Archives for June 21, 2021

Clearlake’s Unifrax Inks Big Public Add-On

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Unifrax, a portfolio company of Clearlake Capital, has agreed to acquire publicly traded Lydall at an enterprise value of approximately $1.3 billion. Clearlake acquired Unifrax from American Securities in October 2018.

Lydall (NYSE: LDL) designs and manufactures specialty filtration media, industrial thermal insulation products, and acoustical barriers. The company’s products are used by original equipment manufacturers, and Tier 1, Tier 2, and Tier 3 customers that are active in the industrial, life sciences, automotive, food and beverage, biopharmaceutical, and medical sectors.

Manchester, Connecticut-headquartered Lydall, led by CEO Sara Greenstein, was founded in 1879 and has 23 manufacturing facilities around the world.

In FY 2020, Lydall had revenues of $764 million and EBITDA of $67 million. With an enterprise valuation of $1.3 billion, this equates to a 19.4x EBITDA valuation multiple. To see a copy of Lydall’s May 2021 investor presentation click HERE.

“We are excited about the combination of Lydall and Unifrax. With this transaction, we are creating a leader in specialty filtration and advanced materials with over 250 years of combined expertise and experience delivering innovative and compelling solutions to customers worldwide,” said Ms. Greenstein.

Unifrax is a supplier of specialty fibers and inorganic materials that are used in emission control, thermal management, filtration, battery and fire protection applications. The company’s ceramic and microfine glass fiber products are sold worldwide, primarily to more than 4,000 industrial, commercial and automotive customers.

Unifrax operates 31 manufacturing facilities in the United States, Europe, the Middle East, Russia, Asia, South Africa and Latin America. The company, led by CEO John Dandolph, has more than 2,300 employees and is headquartered near Buffalo in Tonawanda, New York.

“The combination of Unifrax and Lydall creates a global specialty materials platform with new cutting edge technologies in advanced filtration, electric vehicle battery systems, and energy-saving applications,” said Mr. Dandolph. “The addition of Lydall’s people, technologies, and assets to the Unifrax portfolio will help accelerate our innovation pipeline and creates a world-class platform capable of solving the world’s most pressing energy consumption, environmental and filtration challenges.”

“We have long admired Lydall and what it would bring to our platform investment in Unifrax, and we could not be more excited about partnering with the company and its team to build one of the world’s leading global specialty materials platforms,” said Managing Partner José Feliciano and Partner Colin Leonard in a released statement. “We have supported Unifrax’s development of new technologies over the last few years that have the potential to change how we think about the industries in which both Unifrax and Lydall operate and inform their futures. The addition of Lydall to the Unifrax portfolio and its strong capabilities in advanced filtration creates a global platform with significant scale that together can accelerate each company’s respective compelling growth plans.”

Clearlake invests in industrials and energy; software and technology-enabled services; and consumer sectors. The firm was co-founded by Mr. Feliciano and Behdad Eghbali in 2006 and is headquartered in Santa Monica, California with an additional office in Dallas, Texas.

In April 2020, Clearlake held a hard cap and oversubscribed final close of its sixth private equity fund, Clearlake Capital Partners VI LP, with more than $7 billion in commitments. Clearlake currently has approximately $39 billion of assets under management.

Morgan Stanley & Co. and J.P. Morgan were the financial advisors to Unifrax, and BofA Securities was the financial advisor to Lydall.

The buy of Lydall by Unifrax is expected to close in the second half of 2021.

© 2021 Private Equity Professional | June 22, 2021

Platinum Sews Up Singer

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Platinum Equity has agreed to acquire a majority stake in SVP-Singer Holdings (“SVP Worldwide”), the world’s largest consumer sewing machine company.

