Archives for March 4, 2022

Hildred Beats Target on First Institutional Fund

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Hildred Capital Management has held an above-target close of its first institutional fund, Hildred Equity Partners II LP, with total capital commitments of $362 million.

Limited partners in Fund II include both new and existing Hildred investors, including public pension plans, insurance companies, financial institutions, private wealth and financial services platforms, family offices, and high-net-worth individual investors. According to Hildred, the general partner of Fund II committed approximately $80 million of the $362 million of capital.

Hildred Capital Management was founded in 2018 by managing partners David Solomon and Andrew Goldman. Messrs. Solomon and Goldman previously worked together for five years as the Managing Partner and Chief Investment Officer, respectively, of Hildred Capital Partners, a family office (named after the family dog) founded in January 2014 by Howard Solomon and his son David Solomon. The two Solomons are former senior executives of Forest Laboratories which was sold to Allergan (then Actavis) for $28 billion in July 2014. Howard Solomon led Forest Laboratories as its CEO and chairman from 1977 to 2014. He passed away in January 2022 at the age of 94.

“We appreciate the enthusiastic reception we have received for Hildred’s first institutional fund, and we are thrilled about the range of opportunities we see in middle-market healthcare and adjacent areas,” said Mr. Solomon. “This is an incredibly exciting time to be focused in healthcare, as the pandemic has exposed significant areas of unmet need and inefficiency in patient care, resulting in fundamental shifts in the healthcare landscape that are creating highly compelling investment opportunities. Our focus will continue to be on building exceptional companies that add value to the healthcare system by improving patient outcomes, expanding access to high-quality care and reducing costs.”

Hildred’s new fund has already committed 61% of its capital through investments in seven companies including DermCare Management, a Florida-based dermatology practice management company (2019); Project Natural, a manufacturer of natural and homeopathic consumer health products (2020); binx, a Boston-based provider of PCR-based diagnostic testing (2021); SportsMed, a New Jersey-based provider of physical therapy services (2018 and 2021); Tesseract, a Connecticut-based developer of non-invasive and eye-based diagnostic devices (2021); HealthCare.com, a Florida-based healthcare insurance technology platform (2022); and Carlin Consumer Health, a platform investment that acquires over-the-counter healthcare brands (2022).

“We are grateful to have the support of investors who share our vision and belief in the growth catalysts for investments in middle-market healthcare,” said Mr. Goldman. “We look forward to continuing to partner with best-in-class businesses and their management teams where we can leverage Hildred’s deep operational experience and highly collaborative, hands-on approach to accelerate the provision of high-quality healthcare to the patients globally. With seven investments already completed, a robust acquisition pipeline, and ample dry powder, Hildred is exceptionally well-positioned to drive strong returns for our investors in the evolving healthcare space.”

Monument Group was the placement agent for this fundraise and Kirkland & Ellis provided legal services.

“The incredibly strong show of support Hildred has received for its first institutional fund amid the ongoing challenges associated with the pandemic is a testament to the strength of its team,” said Bart Malloy, a partner at Monument Group. “With extensive industry relationships, a deep bench of seasoned healthcare and investment professionals and exceptionally strong operational capabilities, Hildred has a compelling investment strategy. Congratulations to the entire team on a successful capital raise!”

New York City-headquartered Hildred makes both majority and minority investments of $20 million to $75 million in North America-based healthcare companies with revenues of up to $100 million that are valued from $50 million to $250 million. Within healthcare, subsectors of interest include consumer products, medical and pharmaceuticals services, information technology, and life science tools and diagnostics.

© 2022 Private Equity Professional | March 4, 2022

Jordan Closes Seventh Dental Products Add-On

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Young Innovations, a portfolio company of The Jordan Company, has acquired Medical Purchasing Solutions, a supplier of pharmaceuticals and surgical supplies.

Scottsdale, Arizona-based Medical Purchasing Solutions (MPS) is a distributor for the medical and surgical supply industry, providing a variety of anesthetic, anti-inflammatory, antianxiety and other medicines alongside catheters, needles, and syringes. Founded in 2005, the company is led by co-CEOs John Discerni and Denis McNicholl.

“I am exceptionally proud of the company we’ve built since 2005 with our valued employees and business partners,” said Mr. Discerni. “We had set out to create a business and service-first culture that will continue to thrive well into the future and thanks to our team, we are well-positioned for continued success. We are excited to be partnered with Young Innovations in this exciting new chapter of growth for MPS.”

Young Innovations develops and manufactures preventive, restorative, orthodontic and endodontic supplies and equipment used by dentists, oral surgeons, periodontists, hygienists, dental assistants and consumers. The company’s products include disposable and metal prophy angles (used tool for tooth polishing), prophy cups and brushes, dental micro-applicators, moisture and infection control products, orthodontic toothbrushes, flavored examination gloves, and children’s toothbrushes and toothpaste. The company also offers a line of diagnostic products that includes panoramic X-ray machines and related supplies. Young Innovations is headquartered northwest of Chicago in Algonquin, Illinois.

“Medical Purchasing Solutions takes great pride in delivering an exceptional customer experience to oral surgeons, periodontists and other healthcare providers managing pain, with a robust product line specifically designed to address this specialty segment,” said Dave Sproat, CEO of Young Innovations. “We are excited to support the ongoing growth of MPS’s business, employees, customers, vendors and brand as a part of our broader global portfolio.”

In October 2017, The Jordan Company acquired a majority equity interest in Young Innovations from Linden Capital Partners, which remains an investor in the company.

Jordan has closed several add-on acquisitions for Young Innovations including Preat (November 2020) PuraGraft (November 2019), Germiphene Corporation (June 2019), Crystal Tips (April 2019), Johnson-Promident (July 2018) and Mydent International (January 2018).

