Archives for March 2021

O’Neil Capital Sells IBD to News Corp

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News Corp has agreed to acquire Investor’s Business Daily from O’Neil Capital Management for $275 million.

Investor’s Business Daily (IBD) was founded as Investor’s Daily in 1984 by William J. O’Neil. IBD operates the Investors.com website which reaches almost 11 million unique visitors each month.

According to News Corp, a majority of IBD’s annual revenues and profits come from the company’s investor tools, research and analysis products, and it has experienced double-digit revenue growth over the past several years, with digital representing more than 90% of IBD’s revenues.

IBD has nearly 100,000 digital subscribers across its platforms and publishes a print edition once a week. IBD, led by CEO William S. O’Neil and President Jerry Ferrara, has 130 employees and is headquartered in Los Angeles.

After the closing of the transaction – expected by the end of June 2021 – IBD will continue to be based at its headquarters in Los Angeles and will operate as a stand-alone brand as part of News Corp’s subsidiary Dow Jones, the publisher of The Wall Street Journal, MarketWatch, Barron’s and numerous other publications, products and news sites.

“The prospect of combining our collective skills and strengths, especially our shared legacies of trusted, rigorous journalism and research, opens up a wide range of potential,” said Almar Latour, the chief executive officer of Dow Jones. “It creates exciting possibilities to grow quality at scale, diversify our tailored digital offerings and forge even deeper connections with the professional and retail investment communities.”

“IBD will greatly enhance our e-expertise in finance, with compelling digital coverage, unique tools and high-yielding services. We will be able to cross-sell and up-sell with Dow Jones financial products and provide specialist insights for a knowing business audience,” said Robert Thomson, the chief executive officer of News Corp. “Dow Jones and the Wall Street Journal reported record profits in the last quarter, and I have no doubt that IBD’s savvy digital products and journalism will significantly bolster profitability at the Dow Jones segment. This transformative deal obviously comes as investor interest is surging in stock and bond markets and there is a premium for intelligence, insight and integrity.”

New York-headquartered News Corp  (NASDAQ: NWS) was created in 1980 by Rupert Murdoch as a holding company for News Limited which was founded in 1923 in Adelaide, Australia. In 1949, Sir Keith Murdoch took control of News Limited and his son Rupert inherited a controlling interest in the business in 1952. In 2012, the company split into two publicly traded companies, News Corp and 21st Century Fox.

Canaccord Genuity (TSX: GF) was the financial advisor to O’Neil Capital Management on this transaction. The firm is a full-service investment banking and financial services company that specializes in wealth management and capital markets. The firm provides mergers and acquisitions, corporate finance, restructuring, debt advisory and strategic advice for corporate, government and private equity clients globally.

Los Angeles-based O’Neil Capital Management, the seller of IBD, is a family office with investment interests in asset management, real estate, printing, digital media, brokerage, investment advisory, and information technology services.

© 2021 Private Equity Professional | March 30, 2021

Audax Adds Shoe Cover Maker to Aspen

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Aspen Surgical Products, a portfolio company of Audax Private Equity, has acquired BlueMed Medical Supplies.

Montreal-headquartered BlueMed is a manufacturer of disposable shoe covers and other personal protection products used in healthcare, pharmaceutical, and laboratory facilities. The company is led by President Michel Kassar.

“We are very excited to join forces with Aspen and contribute over a decade of product and automation development in the shoe cover business,” said Mr. Kassar. “Our complementary businesses will create a stronger and more diversified offering across a wide spectrum of industries and solidifies our presence as a North American leader in the personal protective equipment business.”

Aspen Surgical is a manufacturer of branded and private label single-use surgical products including scalpels, blades, wound care, fluid control, and other surgical products. The company, led by CEO Jason Krieser with approximately 500 employees, was founded in 1999 and operates four manufacturing facilities near Grand Rapids in Caledonia, Michigan (headquarters); Coralville, Iowa; Las Piedras, Puerto Rico; and Agua Prieta, Mexico.

Audax acquired Aspen Surgical from Hillrom (NYSE: HRC) in July 2019 for $170 million. According to Aspen Surgical, the buy of BlueMed strengthens Aspen’s portfolio of disposable and safety products that are sold into the acute care market.

In December 2020, Aspen Surgical completed the add-on acquisition of Protek Medical Products, an Iowa-based manufacturer of single-use ultrasonic probe covers, and needle guides used in tissue biopsies, fluid aspiration, and vascular access procedures. Earlier, in May 2020, Aspen acquired Precept Medical Products, a North Carolina-based maker of single-use disposable protective medical apparel including face masks and protective gowns.

“BlueMed is a highly synergistic fit for Aspen in terms of manufacturing and commercial operations,” said Mr. Krieser. “Coming shortly after our acquisitions of both Precept Medical and Protek Medical, the BlueMed offering further enhances our portfolio of high-quality products that address infection prevention in the acute care environment at a time when reducing cross-contamination has never been more important.”

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

© 2021 Private Equity Professional | March 30, 2021

Crane Carrier Sold to Battle Motors

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Turnspire Capital Partners has sold its portfolio company Crane Carrier Company to Battle Motors.

