March 15, 2022
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Archives for March 15, 2022

Easy Ice Heats Up Ice Sector

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Easy Ice, a portfolio company of Freeman Spogli, has acquired Icesurance, the leasing division of Arctic Glacier, a portfolio company of the Carlyle Group.

Easy Ice is a national provider of ice machines using a subscription model. The company’s commercial ice machine subscription programs include installation, cleaning, preventive maintenance, repairs, backup ice and peak demand ice.

Easy Ice, founded in 2009 by CEO Mark Hangen and COO John Mahlmeister, is co-headquartered in Phoenix, Arizona and Marquette, Michigan, and has warehouse and distribution facilities in Chicago, Dallas, Kansas City, Orlando, New York City, and Los Angeles.

Freeman Spogli acquired Easy Ice in December 2019 and through a combination of organic growth and add-on acquisitions of ice machine leasing companies has expanded the company from 25,000 ice machines under management in 2019 to nearly 30,000 units across 47 states in 2022.

The acquisition of Icesurance increases Easy Ice’s market share in New York City and Los Angeles and is the sixth add-on for Easy Ice under Freeman Spogli’s ownership. Other recent acquisitions include the February 2022 buys of Chicago-based Biltmore Refrigeration and the Oklahoma City-based leasing division of Brooks Industries.

“After more than 45 years in business, Arctic Glacier and Icesurance have achieved extraordinary success in the commercial ice machine industry and we’re equipped to continue that legacy,” said Mr. Hangen. “With this acquisition, we have strengthened our presence in the two largest metropolitan areas in the nation with local resources that enable us to provide best-in-class service to clients in both regions.”

Arctic Glacier produces, markets, and distributes packaged ice. The company also offers bottled water, dry ice, packaged wood, rock salt, ice making, and dispensing equipment. The company, led by CEO Richard Wyckoff, operates over 100 production and distribution facilities in the United States and Canada and is headquartered near Philadelphia in Bala Cynwyd, Pennsylvania.

The Carlyle Group (NASDAQ: CG), through Carlyle Global Partners, the firm’s long-duration investment strategy, acquired Arctic Glacier from H.I.G. Capital in March 2017. The firm invests worldwide in buyouts, growth capital, real estate, and leveraged finance. Carlyle, with $293 billion of assets under management, has more than 1,800 employees in 26 offices across five continents and is based in Washington DC.

Freeman Spogli invests from $75 million to $300 million of capital per investment in North American-based middle-market consumer and distribution companies that are valued from $100 million to $750 million. Typical target companies will have EBITDA from $10 million to $75 million. Since its founding in 1983, Freeman Spogli has invested over $5.3 billion in 67 portfolio companies with an aggregate transaction value of approximately $25 billion. The firm has offices in Los Angeles and New York City.

In September 2019, Freeman Spogli closed its latest fund, FS Equity Partners VIII LP (Fund VIII), at its hard cap of $1.85 billion. Fund VIII follows the firm’s earlier fund which closed in October 2014 with capital commitments of $1.3 billion.

© 2022 Private Equity Professional | March 15, 2022

Audax Sells Smart Care to Wind Point

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Audax Private Equity has sold Smart Care Equipment Solutions, a provider of commercial kitchen equipment maintenance services, to Zone Climate Services, a portfolio company of Wind Point Partners.

St. Paul, Minnesota-headquartered Smart Care provides commercial kitchen repair, maintenance services, and replacement parts to companies that are active in the commercial foodservice industry. The company, led by CEO Bill Emory, has 1,400 employees and completes more than 350,000 service events each year at more than 40,000 locations in all 50 states.

Smart Care began when Audax acquired the equipment care business of Ecolab in November 2017 and rebranded the company under the Smart Care brand in December 2017. During its ownership term, Smart Care closed 14 add-on acquisitions.

“We are proud of the business we built working with the Smart Care team,” said Don Bramley, a managing director at Audax. “From the start, we were aligned on how we would execute our buy and build strategy to help create a company that would deliver value for Smart Care’s customers, associates, communities, and investors. We wish Bill Emory and the entire Smart Care organization continued success as they embark on their next chapter of growth.”

“My team and I feel very fortunate to have had Audax as a partner over the past four years,” said Mr. Emory. “They played a critical role in our success by providing unmatched operational expertise and deep business acumen where we needed them. In short, our success is a direct reflection of what Don and his team brought to Smart Care and they share equally in our success.”

Zone Climate Services, acquired by Wind Point in March 2021, is a provider of refrigeration and HVAC services to Midwest-based convenience stores, grocery stores, food manufacturers, warehouse facilities and restaurants.  Zone is led by CEO Henry Lees-Buckley and is headquartered near Chicago in Alsip, Illinois. Post-closing, Mr. Buckley will become CEO of the combined Zone and Smart Care businesses.

