Archives for March 2022

Inland Pipe Rehabilitation, a portfolio company of J.F. Lehman & Company, has acquired Inliner, the trenchless and pipe rehabilitation services business of Granite Construction, for $159.7 million.

Inliner’s services include resin- and UV-based cured-in-place-pipe solutions, geopolymer liner and construction management services. Many of Inliner’s customers are wastewater and stormwater systems operated by United States and Canadian government entities. For instance, Inliner has for the past 15 years partnered with the City of Chicago on a multi-year program to improve Chicago’s aging sewer systems.

Assets included in the $159.7 million acquisition, all of which were acquired by Granite in 2018, are Inliner, Liner Products, Inliner Technologies and Liquiforce.

Inland Pipe Rehabilitation (IPR) is a provider of trenchless pipe rehabilitation services – which allow for the completion of underground repair or replacement projects with minimal surface and environmental disruption – to the municipal wastewater and stormwater markets. IPR’s technical and operational capabilities include cured-in-place pipe, pipe bursting, and geopolymer spray lining. IPR, led by CEO Jim Baumgardner, has approximately 450 employees and is headquartered near Atlanta in Conyers, Georgia.

“This is a compelling opportunity to establish a unique service provider in this market – a national presence, delivering scaled capabilities across numerous technologies and delivery methods, addressing storm, waste and potable water infrastructure,” said Glenn Shor, the chairman of IPR and a partner at J.F. Lehman.

J.F. Lehman acquired IPR in December 2018 from Strength Capital Partners. The acquisition of Inliner is the second add-on completed by IPR under J.F. Lehman and follows the buy of Murphy Pipeline Contractors in September 2020.

“The addition of Inliner builds upon the acquisition of Murphy Pipeline Contractors in our strategy to support the IPR platform through strategic M&A and organic growth initiatives” added Dave Thomas, a managing director at J.F. Lehman.

Granite Construction (NYSE: GVA), founded in 1922, is one of the oldest and largest diversified construction and construction materials (asphalt concrete, aggregates, specialty sands and rock) companies in the United States. The Watsonville, California-headquartered company, led by CEO Kyle Larkin, is a provider of construction and complex infrastructure services to the transportation, water infrastructure and mineral exploration markets.

“I’m pleased to announce the completion of the Inliner sale,” said Mr. Larkin. “This sale and the expected sales of the Water Resources and Mineral Services businesses are important steps in the implementation of our new strategic plan and will allow us to focus on our core competencies in civil construction and materials. We expect to use the proceeds from the sales to strengthen and grow our vertically-integrated businesses, pay down debt, and return value to shareholders through share repurchases.”

J.F. Lehman is a middle-market private equity firm focused primarily on the maritime, defense and aerospace sectors. The firm was founded in 1992 by Dr. John Lehman, who served six years as Secretary of the United States Navy. J.F. Lehman is headquartered in New York City with an additional office in Washington, DC.

Perella Weinberg Partners is the financial advisor and Shearman & Sterling is the legal advisor to Granite on this transaction. Houlihan Lokey is the financial advisor to IPR.

© 2022 Private Equity Professional | March 31, 2022

Horsepower, an automotive aftermarket accessories platform of Huron Capital Partners, has acquired Rago Fabrication.

Rago designs, manufactures and distributes products – storage systems, bed racks, lighting mounts, gear mounts, and armor – for the off-road and overland automotive aftermarket, primarily focused on Toyota and Lexus vehicles. Kerrville, Texas-based Rago was founded in 2013 by U.S. Navy Veteran Mario Rago and his wife Melissa Rago.

“We have earned our brand loyalty over the years by consistently delivering high-quality, innovative products to our customers,” said Ms. Rago. “Combining Rago with the ADD and DV8 brands boosts our ability to expand our products beyond the Toyota platforms, by partnering with a team of enthusiasts whose job during the week is their passion on the weekend.”

