Archives for November 11, 2020

Drew Foam Switches Sponsors

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Wynnchurch Capital has acquired Drew Foam, a maker of expanded polystyrene foam products, from Branford Castle.

Drew Foam’s products are used in industrial, construction, cold chain pharmaceutical and food applications, and consumer markets. The company, led by CEO Bill Givens, was founded in 1965 and is headquartered 80 miles south of Little Rock in Monticello, Arkansas. The company has three additional operating facilities, one each in Georgia, Tennessee, and South Carolina.

“During our partnership with Branford, Drew Foam has achieved the highest record performance in our 50-year history,” said Mr. Givens. “We are looking forward to the company’s next chapter with Wynnchurch Capital and capitalizing on further growth opportunities in the market.”

Branford acquired Drew Foam in June 2018 from Gladstone Investment Corporation. During Branford’s ownership term, the company’s earnings nearly doubled largely through organic sales growth. In November 2019, Drew Foam closed the add-on acquisition of Davis Core & Pad, a Georgia-based manufacturer of expanded polystyrene foam packaging products used in consumer perishables, IT products, and office furniture.

“We are delighted with this highly successful investment for Branford and our limited partners,” said John S. Castle, CEO of Branford.

New York City-based Branford Castle invests in companies that have enterprise values of up to $100 million and EBITDAs of less than $15 million. Sectors of interest include consumer products and services, commercial distribution, industrials and specialty manufacturing, business services, and logistics.

“Our partnership with Bill Givens has been incredible,” said Laurence Lederer, a senior managing director at Branford. “Drew’s unique business model allowed it to achieve significant heights despite challenging economic times. This investment outperformed our optimistic expectations.”

According to Wynnchurch, Drew Foam is positioned to benefit from growing product categories, particularly in geofoam for construction applications and insulated shipping containers for cold chain applications. ​“Wynnchurch is eager to partner with Drew,” said Frank Hayes, a managing partner at Wynnchurch. “The company fits our investment philosophy of acquiring a differentiated market leader known for its strong customer service with significant organic and inorganic growth potential.”

Wynnchurch makes investments in middle-market companies that have revenues of $50 million to $1 billion. 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 was founded in 1999 and is headquartered in the Chicago suburb of Rosemont with additional offices in Los Angeles (El Segundo), and Toronto.

​Deloitte Corporate Finance was the financial advisor to Drew Foam.

© 2020 Private Equity Professional | November 11, 2020

Gemspring to Sell Therma to Blackstone

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Gemspring Capital has agreed to sell Therma Holdings to Blackstone Energy Partners.

Therma specializes in complex HVAC, high purity process piping, and process controls for cleanrooms, laboratories, and high-tech manufacturing facilities. Customers of Therma include general contractors, construction managers and owners in the technology, biopharmaceutical, data center and semiconductor industries.

Therma, which performed the original mechanical work for some of the founding clean rooms and semiconductor fabrication facilities in Silicon Valley, was founded in 1967 and is led by CEO Jeff Sprau. Therma has more than 2,200 employees and is headquartered in San Jose, California.

“Gemspring has been a tremendous partner to Therma and has been instrumental in helping us develop and execute our growth strategy,” said Mr. Sprau. “This is a very exciting new chapter for our company and Blackstone has provided a strong endorsement for Therma and our best-in-class service offering.”

Gemspring acquired Therma in June 2017 and completed four add-on acquisitions including Gilbert Mechanical Contractors, a Minnesota-based provider of mechanical, electrical, plumbing, controls, and fire protection services – including design and build – to commercial customers in the healthcare, commercial, and institutional markets (June 2020); VarcoMac, a Maryland-based provider of electrical systems and services to the data center, healthcare and high technology industries (September 2019);

Integrated Mechanical Systems, a California-based provider of mechanical design, fabrication, construction and maintenance services to commercial, institutional, retail, and light industrial facilities (February 2019); and Yearout Mechanical, a New Mexico-based design and build provider of mechanical, fabrication and maintenance services for HVAC, plumbing and piping systems (December 2018).

“Therma is a fantastic company led by a great team. We are grateful for the opportunity to be a steward of Therma over the course of our ownership and contribute to its growth,” said Bret Wiener, a managing partner of Gemspring. “Therma has been an extremely successful investment for management and our investors. We look forward to the company’s continued success under Blackstone’s ownership.”

“Therma management consistently executed the strategic and tactical goals we collectively developed, nearly tripling annual revenue during our ownership as a result,” said Thomas Zanios, a managing director at Gemspring. “We are thrilled with the outcome of our investment and confident that Therma is well-positioned to continue on its strong growth trajectory.”