Singer was formed in 1851 by Isaac Singer and Edward Clark. The company began marketing its consumer sewing machines in 1855 and won first prize at the Paris world’s fair that year becoming one of the largest manufacturers of consumer sewing machines by 1860. The company filed for bankruptcy in 1999 and was acquired by Kohlberg & Company in 2004. In 2006, Kohlberg combined Singer with Swedish sewing machine manufacturer VSM Group (Viking Sewing Machines) and in 2018, SVP Worldwide was sold by Kohlberg to Ares Management.

SVP Worldwide accounts for one of every three consumer sewing machines sold worldwide through three brands – Singer, Viking, and Pfaff.

At the completion of Platinum’s buy – expected during the third quarter – both CEO Carl-Martin Lindahl and Executive Chairman Stan Rosenzweig will continue in their roles with the business.

“We have made good progress reinvigorating our product development capabilities and redoubling our commitment to our dealer and retail partners, but there is a lot more work to be done,” said Mr. Lindahl. “We are excited about the opportunity to work with the Platinum team, which will bring new perspectives and expertise to the table and further expand our playbook.”

“Carl-Martin, Stan and the entire SVP Worldwide team have done an excellent job refocusing the business and setting the stage for the next chapter,” said Jason Price, a managing director at Platinum. “We fully support the investments they’ve made, and we will bring additional financial and operational resources to bear to help accelerate their efforts.”

Nashville, Tennessee-headquartered SVP Worldwide has regional offices in Milan, Shanghai, and Mexico City and manufacturing facilities across Asia and Latin America. The company’s estimated annual revenue is over $500 million and employs more than 2,000 people worldwide.

“An upcoming slate of exciting new products positions SVP Worldwide brands to gain market share, and we also believe there are additional means for growth through add-on acquisitions, particularly in sewing-related accessories and other products,” added Mr. Price.

Platinum Equity specializes in mergers, acquisitions, and operations, currently operating with more than $25 billion AUM. Platinum was formed in 1995 by Tom Gores.

© 2021 Private Equity Professional | June 22, 2021

GI Closes Fund VI

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Middle-market investor GI Partners has held an oversubscribed and above target closing of GI Partners Fund VI LP with $3.9 billion in total commitments. The firm’s earlier fund closed at its hard cap in November 2017 with $2.8 billion in capital.

Limited partners in Fund VI include sovereign wealth funds, pensions, financial institutions, investment management firms, and family offices from 15 countries.

“Our limited partners have demonstrated conviction in our resilient strategy, team and leadership, and operating principles,” said Philip Yau, a managing director at GI Partners. “We are grateful for their support and thank them for the opportunity to be stewards of their capital.”

GI’s new fund continues the firm’s focus on control equity investments of up to $900 million in companies with enterprise values up to $2 billion that are active in the IT infrastructure, healthcare, software, and services sectors. GI’s private equity team has over 35 investment professionals and is led by Managing Directors Hoon Cho and Travis Pearson.

“Our firm’s 20-year focus on investing in downside-protected growth companies has proven as effective in the past 15 months as it has in prior economic crises,” said Messrs. Cho and Pearson in a released statement. “Throughout the recent challenging environment, our team worked closely with our portfolio companies to ensure they not only withstood the impact of COVID-19 but continued to grow. The private equity group has remained active, adding five new platform investments and exiting three companies while focusing on developing a strong portfolio that builds on our team’s proven track record of value creation.”

Fund VI began investing in November 2020 with the buy of Valet Living, a Tampa-based provider of multi-family residential services, from Ares Management and Harvest Partners. Valet Living’s services include doorstep waste and recycling collection, maintenance services, apartment cleaning, apartment turns, porter services, pet services, and other app-driven on-demand amenity services. The company’s customers include both property managers and residents, and it serves more than 1.6 million homes across 40 states.

Following the acquisition of Valet Living, in April 2021 the firm acquired Aras, a Massachusetts-based provider of a cloud-based IT platform that is used for digital industrial applications – product development, systems engineering, manufacturing, and maintenance – in the automotive, aerospace & defense, high tech, and industrial sectors.