The Jordan Company is a middle-market private equity firm that invests in a range of industries including industrials, transportation and logistics, healthcare, consumer, telecom, technology, and utilities. The firm was founded in 1982 and is headquartered in New York City with an additional office in Chicago.

© 2022 Private Equity Professional | March 4, 2022

Aterian’s Vander-Bend Adds Medical Device Veteran

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Vander-Bend Manufacturing, a maker of metal products used in the medical device sector and a platform company of Aterian Investment Partners, has added Brian King to its board of directors as executive chairman.

Mr. King has a long and impressive medical device resume. He is the former president and CEO of private equity-owned Viant Medical, a provider of contract manufacturing services to the medical device industry. During his tenure leading Viant, the company quadrupled in size to $1 billion in annual revenues. Prior to Viant, Mr. King spent over a decade at Covidien, where he held positions of increasing responsibility including as group president of the company’s $2 billion emerging markets division and president of Covidien’s Asian operations.

Vander-Bend is a prototyper, developer, manufacturer, and assembler of large-format metal products used primarily in the medical technology sector. The company, led by CEO Greg Biggs, was founded in 1979 and is headquartered in San Jose, California with six facilities and 550,000 sq. ft. of combined manufacturing space.

Aterian acquired Vander-Bend in May 2018 and in December 2020 the company closed on the add-on acquisition of Swiss Precision Machining (SPM), a manufacturer of complex and tight tolerance consumable medical instrument components used in robotic surgery. SPM operates an 82,000 sq. ft. facility near Chicago in Wheeling, Illinois. The buy of SPM followed two earlier add-on acquisitions – TMK Manufacturing, a California-based provider of prototyping and machining services to medical technology companies (May 2020); and J.L. Haley Enterprises, a California-based fabricator of metal components used primarily in medical devices (January 2019).

All told, in its nearly four years of ownership of Vander-Bend, and in addition to the three add-on acquisitions, Aterian has also established and commercialized two new production facilities in Stockton and San Jose, California, completed substantial capital equipment expansion, and significantly invested in human capital throughout the organization. Vander-Bend now operates six facilities across the West Coast and Midwest and employs more than 900 people.

According to Aterian, the addition of Mr. King to the Vander-Bend board is highly strategic and will be instrumental to the future organic and acquisition growth of the business.

“Having Brian join the board as executive chairman is an exciting milestone for the business and a tremendous validation for Vander-Bend and everyone who works for the company,” said Mr. Biggs. “During my more than three decades at Vander-Bend, I’ve had the pleasure of being part of the company’s development from a single-site, family-run organization into an industry-leading, multi-site organization with nearly a thousand employees and unmatched capabilities, and yet all of us at Vander-Bend know there is still so much more we can accomplish. I am truly delighted to have Brian as a teammate on this unfolding journey.”

“We are thrilled to add Brian to the Vander-Bend team as executive chairman,” said Brandon Bethea, a co-founder and partner at Aterian. “When we decided to establish this position, Brian was immediately our first choice. He has a unique blend of differentiated strategic insight, deep industry experience as well as a demonstrated track record of success at each stop in his career.”

“I am excited to join the board of Vander-Bend,” said Mr. King. “Vander-Bend is a special company with a tremendous set of growth opportunities in front of it. Vander-Bend also has terrific people which is the hallmark of any great organization. Greg and his team’s passion for the business, paired with the Aterian teams’ enthusiastic support, is certainly infectious. I look forward to working closely with both Vander-Bend and Aterian as we focus on the company’s continued evolution into a world-class operation.”

Mr. King is a graduate of the United States Naval Academy, he holds a master’s degree in civil engineering from Penn State and has an MBA from Harvard University.

Aterian invests from $10 million to $100 million in middle market businesses with $50 million to $750 million in revenue and $10 million to $50 million in EBITDA. The firm’s latest fund, Aterian Investment Partners IV LP, closed in October 2021 with $830 million of committed capital. Aterian has offices in New York City and Coral Gables, Florida.

© 2022 Private Equity Professional | March 4, 2022

LBMC Launches Advisory Group

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Regional accounting and consulting firm LBMC has launched a new advisory services group to meet the needs of the firm’s clients in private equity, healthcare and the middle market.

LBMC’s Advisory Services Group, led by Mark Burnette, provides business valuation, data analytics, healthcare consulting, information security and risk, litigation support, forensic accounting, and transaction advisory services. Mr. Burnette previously served as shareholder-in-charge of LBMC’s risk services practice.

“What sets LBMC apart is having a perspective and sharing those insights and opportunities with C-suite leaders,” said LBMC CEO Jeff Drummonds. “We create value by helping leaders see what’s around the corner, and the advisory practice gives us the opportunity to bring the full power of the firm through a coordinated approach. Our advisory services team ensures our clients get the holistic view to help move their business forward and reach their goals. We want to be the trusted advisor our clients need, not just for compliance, but for their companies’ future growth.”

“I am honored to take on the executive leadership role of LBMC’s new advisory services practice and am excited about the opportunities ahead,” said Mr. Burnette. “The individual teams that make up our practice have been delivering outstanding service and solutions to our clients for many years. The unified advisory practice facilitates sharing of best practices and resources, enhances collaboration, and maximizes operational efficiencies across service lines while allowing our teams to deliver and create more value for businesses.”

LBMC (Lattimore Black Morgan & Cain) is an accounting, business advisory and professional services firm with more than 10,000 clients and 750 employees. The firm provides financial, human resources, technology, information security, staffing and wealth advisory services to both businesses and individuals. LBMC was founded in 1984 and is headquartered in Nashville with additional Tennessee offices in Chattanooga and Knoxville, and Charlotte, North Carolina.

© 2022 Private Equity Professional | March 4, 2022