Turnspire formed Crane Carrier in December 2018 to acquire the specialty vehicle group of Hines Corporation, a manufacturer of heavy-duty truck chassis, complete vehicles and aftermarket parts. Crane Carrier’s products are used in the work truck industry and include custom, severe-service chassis and purpose-built vehicles used in the refuse and recycling, infrastructure maintenance, ground support, agriculture, and energy markets. The company’s products are sold under the Crane Carrier Company and Crane Carrier Company Engineered Chassis brands.

Crane Carrier is headquartered 90 miles south of Cleveland in New Philadelphia, Ohio. The company was founded in 1946 and acquired by Hines in 2013.

During Turnspire’s ownership term, the firm worked with management to launch Crane Carrier as an independent company separate from Hines, divested its non-core mixer division (CyKlone Mixers), introduce new refuse and custom chassis products, and began positioning the business as an acquisition target in the electric vehicle truck segment.

“We are thrilled with the outcome of our Crane Carrier investment, which serves as a validation of our investment strategy,” said Ilya Koffman, a managing partner of Turnspire. “The business is well-positioned to lead the transition of large vocational truck fleets to all-electric, zero-emission vehicles. We look forward to following Crane Carrier’s further growth and innovation as part of Battle Motors.”

“It was great working with Turnspire, and we look forward to continuing to build the market’s best trucks at Crane Carrier, which is now a Battle Motors company,” said Mike Patterson, the CEO of Battle Motors.

New York City-based Turnspire invests in companies with revenues between $50 million and $400 million and valuations up to $125 million. The firm prefers companies that are underperformers and/or in need of an operational turnaround.

Battle Motors is based in New Philadelphia, Ohio.

Greenbriar Closes Its Biggest Fund

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Greenbriar Equity Group has held a final and oversubscribed closing of Greenbriar Equity Fund V LP with total capital commitments of nearly $1.7 billion. The new fund had an original target of $1 billion.

Greenbriar began fundraising in October 2020 and completed the raise using an entirely virtual process. Greenbriar’s fifth fund is the largest it has ever raised and received support from both existing and new investors across the US, Europe and Asia.

“We are grateful for the support we have received from so many well-regarded institutional investors,” said Noah Roy, a managing partner at Greenbriar. “It is a recognition of our team’s long-term success together, our distinct culture and our consistent and focused strategy. Fund V will continue with the same strategy and approach that has driven our success to date, a focus on growing market-leading companies in sectors and situations where we can accelerate growth and add tangible value as we seek to deliver strong returns for our investors.”

Greenbriar invests from $75 million to $150 million of equity per transaction in businesses with enterprise values from $100 million to $1 billion. Sectors of interest include industrial services and advanced manufacturing. Greenbriar was founded in 1999 and is based in Rye, New York.

Earlier this month, Greenbriar acquired Oil Changers, a provider of automotive oil change and lubrication services with 56 locations across California (50) and Hawaii (6), from Trivest Partners. The company was founded in 1984 by automotive entrepreneur Larry Read with a single location in the San Francisco Bay Area. Oil Changers was one of the first operators to develop the drive-through, stay-in-your-car oil change model. The company, led by CEO Eric Frankenberger, is headquartered near San Francisco in Pleasanton, California.

“Oil Changers is one of the few remaining independent providers of scale in the quick lube industry, a segment of the automotive aftermarket that we see benefitting from organic growth and consolidation tailwinds over the coming years,” said Matt Burke, a managing director of Greenbriar. “We were particularly impressed by the company’s track record of consistent growth, which is the product of strong leadership and an unparalleled reputation for service excellence with its loyal customer base. We look forward to partnering with Eric and the entire management team to further expand the platform.”

Evercore was the placement agent on this fundraise and Kirkland & Ellis provided legal services.

© 2021 Private Equity Professional | March 30, 2021

Redwire’s Valuation Reaches Orbit

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Redwire, a portfolio company of AE Industrial Partners, has agreed to merge with publicly traded special purpose acquisition corporation Genesis Park Acquisition.

AEI formed Redwire in June 2020 to combine Maryland-based Adcole Space with Colorado-based Deep Space Systems, a maker of advanced space components. AEI acquired Adcole Space in March 2020 (then Adcole Maryland Aerospace) from Artemis Capital Partners. Redwire is led by chairman and CEO Peter Cannito.

Adcole is a manufacturer of guidance, navigation, and control components used in low-earth orbit and geosynchronous satellites, and interplanetary spacecraft. The company’s key products include sun sensors (a navigational instrument used by satellites and spacecraft to detect the position of the sun); and star trackers and cameras (used to determine the orientation of a satellite and spacecraft with respect to the stars).

“Space-based capabilities and services are improving lives on Earth every day, and Redwire is an invaluable mission partner, providing technology that has been at the forefront of space infrastructure from the beginning,” said Mr. Cannito. “Today, the influx of private capital, new public sector space initiatives and decreased launch costs are driving tremendous growth in the space industry, which is projected to exceed $2 trillion by 2040.”