Gemspring invests in companies that have revenues up to $500 million and are active in the business services, distribution and logistics, financial and insurance services, healthcare services, industrial services, software and tech-enabled services, and specialty manufacturing sectors. The firm, which held a final closing of its debut fund in November 2016 with $350 million of capital commitments, is based in Westport, Connecticut. In March 2020, Gemspring closed its second fund with $750 million of capital commitments.

Blackstone Energy Partners, the buyer of Therma, is Blackstone’s energy-focused private equity business which has invested over $17 billion of equity across a range of sectors within the energy industry. New York City-based Blackstone (NYSE: BX) invests in private equity, real estate, public debt and equity, non-investment grade credit, real assets, and secondary funds. The firm also provides financial advisory services, including financial and strategic advisory, restructuring and reorganization advisory, and fund placement services.

Jefferies and Lincoln International were the financial advisors to Therma. The transaction is expected to close by the end of the year.

© 2020 Private Equity Professional | November 11, 2020

Jordan Closes Sixth Dental Products Add-On

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Young Innovations, a portfolio company of The Jordan Company, has acquired Preat Corporation, a provider of dental implant components, attachments and tools.

Preat was founded in 1980 by Thomas Bormes and is headquartered north of Los Angeles in Santa Maria, California. President Chris Bormes, the son of the founder, will continue to lead the business under Young Innovations ownership.

“Preat represents an exciting expansion in the implant prosthetic sector with a great track record of growth. This acquisition builds upon our strategy to make it easier for the dentist, periodontist and surgeon to incorporate implants and surgical procedures into their practices,” said Dave Sproat, CEO of Young Innovations.

Young Innovations develops and manufactures preventive, restorative, orthodontic and endodontic supplies and equipment used by dentists, oral surgeons, periodontists, hygienists, dental assistants and consumers. The company’s products include disposable and metal prophy angles (used tool for tooth polishing), prophy cups and brushes, dental micro-applicators, moisture and infection control products, orthodontic toothbrushes, flavored examination gloves, and children’s toothbrushes and toothpaste. In addition, the company offers a line of diagnostic products that includes panoramic X-ray machines and related supplies. Young Innovations is headquartered northwest of Chicago in Algonquin, Illinois.

“Our acquisition of Preat reflects our continued commitment to invest in the growing area of implant-related and oral surgery products,” said Dan Garrick, vice president of corporate development at Young Innovations. “Preat’s ‘one-stop-shop’ product line for implant restoration represents an excellent addition to our portfolio as we move toward a full range of products in the oral rehabilitation segment.”

In October 2017, The Jordan Company acquired a majority equity interest in Young Innovations from Linden Capital Partners, which remains an investor in the company. Linden first invested in Young Innovations in January 2013.

Jordan has closed several add-on acquisitions for Young Innovations including PuraGraft (November 2019), Germiphene Corporation (June 2019), Crystal Tips (April 2019), Johnson-Promident (July 2018) and Mydent International (January 2018).

The Jordan Company is a middle-market private equity firm that invests in a range of industries including industrials, transportation and logistics, healthcare, consumer, telecom, technology, and utilities. The firm was founded in 1982 and is headquartered in New York City with an additional office in Chicago.

© 2020 Private Equity Professional | November 11, 2020

GTCR Closes Fund Thirteen

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GTCR has closed its thirteenth fund, GTCR Fund XIII LP, with $7.5 billion of limited partner capital commitments.

The new fund, raised in just five months, had a target of $6.75 billion and was oversubscribed. Fund XIII is the largest investment fund in GTCR’s history.

Investors in Fund XIII include public pension funds, endowments, foundations, funds of funds and individuals, including GTCR professionals. A large majority of the commitments to Fund XIII came from the firm’s existing investors, with many increasing the size of their commitment from prior funds. The firm also received commitments from a meaningful number of new investors.

GTCR has been active recently building Regatta Medical, a platform that it formed with Chip Hance in April 2017 to acquire medical device manufacturing companies. Earlier this month, Resonetics, a subsidiary of Regatta Medical, acquired the medical business unit (HTI Medical) of Hutchinson Technology, a subsidiary of electronics giant and Japan-headquartered TDK.

Minnesota-based HTI Medical fabricates and assembles micro-components for medical devices used in minimally-invasive conventional and robotic surgery applications. New Hampshire-headquartered Resonetics provides laser micro-machining manufacturing services for medical device and diagnostic companies, as well as to other markets requiring laser processing of polymers and glass. The company’s capabilities include precision laser prototyping and manufacturing that can create features as small as one micron – a fraction of a human hair – in a variety of materials.

Since its founding in 1980, Chicago-based GTCR has invested more than $18 billion in over 200 companies. Sectors of interest include business services; technology, media & telecommunications; healthcare, and financial services & technology.

© 2020 Private Equity Professional | November 11, 2020