Huron’s Horsepower platform is currently made up of automotive aftermarket brands Addictive Desert Designs (ADD) and DV8 Offroad. ADD’s and DV8’s products include aftermarket suspension kits, off-road bumpers, and other accessories for a range of truck models including those produced by Chevrolet, Ford, Jeep, Nissan, Ram, and Toyota. The two brands jointly operate out of ADD’s facility in Mesa, Arizona, and DV8’s facility in Riverside, California.

“The addition of Rago provides Horsepower with both complementary vehicle platform capabilities, given Rago’s Toyota and Lexus focus, and enhances our R&D activity through the addition of a team that can deliver unique products for the off-road and overlanding enthusiast,” said John Robinson, the CEO of Horsepower.

“We continue to see favorable dynamics in the off-road and overlanding markets that will support Horsepower’s growth over the next several years,” said Michael Zukas, a principal at Huron Capital. “We will continue to partner with strong companies such as Rago, to execute our focused buy-and-build strategy in this highly attractive sub-segment of the broader automotive aftermarket.”

Huron Capital is an operationally-focused private equity firm that makes control and non-control investments in companies with revenues of $20 million to $200 million and EBITDAs of $5 million or more. Sectors of interest include business services, consumer goods & services, and specialty industrials. Founded in 1999, Detroit-based Huron Capital has raised nearly $2 billion in capital through six private equity funds and invested in over 240 companies.

© 2022 Private Equity Professional | March 31, 2022

DENNIS Uniform, a portfolio company of SBJ Capital, has acquired Mills Uniform Company, a school uniform manufacturer.

Mills Uniform serves over 125 private schools in the United States from its seven retail stores in California, Texas, Georgia and Tennessee and through its online store. The company’s products include shirts, blouses, polos, dresses, sweaters, blazers, pants, shorts, skirts, ties, socks, tights and belts. Mills Uniform was founded by Sue Mills in 1947.

“I’ve known and respected the team at DENNIS and their excellent operation for many years,” said Suzette Mills, the owner of Mills Uniform and granddaughter of the founder. “All of us at Mills are looking forward to strengthening our service offering and we’re already seeing positive results from sharing knowledge with our expanded uniform ‘brain trust.’ I look forward to continuing to deliver great service and products to our schools and their families for years to come.”

Post-closing, Suzette Mills will continue as a board member, shareholder and executive at the combined business.

DENNIS is a designer and manufacturer of school uniforms – including polos, khakis, shorts, and skirts – that serves over 2,000 schools and 370,000 students per year through its website and through a national network of more than 30 retail locations operating in 20 states. The company, led by CEO Gary Serra, is headquartered in Portland, Oregon. Dennis, founded in 1920 by the Shipley Family, first produced nursing uniforms, then supplied apparel and linens to soldiers shipping out of Portland during World War II.

“We have admired and respected Suzette and her team at Mills for many years,” said Mr. Serra. “It goes without saying, but it has always been our belief that DENNIS and Mills were meant to partner as one given our similar standards, geographic crossover and a shared belief in making school uniforms easy.”

SBJ, in partnership with the founding Shipley Family, acquired DENNIS in November 2017. “The combination of DENNIS and Mills further solidifies our platform as the leader in the school uniform industry,” said Patrick Muller, a vice president at SBJ. “The company has now grown revenue more than 60% since our initial partnership with DENNIS. This growth has allowed us to continually reinvest in systems and people to help achieve our collective goal of providing schools and parents with the best possible uniform experience.”

SBJ invests from $10 million to $50 million in consumer, business services and healthcare services companies that have up to $100 million in revenue and EBITDA from $3 million to $15 million. In October 2015, SBJ held a final closing on its debut fund, SBJ Fund LP, with total capital commitments of $204 million, exceeding its original $150 million target. SBJ now has approximately $400 million of capital under management. SBJ was founded by Gus Spanos, Tom Barber and Bill Jesse and has offices near San Francisco in Walnut Creek, California.

© 2022 Private Equity Professional | March 29, 2022