In addition to Adcole Space and Deep Space Systems, Redwire’s other acquisitions include the February 2021 buy of Deployable Space Systems, a California-based provider of deployable structures, telescopic booms, and solar arrays used in satellite and space applications; the January 2021 buy of Oakman Aerospace, a Colorado-based provider of spacecraft and satellite design and development services; the December 2020 buy of LoadPath, a New Mexico-based maker of deployable space structures and thermal management components used in launch vehicle and satellite manufacturing; the June 2020 buy of Florida-based Made In Space, a pioneer of in-space manufacturing and assembly technologies including 3-D printers that have flown on the International Space Station; and the October 2020 buy of Colorado-based Roccor, a supplier of deployable booms, structures, antennas, and solar arrays for spacecraft.

Revenues for Redwire in 2020 are estimated to be $119 million with an Adjusted EBITDA of $13 million. For 2021, revenues are projected to be $163 million with an Adjusted EBITDA of $20 million. The agreement between AEI and Genesis Park values Redwire at $615 million which equates to a 47x valuation multiple of estimated 2020 Adjusted EBITDA and 31x projected 2021 Adjusted EBITDA. Redwire is projecting 2022 Adjusted EBITDA of $32 million for a 19x valuation multiple. More financial information can be seen on Genesis Park Acquisition’s 8-K filing HERE.

“As an innovative space infrastructure leader, Redwire is set to power a new age of space travel, exploration, and commerce,” said Kirk Konert, a partner at AEI. “With this transaction, Redwire will have even greater opportunities to drive growth and value by delivering tailored, responsive solutions for its growing customer base across the public and private sectors.”

Boca Raton-based AEI invests in the aerospace and defense, power generation, and specialty industrial sectors with a specific focus on technical manufacturing; distribution and supply chain management; maintenance, repair, and overhaul; and industrial service-based businesses. Typical company targets will have from $50 million to $500 million of revenue. In July 2018, the firm held a final hard-cap closing of its second private equity fund, AE Industrial Partners Fund II LP, with $1.36 billion in commitments.

Genesis Park Acquisition (NYSE: GNPK), one of the first aerospace and aviation services focused SPACs, closed its initial public offering in November 2020 and is sponsored by Genesis Park, a control investor in lower middle-market companies that have revenues from $5 million to $100 million and EBITDA of $2 million to $20 million. Genesis Park was founded by Paul Hobby and Peter Shaper and is headquartered in Houston.

“Redwire has established itself as a first-mover consolidator and an acquirer of choice, and we believe its position will be further improved as a public company,” said Mr. Hobby. “We are very excited about Redwire’s growth potential and we look forward to partnering with Peter and his team as they help usher in this new era of space exploration.”

AEI will remain a significant shareholder in Redwire following the completion of this transaction which is expected by the end of the second quarter of 2021.

Jefferies is the financial advisor to Redwire, and Kirkland & Ellis is providing legal services.

© 2021 Private Equity Professional | March 26, 2021

Arcline Acquires Hydrogen Fuel Equipment Maker

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Arcline Investment Management has acquired PDC Machines in partnership with the founding Afzal family.

PDC is a manufacturer of standard and custom specialty gas compression systems that are used in all stages of the hydrogen energy supply chain, including hydrogen production, transportation, storage, and refueling. Typical applications for the company’s products include fueling hydrogen-powered vehicles, forklifts, and backup power systems; filling cylinders and bulk storage tanks with process gases; recycling process gases from renewable sources; and the conversion of wind and solar energy to hydrogen power.PDC was founded in 1997 by President Syed Afzal and today is led by CEO Kareem Afzal and general manager Mateen Afzal. The company has 65,000 square feet of manufacturing space located near Philadelphia in Warminster, Pennsylvania.

“As a family-owned business, choosing the right partner, not just a partner, to support us through our next stage of growth was of the utmost importance,” said Kareem Afzal. “Arcline shares our core values of humility, collaboration, and a growth mindset, as well as a passion for supporting the future of clean energy, making them an ideal partner for the PDC family. The future couldn’t be brighter for PDC.”

“Energy transition is one of our most important investment themes and PDC, alongside their industry partners, are key enablers of the rapidly expanding adoption of hydrogen energy,” said Arcline in a released statement. “We couldn’t be more excited to partner with the Afzal family to support PDC’s transformational growth and the continued adoption of hydrogen energy broadly.”

Arcline makes control investments in companies that have from $10 million to $100 million of EBITDA and enterprise values of up to $1 billion. Sectors of interest include defense and aerospace; infrastructure services; industrial and medical technology; life sciences and specialty materials. Arcline was founded in September 2018 and has offices in San Francisco and New York.

Last month, Arcline closed its second fund, Arcline Capital Partners II LP, with total capital commitments of $2.75 billion. The buy of PDC is Arcline’s second investment for its new fund and follows the buy of ChargePoint Technology, a UK-headquartered maker of containment and sterile transfer valves that are used by pharmaceutical and chemicals companies to handle highly potent active pharmaceutical ingredients and sterile drug products.

Simmons Energy, a division of investment bank Piper Sandler, was the financial advisor to Arcline on the buy of PDC.

© 2021 Private Equity Professional | March 26, 2021