Archives for December 16, 2021

New Harbor’s Third Fund Backs IndeVets

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New Harbor Capital has made an equity investment in IndeVets, a tech-enabled provider of veterinarian staffing services.

IndeVets uses its proprietary scheduling technology to provide staffing services to veterinary hospitals. Through its scheduling platform, the company’s veterinarians – IndeVets currently has more than a hundred veterinarians that are IRS Form W-2 employees – have full flexibility in choosing when and where they work across its network of over 1,300 veterinary hospitals. IndeVets is based in Philadelphia and was founded in 2017 by CEO Michael Raphael.

New Harbor invested in IndeVets based on its strong value proposition to its partner hospitals, its technology-enabled services and proprietary software, experienced senior management team, and the positive industry trends within the animal health market.

New Harbor has prior experience investing in the animal health sector. In June 2016, the firm acquired New Jersey-based Wedgewood Pharmacy, one of the largest veterinary drug compounders in the United States. After a 4.5 year hold, and a tripling of revenue, the firm sold Wedgewood to Partners Group, a large Switzerland-headquartered investment firm.

After its exit of Wedgewood, New Harbor sharpened it animal health and wellness investment thesis to focus on companies that provide services to veterinary clinics rather than participating in the highly competitive veterinary clinic consolidation strategy.

According to New Harbor, the United States veterinary services market is estimated at $50 billion and is growing at about 3% to 4% per year. Driving this growth is the “humanization of animals” trend of consumers spending more money on their pets, pets living longer, and modest increases in the pet population. The largest challenge facing the veterinary industry today is a growing imbalance between the demand for veterinary services and the supply of veterinarians, with the number of available jobs outstripping total applicants on a five-to-one ratio. This supply-demand imbalance is furthering the need for institutionalized staffing solutions for veterinarians as hospitals struggle to hire and maintain quality talent.

“We are thrilled about this partnership potential,” said Mr. Raphael. “New Harbor’s track record of scaling animal health and provider-centric companies will be extremely valuable as we expand IndeVets’ reach to new markets and help even more veterinarians reach their utmost potential.”

“We look forward to partnering with the IndeVets team,” said Jocelyn Stanley, a partner at New Harbor. “Their work sits at the unique intersection of animal health and tech-enabled services, which is in great alignment with our firm’s focus areas. New Harbor also has a long track record of partnering with clinician-centric healthcare businesses and IndeVets’ ‘vets first’ approach is unmatched in the industry. The company has incredible growth opportunities, and we look forward to helping them continue to expand and innovate.”

Chicago-based New Harbor invests from $10 million to $40 million of equity in education, healthcare, and tech-enabled services companies that have from $3 million to $15 million of EBITDA. In February 2021, after just three months of fundraising, New Harbor held a hard cap close of its third private equity fund, New Harbor Capital Fund III LP, with $362 million of capital.

New Harbor was co-founded in February 2013 by Tom Formolo and Ed Lhee, long-time partners at CHS Capital.

© 2021 Private Equity Professional | December 16, 2021

Just in Time for the Holidays, WILsquare Goes Quilting

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WILsquare Capital has acquired TekBrands, a provider of equipment and services to the quilting and crafting sector.

TekBrands is a designer and e-commerce-based marketer of a range of branded products sold and used by quilting and crafting enthusiasts and retailers. The company’s products include electric and manual fabric cutters, cutting dies, quilting patterns, cutting mats, sewing supplies, storage trays and cabinets. TekBrand’s company-owned brand names include AccuQuilt, AccuCut, Custom Shape Pros, and MemoryStitch.

Omaha, Nebraska-headquartered TekBrands was founded in 1990 by the husband and wife team of Steve and Lynette Nabity, and today is led by CEO Mary Kay O’Connor-Wente.

“The leadership team and I are pleased to partner with WILsquare,” said Ms. O’Connor-Wente. “We immediately knew they were the best partner to take us into the next level of growth. The culture and values of WILsquare fit perfectly with TekBrands, and we are excited about their commitment to support the future growth of the business.”

“We are delighted to be a part of the TekBrands story and to have the opportunity to invest behind this talented management team,” said Drew Caylor, a managing director at WILsquare. “The company has succeeded, not only in engineering great products but also in creating a multi-channel platform and digital ecosystem that engages and inspires the creativity of quilters and crafters.”

“I am thrilled to see WILsquare as the new partner for TekBrands,” said Mr. Nabity. “WILsquare immediately recognized and values what the leadership team has built and shows a clear commitment to continued growth. I’m excited for the future of the organization and know I have found the right partner for the business going forward.” In partnership with WILsquare, Mr. Nabity will continue with the company as a member of its board of directors.

WILsquare invests in businesses that are located in the Midwest and South that have EBITDA of $3 million to $10 million. Sectors of interest include business services, technology infrastructure and services, value-added distribution, niche manufacturing, and internet and catalog-based enterprises.

“The Midwestern values and distinct culture of continuous improvement at TekBrands resonate strongly with us,” said Andrew Scharf, a director at WILsquare. “We look forward to preserving and expanding upon the legacy that Steve and the management team have built over more than three decades.”

In July 2019, after a quick three months of fundraising, WILsquare held a final and above target closing of WILsquare Capital Partners Fund II LP with total capital commitments of $190 million.