Audax invests in middle-market companies that have from $8 million to $50 million in EBITDA and enterprise values of $50 million to $400 million. Sectors of interest include business and consumer services; energy; healthcare; technology, media and telecom; and industrials including chemicals, infrastructure, and building materials. Audax, with offices in Boston, New York, and San Francisco, is currently investing out of its $3.5 billion, sixth private equity fund.

Chicago-based Wind Point invests from $50 million to $100 million in companies with EBITDA of at least $10 million. Industries of interest include business services, consumer products and industrial products. Wind Point is currently investing out of Wind Point Partners IX LP which closed in February 2021 with $1.5 billion of capital. Fund IX is the largest fund ever raised by Wind Point.

Harris Williams was the financial advisor to Audax Private Equity on this transaction.

© 2022 Private Equity Professional | March 15, 2022

Argosy Buys Laser Maker

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Argosy Private Equity has acquired Preco, a Kansas-based maker of die-cutting and laser cutting equipment.

In addition to laser cutting equipment, Preco manufacturers rotary die cutters and provides contract manufacturing services including laser cutting, perforating, welding, heat-treating and die-cutting. The company’s customers are active in a range of end markets, including industrials, abrasives, packaging, defense, electronics, energy storage, and medical.

Preco, led by CEO Timothy Burns, was founded in 1976 and is headquartered near Kansas City in Lenexa, Kansas, with additional facilities in Wisconsin and Europe.

“We are very excited to announce our new partnership with Preco and its dynamic leadership team,” said Michael Bailey, a partner at Argosy. “Preco has been a recognized leader in the specialty die-cutting and laser processing industries for decades, and we are looking forward to working together to grow the business through further development of the company’s product and service offerings.”

“Preco is pleased to join forces with Argosy Private Equity, opening a new chapter in our nearly 50-year history of pursuing opportunities and growth for the benefit of our customers and employees,” said Mr. Burns.

Argosy Private Equity invests from $5 million to $25 million in lower middle-market companies that have revenues up to $100 million, EBITDA up to $10 million, and EBITDA margins of 10% or greater. Sectors of interest include niche manufacturing and business-to-business services companies. Argosy Private Equity is a division of Argosy Capital, an investment adviser with $2.3 billion of assets under management. The firm was founded in 1990 and is headquartered near Philadelphia in Wayne, Pennsylvania.

The acquisition of Preco is the fourth platform investment made by Argosy’s sixth equity fund and follows the buys of utility equipment maker Global Power Products in February 2022, medical device manufacturer Bionix in January 2022, and financial services provider Wittenbach Business Systems in April 2021.

​​© 2022 Private Equity Professional | March 15, 2022

Greenbriar’s DART Aerospace Sold to TransDigm

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Publicly traded TransDigm Group has agreed to acquire DART Aerospace, a portfolio company of Greenbriar Equity Group, for approximately $360 million in cash.

DART designs and manufactures components for helicopters including flotation systems, landing gears, interior and exterior accessories, load expanders, cable cutters, and filters. The company also provides related repair and overhaul services for its aftermarket and original equipment customers.

DART sells more than 5,000 products and has 1,100 Supplemental Type Certificates (STCs), documents issued by the FAA approving a product (aircraft, engine, or propeller) modification.

The Montreal-headquartered company is expected to have approximately $100 million in revenue in 2022. DART has approximately 400 employees and operates from four facilities in Hawkesbury, Ontario; Portland, Oregon; Fort Collins, Colorado and Chihuahua, Mexico.

TransDigm (NYSE: TDG), is a Cleveland-headquartered designer, producer and supplier of aircraft components. The company, led by CEO Kevin Stein, was founded in 1993 by Kelso & Company to acquire four aerospace companies – Adel Fasteners, Aero Products Component Services, Controlex Corporation and Wiggins Connectors – from IMO Industries.

“We are excited about the acquisition of DART Aerospace,” said Mr. Stein. “DART is an industry leader in helicopter mission equipment and its unique helicopter solutions fit well with our proprietary and aftermarket-focused value generation strategy. The company has established positions on a diverse range of new and existing rotary-wing platforms, strong aftermarket content and an outstanding reputation with its customers. As with all TransDigm acquisitions, we expect the DART acquisition to create equity value in-line with our long-term private equity-like return objectives.”

Greenbriar is an active investor in the supply chain, business services, and advanced manufacturing sectors. In March 2021, Greenbriar held an oversubscribed closing of Greenbriar Equity Fund V LP with total capital commitments of nearly $1.7 billion. The firm was founded in 1999 and is based in Rye, New York.

The buy of DART by TransDigm is expected to close during the second quarter of 2022.

© 2022 Private Equity Professional | March 15, 2022

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