GI has also been active on the sale side having completed exits for portfolio companies MRI Software, an Ohio-based provider of commercial and residential real estate software applications; Consilio, a Washington DC-headquartered provider of eDiscovery and outsourced legal services; and Logibec, a Montreal-based provider of clinical and administrative information systems to healthcare companies.

“As we celebrate our firm’s 20th anniversary, we move forward with a deep team of dedicated professionals who are integral to our continued success,” said Rick Magnuson, GI’s executive managing director and founder. “We remain committed to delivering value for our investors by utilizing our disciplined and differentiated strategy that we have refined since our founding.”

Park Hill Group was engaged as the placement agent for Fund VI and Kirkland & Ellis provided legal services.

GI Partners was founded in 2001 and is headquartered in San Francisco.

© 2021 Private Equity Professional | June 22, 2021

Palladium Creates Position, Hires Business Development Director

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Palladium Equity has added Meahgan O’Grady to its team as Director of Business Development, a newly-created position.

Through her past work experience, Ms. O’Grady brings to Palladium numerous relationships across multiple channels, including development teams of both public and private corporations, investment banks and proprietary sources including entrepreneurs, industry executives, advisors and private wealth managers. Before joining Palladium, Ms. O’Grady was vice president of business development at KPS Capital Partners where she focused on mid-cap transactions. Previously, she was the head of originations at Long Point Capital from 2017 to 2020.

Earlier in her career, she was a senior associate at Goldman Sachs and a senior analyst with Ernst and Young. Ms. O’Grady has her MBA from Duke University and her undergraduate degree from William and Mary.

Ms. O’Grady will work with all of Palladium’s transaction teams on sourcing and origination and she reports to Partner Leon Brujis.

“We’ve had a very busy first half of 2021. As we look to the future and continue to build on this momentum, we are thrilled that Meahgan has joined our team,” said Mr. Brujis. “She brings to Palladium a wealth of proven origination and deal sourcing strategies, insights and experience, particularly in the mid-market, our sweet spot. We are confident that, in working with our deal teams, she will help us continue to identify exciting new opportunities where we will seek to deliver strong outcomes to our limited partner community and our other important stakeholders.”

“As one of the nation’s oldest and largest minority-owned private equity firms, Palladium serves as a model for the future of the industry. I am very excited to be joining this exceptional firm,” said Ms. O’Grady. “Deal sourcing is one of the most important and critical foundations of a successful private equity firm. I have been impressed by Palladium’s practice. I look forward to helping the firm employ the latest strategies to build on their strong origination practice.”

New York City-based Palladium invests from $50 million to $150 million of equity in companies that have $10 million to $75 million of EBITDA. Sectors of interest include consumer, services, industrials and healthcare, and Palladium specializes in investing in companies that operate in the US Hispanic market. Since its founding in 1997, Palladium has made 36 platform investments and 140 add-on acquisitions.

© 2021 Private Equity Professional | June 22, 2021

EverArc to Buy SK Capital’s Fire-Fighting Products Maker

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EverArc Holdings, a publicly-listed acquisition company, has agreed to acquire Perimeter Solutions, a portfolio company of SK Capital, in a transaction valued at approximately $2 billion.

Perimeter was formed by SK Capital in March 2018 to acquire the fire safety and oil additives businesses of Israel Chemicals. The fire safety business supplies chemicals and services for fighting wildfires and foams to extinguish fires. Perimeter’s oil additives business provides phosphorus pentasulfide, an inorganic compound that is used in lube oil additives, pesticides and mining chemicals. Perimeter, led by CEO Edward Goldberg, is headquartered west of St. Louis in Clayton, Missouri.

In FY 2020, Perimeter had revenues of $340 million, a gross profit of $162 million, and an EBITDA of approximately $136 million (a 40% EBITDA margin). With an enterprise valuation of $2 billion, this equates to a 14.7x multiple of EBITDA.