TekBrands is the third platform investment for WILsquare’s second fund and is the third investment for WILsquare this year. The two earlier 2021 transactions were the April add-on acquisition by Crown Products (acquired by WILsquare in November 2019) of Tri-State Wholesale Flooring, a South Dakota-based distributor of flooring products; and the September buy of Rock Energy Systems, a Wisconsin-based provider of heating and cooling equipment.

© 2021 Private Equity Professional | December 16, 2021

Playground Equipment Maker Switches Sponsors

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The Halifax Group has sold BCI Burke, a manufacturer of commercial playground equipment, to Bertram Capital. Halifax acquired BCI Burke from Incline Equity Partners in June 2017. The buy of BCI Burke is the sixth investment completed by Bertram for its fourth fund.

BCI Burke’s products include playground and park equipment such as climbers, slides, swings, park furniture and sports equipment. The company sells its products to municipal parks and recreation departments, schools, daycares, churches, apartment complexes, childcare centers and children’s museums.

BCI Burke was founded by John Burke in 1920 as the J.E. Burke Company, a provider of weather-stripping services and designer radiator furniture. In the mid-1920s, after a family friend asked Mr. Burke to fabricate a backyard play slide, the company entered the playground equipment industry. Today, BCI Burke is led by CEO Michael Phelan and is headquartered in Fond du Lac, Wisconsin.

“Burke has established itself as a category leader in premium, single-brand commercial play equipment,” said Kevin Yamashita, a partner at Bertram Capital. “The company’s successes reflect their innovative product offering and best-in-class customer support, as well as their targeted go-to-market strategy in the United States and internationally. We recognized a strong cultural fit during the sale process and are honored to partner with Mike Phelan and the Burke team in their next chapter.”

Post-closing, Bertram will assist BCI Burke with growth via add-on acquisitions, geographic expansion, and new product introductions.

“The Burke team is thrilled to have the opportunity to partner with Bertram Capital and accelerate our momentum in the outdoor recreation market,” said Mr. Phelan. “The Bertram team differentiated themselves in the sale process through their clear understanding of our business model and go-to-market strategy, shared vision for Burke’s future, and their Bertram Labs resource. We look forward to working with Bertram as we continue to deliver on our mission of bringing play to communities around the world.”

Bertram invests in middle-market business services, consumer, industrial/manufacturing, and technology companies that have revenues from $20 million to $250 million and EBITDA of $5 million to $35 million.

In June 2021, Bertram held a final and hard cap close of Bertram Growth Capital IV LP with $940 million of total capital. Earlier in June, prior to its final close, Fund IV acquired AFC Industries, an Ohio-based distributor of fasteners and C-parts (small and low cost connecting components); and in February it acquired Bulk Reef Supply, a Minneapolis-based provider of saltwater aquarium products including lighting, controllers, and plumbing equipment.

The Halifax Group, the seller of BCI Burke, invests from $40 million to $80 million of equity in companies with EBITDA from $8 million to $30 million and enterprise values from $50 million to $300 million. Sectors of interest include health and wellness, outsourced business services, and franchising. The firm is headquartered in Washington DC with an additional office in Raleigh, North Carolina.

© 2021 Private Equity Professional | December 16, 2021

Arcline’s Dwyer Acquires UFM

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Dwyer Instruments, a portfolio company of Arcline Investment Management, has closed the add-on acquisition of Universal Flow Monitors.

Universal Flow Monitors (UFM) designs and manufactures vane, vortex shedding, and laminar flowmeters and controls that are used in automation, robotics, and other process applications.

Flowmeters are used to measure and record the flow rate of a gas or fluid. In a rotating vane type of flowmeter, the flow of the fluid is measured as it passes through a rotating set of vanes; vortex shedding flowmeters utilize flow obstructions that create small vortices which are detected and measured by downstream instruments; and laminar flowmeters measure the force of a fluid by analyzing the small differential pressures between a passing fluid and a parallel, non-vortex-creating obstruction.

UFM was founded in 1963 with a headquarters near Detroit in Hazel Park, Michigan.

“UFM has a long history of dedication to product design, customer service, and quality,” said Lars Rosean, the president of UFM. “I would like to thank all our employees who have contributed to our years of success, and I am thrilled at this opportunity to partner with Dwyer for the next stage of growth.”

Dwyer Instruments is a designer and manufacturer of more than 40,000 configurable SKUs of sensors and instrumentation used in the process automation, HVAC and building automation sectors. The company, led by President Mark Fisher, was founded in 1931 and is headquartered in Michigan City, Indiana with additional offices in Asia, Europe and Australia.

“UFM has a broad portfolio of ruggedized products that customers rely on for critical industrial applications,” said Mr. Fisher. “This has led UFM to a successful, entrenched position in niche industrial markets. We are excited to welcome UFM to the Dwyer family.”

Arcline acquired a controlling interest in Dwyer Instruments from the Clark family and members of the company’s senior management team in July 2021.

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. In February 2021, Arcline closed its second fund, Arcline Capital Partners II LP, with total capital commitments of $2.75 billion. Arcline was founded in September 2018 and has offices in San Francisco and New York.

© 2021 Private Equity Professional | December 16, 2021