerization technologies combined with a strong existing base of talent and new leadership team will transform the company into an independent leader of global polymer solutions,” said Mario Toukan, a managing director of SK Capital.

Debt financing for this transaction was provided by KeyBanc Capital Markets and Evercore was the financial advisor to Baker Hughes.

Private Equity Professional | October 2, 2020

Snow Phipps Buys Prototek from CORE

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Snow Phipps has acquired Prototek, a provider of rapid prototyping services, from CORE Industrial Partners.

Prototek’s capabilities include CNC machining, powder coating, chromating, anodizing, silk screening, and assembly. The company can prototype parts from a range of materials. The company specializes in difficult and complex parts and has capabilities with a range of metals and plastics including steel, stainless steel, mirrored stainless, aluminum, copper, and polycarbonates.

Prototek’s customers are active in the aerospace, defense, medical, robotics, electronics, consumer, telecommunications, and general industrial sectors. The company, founded in 1987 and led by CEO Bill Gress, is headquartered 75 miles north of Boston in Contoocook, New Hampshire, and has manufacturing facilities in Wisconsin, California, and New Hampshire.

CORE acquired Prototek from the founding Isabelle family in December 2017. During its ownership term, the company closed two add-on acquisitions that provided the company with a nationwide footprint and added service capabilities in the medical and technology markets. The two add-ons were Cal-X, a Wisconsin-based provider of rapid prototyping and short-run production services, in July 2019; and Hayes Manufacturing Services, a California-based provider of rapid prototyping and short-run production services, in July 2018.

“During CORE’s ownership, we made considerable investments to significantly enhance Prototek’s sales and marketing capabilities, including development of an experienced sales team and deployment of a digital marketing strategy that drove rapid organic growth,” said TJ Chung, a senior partner of CORE and the chairman of Prototek’s board. “Prototek augmented these growth-enabling investments with myriad operational initiatives to expand capacity, integrate systems and improve access to data for better and faster decision-making.”

“We could not be prouder of what Prototek and its outstanding management team have accomplished over the last few years,” said John May, the managing partner of CORE. “With access to CORE’s operational resources and support, the team built Prototek into a national, market-leading rapid prototyping services provider.”

With the close of the sale, Jay Twombly, an operating partner at Snow Phipps, will join Prototek as its non-executive chairman of the board. “Bill and his team have a proven track record of success and a clear vision to drive further growth,” said Mr. Twombly. “We look forward to working with them and providing the resources needed to execute their expansion strategy.”

“We are excited to partner with Prototek and its strong management team,” said John Pless, a partner at Snow Phipps. “Prototek has built a differentiated platform and we are excited about the significant opportunities we see for both organic and acquisition growth.”

New York City-based Snow Phipps makes control investments in companies primarily located in North America with enterprise values ranging from $100 million to $500 million that require equity investments ranging from $50 million to $150 million. Sectors of interest include industrials, services, and consumer. The firm was co-founded by Ian Snow and Ogden Phipps in April 2005.

Chicago-based CORE makes control investments in companies that have revenues of up to $200 million, EBITDA of up to $20 million, and enterprise values up to $150 million. Sectors of interest include a range of specialty verticals within the manufacturing and industrial technology sectors. In February 2019, the firm held a final close of CORE Industrial Partners Fund I LP with total commitments of $230 million.

Lincoln International was the financial advisor to Prototek on this transaction.

Private Equity Professional | October 2, 2020

Castle Harlan Sells Colyar to Banneker

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Castle Harlan has sold Colyar Technology Solutions to EMS LINQ, a portfolio company of Banneker Partners.

Colyar specializes in the design, development, and implementation of child nutrition, food distribution, and compliance management software. The company was founded in 1989 and is headquartered in Phoenix.

Castle Harlan acquired Colyar in April 2016 and expanded the company to become the largest provider of software used to manage the U.S. Department of Agriculture’s Child Nutrition and Food Distribution Programs. These federal programs provide funding for the purchase of USDA commodities to states, which in turn distribute the funds to local school districts to provide meals to children. Under Castle Harlan’s ownership, Colyar grew to serve 37 states, processing over $9 billion in claim reimbursements annually.

“Colyar is a great example of a Castle Harlan portfolio company that capitalized on its leadership position and grew both organically and through add-on acquisitions,” said David Pittaway, the vice-chairman of Castle Harlan. “Colyar has been a highly successful investment for Castle Harlan and its limited partners, and we wish the company and management team the best on its next phase of growth.”

