Archives for April 1, 2021

Gridiron’s AML Continues International Add-On Spree

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Gridiron Capital has once again closed an international add-on for its AML RightSource platform with the buy of Passcon GmbH.

AML is a Cleveland-based provider of anti-money laundering, Bank Secrecy Act, and other financial crimes reporting and compliance services to both bank and non-bank financial institutions.

AML was founded in 2004 to assist small and medium-sized financial institutions in meeting regulatory compliance requirements – many new laws were enacted after the September 11, 2001 terrorist attacks – related to reporting suspicious financial activity, specifically criminal and terrorist-related. Since 2004, financial regulations have grown ever larger and more complex.

Gridiron acquired AML in September 2020 and in March 2021 it completed the add-on acquisition of Arachnys Information Services, a London-headquartered provider of “know your customer” (KYC) and anti-money laundering compliance services.

Today, AML  is one of the largest providers of anti-money laundering services in the world with more than 1,350 analysts and subject matter experts in 7 offices in Ohio (2), Phoenix, Buffalo, New York City, Toronto and London.

Passcon’s anti-financial crime services include KYC, transaction monitoring, sanctions, and investigations. The company has 300 employees and is headquartered in Hamburg, Germany with additional offices in New York City, Jacksonville, London, Singapore, Vienna, Copenhagen, Krakow, Zurich, and Frankfurt.

Passcon was founded in 2016 by Corinna Reibchen and post-closing she is joining AML as a managing director to focus on international sales and operations.

“We are thrilled to bring Corinna and the entire Passcon team on board to further expand our footprint and enhance our international delivery capabilities,” said AML CEO Frank Ewing. “Following the recent acquisition of Arachnys, this combination will allow us to provide a broader range of cost-effective, tech-enabled services, cementing AML as the leading provider of financial crimes compliance solutions around the globe.”

“The acquisition of Passcon is another significant step for AML as it executes on its strategic plan of expanding internationally, adding adjacent service offerings, and increasing tech-enablement,” said Will Hausberg, a managing director at Gridiron.

“We are impressed with the global business that Corinna and her team have built and are excited to welcome them to AML,” said Tom Burger, a co-founder and managing partner at Gridiron.

Gridiron invests in manufacturing, service, and specialty consumer companies with enterprise values from $75 million to $575 million and EBITDA from $8 million to $50 million. Sectors of interest include branded consumer, business-to-business and business-to-consumer services, and niche industrial.

New Canaan, Connecticut-based Gridiron held a hard-cap and oversubscribed closing of its largest fund, Gridiron Capital Fund IV LP, in December 2020 with $1.35 billion of capital.

© 2021 Private Equity Professional | April 1, 2021

ACP Closes Second Animal Health Platform

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Align Capital Partners has acquired Custom Veterinary Services (CVS), a formulator and contract manufacturer of animal health products for dogs, cats, and horses.

The services of CVS include product identification, formulation development, packaging, and production. Within production, the company’s capabilities include liquids, powders, soft chews, and tablets for nutritional supplements, dermatological products, and grooming products.

Many of the company’s customers are animal health organizations, veterinary pharmaceutical companies, and e-commerce-focused pet care and nutrition brands.

In 2019, CVS received the Supplier of the Year award from the National Animal Supplement Council. CVS was founded by Ruben Martinez in 2005 and operates an FDA-registered facility near Miami in Gladeview, Florida.

At the closing of this acquisition, Worth Turner has been named the new CEO of CVS. “Ruben and his family have built CVS into a market-leading contract manufacturing organization (CMO) with innovative R&D capabilities. I’m excited for the opportunity to partner with the entire CVS team to create the best-in-class CMO for the animal health sector,” said Mr. Turner.

“Our customers are growing rapidly, and we sought a partner to help us expand and further meet our customers’ needs,” said Mr.  Martinez. “ACP and Worth have a successful track record of helping companies like CVS grow and share our vision of being the best contract manufacturing partner for the animal health industry.”

Prior to joining CVS, Mr. Turner was the president of Colorado Quality Products, a Denver-based contract manufacturer of hair care, skincare, and other personal care products. Colorado Quality Products was acquired by Elevation Labs, a portfolio company of Clearview Capital, in July 2018. Mr. Turner led Colorado Quality Products from July 2014 through September 2020.

“We’re enthusiastic about the combined partnership of Ruben, Worth, and ACP,” said Rob Langley, a managing partner at ACP. “CVS is at an inflection point where additional capital and growth-related expertise will help drive the leadership team’s goal of becoming the best provider in the sector. We are thrilled to partner with the team and Worth in pursuit of this goal.”

The buy of CVS is ACP’s second investment in the animal health sector and follows its 2020 acquisition of VetEvolve, a Richmond, Virginia-based owner and operator of veterinary clinics primarily on the East Coast and Mid-Atlantic regions.

