Archives for June 16, 2021

D.A. Davidson Buys Marlin, Creates Top 5 Middle Market Investment Bank

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Investment bank D.A. Davidson has agreed to acquire Marlin & Associates, a technology-focused investment bank.

Marlin & Associates is a provider of strategic and financial advice to buyers and sellers of financial technology, data, analytics companies. Sectors of specific focus include financial, insurance, banking and legal technology as well as governance, risk management, and compliance technology. New York City-headquartered Marlin was founded in 2002 by Ken Marlin and Michael Maxworthy and has advised on more than 200 transactions in 27 countries.

“Our entire team at Marlin & Associates is thrilled to join with D.A. Davidson,” said Mr. Marlin. “We have found a partner who will help us to build on a 20-year history of dedication to client success that we at Marlin & Associates are all quite proud of.

The merger with D. A. Davidson – expected to close in the third quarter – will create the 5th largest middle-market investment banking group in the US with 60 professionals covering eight technology sectors including application software, financial technology, infrastructure software, vertical software, technology-enabled services, digital infrastructure, internet and digital media, and data and analytics.

“This combination significantly elevates our technology practice and brings us the required scale and domain expertise to serve any client in any situation across the fintech landscape,” said Joe Morgan, the head of technology investment banking at D.A. Davidson. “Fintech is one of the fastest-growing sub-sectors within technology – represented by over $60 billion in financing activity and over 3,200 completed M&A deals in the last twelve months alone. We see tremendous opportunity to leverage the Marlin & Associates’ team’s domain expertise across a full-service equities platform, and I am excited to be co-leading this team of professionals.”

At the close of this transaction, Mr. Marlin will serve as the vice-chairman of D.A. Davidson’s technology platform, while Mr. Morgan and Mr. Maxworthy will serve as co-heads of technology investment banking.

“We are excited to welcome our Marlin & Associates colleagues to the team,” said Rory McKinney, the head of investment banking at D.A. Davidson. “We have long admired their established track record as a trusted advisor and sector specialist within the fast-growing financial technology and data & analytics industries. In addition to our full-service equity capital markets capabilities and expanding research platform, we will now have 40 professionals dedicated to advising companies in the technology space, significantly enhancing our ability to provide world-class service to our clients.”

D.A. Davidson’s investment banking division offers both financial advisory and capital markets expertise. The group has transaction experience serving middle market clients worldwide across four industry verticals: consumer, diversified industrials, financial institutions, and technology.

D.A. Davidson is an employee-owned financial services firm offering a range of financial services and advice to individuals, corporations, institutions and municipalities nationwide. Founded in Montana in 1935, with regional headquarters in Great Falls, Denver, Los Angeles, Portland and Seattle, the company has approximately 1,400 employees and offices in 28 states coast to coast.

© 2021 Private Equity Professional | June 15, 2021

Berenson Buys Telehealth Services

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Berenson Capital, a specialist investor in the software and technology-enabled services sector, has acquired Interactive Digital Solutions.

Interactive Digital Solutions (IDS) is a provider of cloud-based high definition video conferencing, streaming video, digital signage, telepresence, and virtual patient observation services and systems used in the healthcare, government and education sectors. The company’s services include consulting, design, installation, management and technical support.

One of IDS’ products is MedSitter, a two-way video/audio observation tool that can monitor up to 10 patients at any given time. The MedSitter product utilizes motion detection, camera control, visual incident logging and includes electronic medical records integration. IDS was founded in 2000 by CEO Tracy Mills and is headquartered northeast of Indianapolis in Noblesville, Indiana.

“More so than ever before, this past year has highlighted the importance of strategically leveraging best-of-breed video solutions to foster communication and collaboration both internally and externally across organizations,” said Mr. Mills. “IDS has thrived by continuously helping clients across all segments overcome a variety of challenges. We look forward to the partnership with Berenson Capital as we continue to invest in our portfolio of next-generation solutions.”

At the closing of the acquisition, David Fetterolf joined IDS as its new executive chairman. Mr. Fetterolf has more than 27 years of experience in healthcare technology and service companies. Most recently he was the president of Stratus Video, a Kinderhook-owned provider of video remote interpretation, over-the-phone interpretation and in-person interpretation services used in the healthcare industry. Stratus Video was sold by Kinderhook in January 2020 to AMN Healthcare Services for $475 million (a 14x adjusted EBITDA multiple).