“We have been delighted to partner with the management and employees of Perimeter over these past three years,” said Aaron Davenport, a managing director of SK Capital. “Since our acquisition, we have successfully transitioned what was previously a non-core segment within a public company into a thriving standalone organization, with an uncompromising commitment to the highest quality, safety, and reliability standards. The company has grown significantly during ‎our ownership, driven by investments in innovation and commercial excellence, as well as five highly strategic add-on acquisitions.”

Upon closing of the acquisition by EverArc, which is expected during the fourth quarter, Mr. Goldberg and other members of the company’s senior management team will continue to lead Perimeter, and Nicholas Howley and William Thorndike, Jr., the founders and co-chairmen of EverArc, will serve as co-chairmen of the business.

Mr. Howley is the former CEO of TransDigm (NYSE: TDG), a Cleveland-headquartered designer, producer and supplier of aircraft components. TransDigm was founded in 1993 by Mr. Howley, Douglas Peacock, and Kelso & Company, to acquire four aerospace companies – Adel Fasteners, Aero Products Component Services, Controlex Corporation and Wiggins Connectors – from IMO Industries. Mr. Thordike is a founding partner of Housatonic Partners, a Boston and San Francisco-based private equity firm.

“EverArc’s goal is to give our shareholders private equity-like returns with the liquidity and long-term focus of a public market,” said Mr. Howley and Mr. Thorndike in a released statement. “To do so, we target specific economic criteria including recurring revenue streams; long-term secular growth tailwinds; high-value yet low-cost products and services; high returns on tangible capital; and accretive growth through acquisitions. We believe that Perimeter is an excellent fit with our target criteria and look forward to supporting the company’s growth objectives.”

“Perimeter’s comprehensive, safe and effective wildfire prevention and suppression technology is more critical than ever as the severity of wildfires, unfortunately, shows a steady increase around the world,” said Haitham Khouri, a founder of EverArc. “As a public company, Perimeter will have even greater, long-term access to additional debt and equity capital, and we look forward to partnering with Eddie and the rest of Perimeter’s talented team in the company’s next phase of growth.”

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 capital of $2.1 billion. SK Capital was co-founded by Barry Siadat and Jamshid Keynejad and is based in New York City.

EverArc (LSE: EVRA) was formed in November 2019 and is headquartered in Brooklyn, New York.

Piper Sandler and Morgan Stanley were the financial advisors to EverArc.

© 2021 Private Equity Professional | June 18, 2021

Topspin Closes New Consumer Fund at Hard Cap

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Topspin Consumer Partners has held a hard cap and final closing of Topspin Consumer Partners II LP with $205 million of capital.

The firm’s new fund was oversubscribed and was backed by both existing investors and new limited partners including funds of funds, global asset managers and family offices.

Topspin makes control investments of $15 million to $35 million in middle-market consumer businesses with a specific interest in health and wellness, personal care and beauty, food and beverage, household goods, pet, and children’s products. The firm is headquartered in Mamaroneck, New York.

“Topspin appreciates the support from the investment community that enabled this successful fundraise,” said Leigh Randall, the managing partner of Topspin. “The strong performance of our portfolio companies during the uncertain conditions of the coronavirus pandemic was critical in maintaining and furthering investor confidence in our ability to create value in the consumer sector. Our experience and prior successes in the digital marketplace have positioned us favorably to take advantage of an accelerating trend in our industry.”

Topspin emphasizes strategic and operational development for its investments including digital marketing and e-commerce, new product development, improved distribution, and go-to-market strategies. In addition to its transactional capabilities, the Topspin investment team has significant operating experience and is supported by a consumer-focused board of advisors.

Topspin’s new fund has already acquired three platforms with the buys of reCommerce, a Florida-based Amazon agency that works with companies and brands to increase sales on the Amazon e-commerce platform (May 2020); and Japonesque, a California-based developer and marketer of beauty products (September 2019). According to Mr. Randall, Topspin’s third platform was just recently acquired, and the firm has not yet announced the transaction.