ACP makes control investments in companies that have from $3 million to $10 million of EBITDA. Sectors of interest include business services, technology, specialty manufacturing, distribution, and healthcare. In addition to Mr. Langley, the ACP transaction team for the buy of CVS included Operating Partner Bill White, Principal Jack Parks, Vice President Kurt Smentek, and Associate Aaron Lewis.

ACP closed its second fund, Align Capital Partners Fund II LP, at its hard cap of $450 million in February 2020. Align was founded in 2016 by managing partners Steve Dyke, Robert Langley, and Chris Jones – all formerly of The Riverside Company – and has offices in Cleveland and Dallas.

CVS was advised on the transaction by BellMark Partners, a Boston and Cleveland-based investment bank.

© 2021 Private Equity Professional | April 1, 2021

Atlas’ Fourth Fund is “One and Done”

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Atlas Holdings has held a first, final, and hard cap close of its fourth private equity investment fund, Atlas Capital Resources IV LP, with $3.1 billion of capital.

Atlas began fundraising for Fund IV in November 2020 and its institutional limited partners include a range of foundations, endowment funds, public and private pension funds and family offices.

Atlas was founded in 2002 by managing partners Andrew Bursky and Tim Fazio and is headquartered in Greenwich, Connecticut. The firm’s earlier fund, Atlas Capital Resources III LP, closed at its hard cap of $1.675 billion in April 2018.

“When we started Atlas, we never anticipated that it would become what it is today, and we are extremely humbled by the confidence in our team that this fund represents,” said Mr. Fazio. “Raising a fund nearly double the size of our last is not simply a recognition of our track record as investors and operators.  It is an affirmation of the extraordinary people across the world that have consistently put us in a position to win.”

Atlas is an industrial holding company that has more than 23 platform companies operating in a wide range of sectors with more than $10 billion in total revenues, more than 40,000 employees, and more than 250 facilities worldwide. Some of the sectors that Atlas invests in are aluminum processing, automotive, building materials, food manufacturing and distribution, packaging, paper, power generation and wood products.

“Atlas has established a well-defined and highly differentiated approach to both investing capital and supporting our existing businesses. That approach has remained constant for decades and has enabled our private equity funds to systematically deliver value to our investors,” said Mr. Bursky. “We are extremely grateful for the continued strong support from our long-standing institutional partners as well as the tremendous demand from a large group of new partners from across the globe.”

In addition to raising Fund IV, Atlas has been busy with transactions. In March, Atlas sold Merchants Metals, an Atlanta-headquartered national distributor of fence systems, to The Sterling Group. Atlas acquired Merchants Metals in 2015 through a corporate carve-out from Oldcastle Building Products. A few months earlier in December 2020, Atlas acquired LSC Communications, one of the largest producers of books in the United States and a manufacturer and distributor of magazines and catalogs. LSC, headquartered near Chicago in Warrenville, Illinois, was formed in 2016 as a spinoff from R.R. Donnelley and was acquired by Atlas through a bankruptcy court supervised sales process.

“As we look ahead, Fund IV will allow our exceptional team to take the next step in Atlas’ evolution and seize exciting new opportunities. While we have grown and will continue to do so, we will stay true to our roots, investing in sectors where we have developed expertise and partnering with our leadership teams to create great businesses over the long term,” said Jacob Hudson, an Atlas managing partner.

Capstone Partners was the placement agent on Fund IV and Proskauer Rose provided legal services.

© 2021 Private Equity Professional | April 1, 2021

Guardian Names New Partner

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Guardian Capital has promoted Christopher Fugaro to partner. Mr. Fugaro joined Guardian as an investment professional in 2010.

Guardian makes control investments in lower middle-market private companies located primarily in the United States that have annual revenues between $20 million and $100 million and EBITDA between $3 million and $9 million. Sectors of interest include consumer products, niche manufacturing, and specialty business services.

Guardian was founded in 2008 by managing partners Scott Evans and Peter Haabestad and is headquartered in the Philadelphia suburb of Wayne, Pennsylvania.

Since joining Guardian, Mr. Fugaro created and implemented the firm’s deal origination strategy and he has directly sourced 13 investments, including both platform and add-ons, and today he oversees all transaction sourcing strategies for the firm.

“We realized in the early days of forming Guardian we needed a deal professional dedicated to building the Guardian brand, maintaining external relationships with a broad spectrum of deal source providers and business owners, and continuing to evolve our deal sourcing capabilities,” said Mr. Haabestad. “Chris stepped up in this role enabling Guardian to further differentiate itself in the lower middle market.”

“Competition to source high-quality deals has always been fierce and the current COVID-19 restrictions have only highlighted the value of a formal deal sourcing strategy,” said Mr. Evans. “The deal sourcing engine and long-term relationships that Chris has established for the firm continue to yield actionable deals in sectors where we want to put dollars to work during the current challenging environment.”

In addition to Mr. Evans and Mr. Haabestad, the partners of Guardian now include Adrian Ironside, Ryan Northington, Thomas Caruso, and Mr. Fugaro.

© 2021 Private Equity Professional | April 1, 2021