“IDS’s portfolio of solutions is driving incredible value for their clients across all segments of the market. In healthcare specifically, their proprietary MedSitter solution is revolutionizing how healthcare facilities address reducing patient falls within their facilities,” said Mr. Fetterolf. “I look forward to supporting the company as it continues providing best-in-class solutions into all markets.”

“Within the past year, the COVID-19 pandemic has driven significant interest in and spurred widespread acceptance of telehealth solutions,” said Mohammed Ansari, a managing director and the head of private equity at Berenson Capital. “IDS plays a key role in meeting the needs of this rapidly expanding market through its telehealth communications solutions and the MedSitter patient monitoring tool. We look forward to working with IDS as the company continues to grow in this market.”

“Berenson Capital is committed to partnering with technology companies that have built compelling, differentiated products in large and growing markets,” said Brendyn Grimaldi, a principal at Berenson Capital. “We are excited to partner with Tracy, David and the entire IDS team to continue to expand the company’s portfolio of leading solutions and drive penetration of its industry-leading MedSitter product.”

Berenson Capital is a unit of Berenson & Company, a New York City-based investment bank. The firm invests in software and tech-enabled services companies that have at least $15 million of revenue.

© 2021 Private Equity Professional | June 15, 2021

Rotunda Creates Crane Distribution Giant

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Rotunda Capital Partners has formed American Equipment Holdings (AEH) to combine American Equipment, Pacific Crane & Hoist and Allied Crane. This transaction forms one of the largest independent distributors of overhead crane and hoist products and services in the Western US.

AEH provides new and replacement equipment and parts, as well as installation, inspections, preventative maintenance, repair services and training. The company sells hoist and crane products made by Detroit Hoist, Columbus McKinnon, ACCO, R&M, Demag, Gorbel, Spanco, IMS, Harrington, and Conductix.

With the close of the transaction, AEH will now serve over 2,000 local, regional and national customers that are active in the industrial, automotive, mining, public utilities, military, aerospace, defense and energy sectors; and will operate through 14 locations throughout Arizona, California, Colorado, Idaho, Nevada, New Mexico, Utah and Wyoming.

American Equipment was founded in 1969 by Ken Zimmerman and is based in Salt Lake City; Pacific Crane & Hoist was founded in 2007 by Michael Perera and is based in Brea, California; and Allied Crane was founded in 1976 by Dave Costa and is based in Pittsburg, California.

Post close, Adam Zimmerman, the CEO of American Equipment (and the son of its founder), will retain a significant equity interest in the company and will lead the combined business; Michael Perera will also retain an equity interest and he will continue to be active in the business; and Dave Costa will continue with the company as a special advisor.

“This transaction continues Rotunda’s foundation of acquiring family and founder-owned companies and partnering with strong management teams,” said Corey Whisner, a partner at Rotunda. “We look forward to working alongside management to leverage the combined company’s geographic footprint and comprehensive solution capabilities to expand upon its existing value-proposition, while also accelerating expansion into new geographies and markets.”

“Over the last half-century, American Equipment’s team has built a leading regional equipment and service business and they are well-positioned for substantial future growth,” said Dan Lipson, a partner at Rotunda. “In addition to supporting the acquisitions of Pacific Crane & Hoist and Allied Crane, we are committed to helping the company build a business of national scale through both organic growth and additional acquisitions.”

Rotunda invests in businesses with enterprise values of $30 million to $150 million. Sectors of interest include asset-light logistics, value-added distribution, specialty finance, and industrial and business services.

“This is an incredible opportunity for American Equipment,” said Mr. Zimmerman. “From our first meeting, it was clear that Rotunda shared similar views as to the foundation we have created and what our company could achieve. Through this partnership, our culture and high-touch customer experience that we are known for won’t change, but we gain the expertise and capital to grow in a market with significant opportunity.”

“Rotunda has been looking for an investment in material handling distribution and service for some time,” said Ryan Aprill, a vice president at Rotunda. “The combination of American Equipment with Pacific Crane & Hoist and Allied Crane brings together more than 100 years of collective industry experience and creates the premier consolidation platform in the highly fragmented North American overhead crane and hoist market.”

Rotunda was founded as an independent sponsor in 2009 and is led by managing partner John Fruehwirth, and partners Dan Lipson, Corey Whisner, and Bob Wickham. In January 2021, Rotunda closed its debut institutional private equity fund, Rotunda Capital Partners Fund II LP, with more than $195 million of capital commitments. Rotunda is headquartered in Bethesda, Maryland with an additional office near Chicago in Evanston, Illinois.

© 2021 Private Equity Professional | June 15, 2021