Topspin’s most recent exit was the March 2019 sale of JD Beauty, a Fund I portfolio company acquired in October 2015, to Goody Products, a portfolio company of ACON Investments. JD Beauty is a Long Island-based designer and marketer of branded hair brushes and beauty care accessories.

Topspin engaged MVision Private Equity Advisers as its placement agent on this fundraise, and Goodwin Procter provided legal services.

© 2021 Private Equity Professional | June 18, 2021

Olympus’ Pet Food Platform Expands to Colorado

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3D Corporate Solutions, a portfolio company of Olympus Partners, has acquired All American Pet Proteins (AAPP).

3D Corporate develops, processes, distributes and sells a variety of pet food products using chicken, turkey, beef, lamb, and other protein sources. The company also produces palatants – ingredient systems that are designed to make pet foods, treats, and supplements taste better. 3D operates four manufacturing facilities in Missouri, Arkansas, North Carolina and South Carolina. The company was founded in 2002 and is headquartered 40 miles east of Joplin in Monett, Missouri. Olympus acquired 3D Corporate in May 2019.

Each week, AAPP produces nearly three million pounds of fresh and frozen proteins including beef, lamb, bison, and buffalo. The company was founded in 2014 by John Landers and Craig Broughton, and is headquartered north of Denver in Greely, Colorado.

“John and Craig have built an impressive business and this acquisition is very complementary to the products and capabilities we currently offer,” said Scott Clawson, the CEO of 3D. “We are excited to partner with the AAPP team to grow the combined business”.

Kirkland & Ellis advised 3D on this transaction. The Kirkland team was led by corporate partners Karen Flanagan and James Faley and associates Jeremy Mandell and Marina Yarnoff.

Olympus invests in a range of industries but has a specific interest in business services, consumer products, healthcare services, financial services, industrial services and manufacturing. In December 2017, the firm held a final closing of its seventh institutional private equity fund, Olympus Growth Fund VII LP, with an oversubscribed $3 billion of capital commitments. The firm was founded in 1988 and is based in Stamford, Connecticut.

© 2021 Private Equity Professional | June 17, 2021

LongRange Expands Team

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LongRange Capital has added several new members to its investment team with the hirings of Sunny Patel as a senior principal, Taylor Elliott as a senior associate, and Austin Marcus as an associate.

“Our investment pipeline continues to grow,” said Bob Berlin, the managing partner of LongRange Capital. “I’m excited to welcome Sunny, Taylor and Austin to the LongRange team to help the firm and its investors capitalize on the opportunities we’re seeing in the market.”

Mr. Patel joined LongRange in April 2021 after working with Mr. Berlin for a brief period at New York-based Navab Capital Partners. Earlier in his career, he was with 3G Capital and for several years he was the general manager of Kraft Heinz’s US sauces and coffee businesses which had been acquired in 2013 and 2015 by 3G and Berkshire Hathaway. Prior to 3G, Mr. Patel was at KKR where he was active with the firm’s consumer, media and communications investments. Mr. Patel has his undergraduate degree in finance and pre-medicine from New York University.

Mr. Elliott joined LongRange last year after earning his MBA from Wharton. From 2016 to 2018 he was an associate with L Catterton and earlier he was an investment banking analyst at Barclays in its financial sponsors group. Mr. Elliott has his undergraduate degree in economics from Duke University.

Mr. Marcus joined LongRange from Cerberus Capital Management in March 2021. Prior to Cerberus, he was an investment banking analyst at Goldman Sachs in its technology, media and telecom group. Mr. Marcus has his undergraduate degree in business administration from Bucknell University.

LongRange makes both control and minority investments of $50 million to $400 million in middle-market businesses that are active in the non-discretionary consumer, value-added industrials, and information and data services sectors. LongRange was founded by Mr. Berlin in 2019 and is headquartered in Stamford, Connecticut.

© 2021 Private Equity Professional | June 18, 2021