Castle Harlan makes control investments in middle-market companies in North America, Europe, and Australia. The firm has raised eight private equity funds – five in the United States and three in Australia – totaling more than $6 billion in capital commitments.  Castle Harlan was founded in 1987 and is based in New York City.

“During our ownership period, we were able to strengthen Colyar’s position as the leading provider of technology-enabled school nutrition solutions by making significant investments in management, add-on acquisitions, and developing proprietary software,” said Patrick Zyla, a vice president at Castle Harlan.

“Our partnership with Castle Harlan has allowed us to provide customers with new technology solutions and related services,” said Colyar CEO Greg Baker. “We look forward to joining forces with Banneker and LINQ as we continue to develop new software products and provide higher service levels across the State and K-12 markets.”

LINQ provides software and analytics used by states and K-12 school districts to manage their operations. The company’s products include finance and human resources, nutrition management, digital payments, school and district websites, student registration, and document management. LINQ was founded in 1989 and is headquartered in Wilmington, North Carolina.

San Francisco-headquartered Banneker Partners invests in industry-vertical enterprise software businesses with annual revenues of up to $50 million. The firm is led by managing partner Stephen Davis who founded the firm in 2010. Prior to Banneker, Mr. Davis was a co-founder of Vista Equity Partners.

Private Equity Professional | October 2, 2020

Tree Line Sees Future at Alpine’s Ingenio

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Tree Line Capital Partners and CVC Credit Partners have provided an increase to their existing credit facility to Ingenio, a portfolio company of Alpine Investors.

With the new increase, used to support an add-on acquisition which closed in August, the Tree Line /CVC Credit facility with Ingenio now totals $127 million. Tree Line was the Administrative Agent and Lead Arranger on the transaction.

Ingenio is an online platform that connects advice-seekers with coaches and advisors. Since founding, the Ingenio platform has enabled over 40 million phone, chat, and web-based personal advice conversations.

The company’s brands include Keen.com (personal advice); PsychicCenter.com (a community of astrologers, tarot readers, and clairvoyants); LiveAdvice.com (life-coaching, relationship coaching, and career advice); Ether.com (provides phone and email monetization tools to advice providers); Horoscope.com, Astrology.com, Horoscopo.com and AstroCenter.com (free horoscopes, paid astrological reports, games, and content).

Ingenio was founded in 1999 and was acquired by AT&T in 2007. It was acquired by Alpine from AT&T in May 2013, and in July 2015 Ingenio completed the add-on acquisition of Horoscope.com. The company, led by CEO Warren Heffelfinger, is headquartered in San Francisco.

“We have enjoyed building a lasting relationship with the Tree Line and CVC Credit teams across several transactions,” said Mr. Heffelfinger. “They have reliably answered the call when it has come to additional capacity for add-on acquisitions coupled with a creative approach to tailoring debt structures to a transaction’s requirements.”

“We have been extremely pleased with Ingenio’s strong performance and the long-term partnership we’ve built since 2015,” said Frank Cupido, a partner at Tree Line. “Our relationship with Ingenio is a great example of our ability to grow with a borrower from initial platform acquisition through various stages of growth and capital needs, including acquisitions, recapitalizations and other flexible financings.  Warren and the team have built a best-in-class organization and we look forward to working with them in the years ahead.”

Tree Line provides first lien term loans, unitranche term loans, and equity co-investments to North America-based lower middle market companies that have EBITDA from $3 million to $30 million and transaction sizes up to $150 million. The firm has extensive direct lending experience – it has completed more than 110 transactions – across multiple economic cycles and has generated significant repeat investment opportunities from private equity sponsors. Tree Line is headquartered in San Francisco with additional offices in New York City, Los Angeles, and Austin.

CVC Credit Partners, the credit strategy arm of private equity firm CVC, invests in senior secured loans to middle-market companies that have EBITDA from $10 million to $40 million. The credit group has offices in New York City and London and manages $26 billion of assets.

San Francisco-based Alpine invests in control buyouts, majority recapitalizations, and corporate carve-outs of recurring revenue software and services businesses, with enterprise values from $5 million to $400 million and EBITDA of $1 million to $40 million. In November 2019, the firm held a hard cap close of Alpine Investors VII LP with $1 billion in limited partner capital commitments. The new fund was oversubscribed and handily beat its original target of $750 million.

Private Equity Professional | October 2, 2020

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