Archives for June 15, 2022

Brentwood Associates has acquired Hissho Sushi, a franchisor of on-the-go sushi products.

Hissho Sushi operates sushi bars in upscale supermarkets, cafes, hospitals, universities, and corporate foodservice locations. The company’s sushi rolls and chef-created specialties include California Roll, Krispy Krab Roll, Spicy California Roll, Tempura Shrimp Roll, Veggie Roll, and Wasabi Crunch Roll among many others.

According to the company, it is the second-largest sushi provider in the United States with 2,200 locations in 42 states. Hissho Sushi was founded in 1998 and is headquartered in Charlotte North, Carolina.

Brentwood acquired its majority interest in Hissho Sushi from family office Ingleside Investors, Jeff Vinik (a real estate developer and the owner of the NHL’s Tampa Bay Lighting), Philip Maung (Hissho’s founder), and members of the company’s senior management team including CEO Dan Beem and CFO Mathew Wilken (Mr. Beem and Mr. Wilken will continue to lead the company). The selling investors will remain as minority shareholders in partnership with Brentwood Associates. In addition, Continental Grain Company, an investor, owner and operator of food and agribusinesses, co-invested in the transaction alongside Brentwood.

“We are excited to welcome Brentwood to the next chapter in the Hissho Sushi story,” said Mr. Beem. “Combining Hissho’s category leadership and growth-centric mindset with Brentwood’s deep knowledge in foodservice and franchising will create even greater growth opportunities for Hissho, our franchisees and our retail partners.”

“Hissho is uniquely positioned to capitalize on the growing consumer trend towards convenient and healthy prepared food options,” said Jon Ang, a managing director at Brentwood. “We are thrilled to partner with Hissho and its outstanding management team on their current strategy of bringing innovative and sustainably sourced sushi everywhere consumers work, live and play.”

Los Angeles-based Brentwood invests from $20 million to $200 million of equity in consumer products and services companies that have revenues of $20 million to $500 million and EBITDA of up to $50 million. Since 1984, Brentwood’s private equity team has invested in more than 50 portfolio companies with an aggregate transaction value of over $6 billion.

Brentwood’s investment in Hissho Sushi is the firm’s 12^th in the restaurant, foodservice and franchising sectors. Other franchised investments made by Brentwood include Chicken Salad Chick, Blaze Pizza, and Watermill Express.

In addition to Continental Grain, other co-investors in this transaction include Portfolio Advisors and Pine Mountain Ventures.

Owl Rock Capital, Audax Private Debt, and Varagon Capital Partners provided debt financing in support of the buy of Hissho Sushi.

William Blair & Company was the financial advisor to Hissho Sushi.

© 2022 Private Equity Professional | June 15, 2022

Clayton, Dubilier & Rice and TPG have agreed to acquire Covetrus, a provider of animal health services, at an enterprise value of $4 billion.

Covetrus (NASDAQ: CVET) is a provider of animal-health technology and services including practice management software, prescription management, customer engagement services, and supply chain management. The company’s customers are typically veterinarians in the companion, equine, large animal and animal welfare markets. Covetrus is headquartered in Portland, Maine and is led by CEO Benjamin Wolin.

“This transaction is an important milestone for our company, shareholders, employees, customers and partners,” said Mr. Wolin. “Not only does this deal provide compelling value for our existing shareholders, but it also allows Covetrus to continue its mission to drive positive outcomes – both business and healthcare – for veterinarians across the globe. We appreciate CD&R’s support and their continued commitment to our company and the global veterinary community.”

Covetrus was formed in March 2019 when health care products distributor Henry Schein (NASDAQ: HSIC) spun out its animal health business and immediately merged it with Vets First Choice, a provider of back-end pharmacy services.

“Covetrus has undergone a true transformation since our initial 2015 investment in its predecessor Vets First Choice, growing from $55 million in revenue-focused primarily on online pharmacy in the United States to a leading global provider of animal health services with more than $4.6 billion in revenue,” said Sarah Kim, a partner at CD&R.

For the full year 2022, Covetrus’ adjusted EBITDA is estimated at $270 million. Based on a $4 billion enterprise valuation this equates to a 14.8x purchase price multiple.

New York and London-based CD&R invests in European and United States-based businesses. Since its founding in 1978, the firm has invested more than $35 billion in over 100 companies across a range of industries including consumer, retail, healthcare, industrial, technology and business services.

“The company is at an important stage in its ongoing evolution, and we look forward to partnering with management and CD&R to further its leadership in the growing animal health space,” said Kendall Garrison, a partner at TPG.

TPG invests in a wide range of asset classes, including private equity, growth equity, real estate, credit, and public equity. The firm, founded in 1992, has more than $96 billion of assets under management and has headquarters in San Francisco, California, and Fort Worth, Texas.

Goldman Sachs and Lincoln International are the financial advisors to Covetrus. Deutsche Bank, UBS, BMO Capital Markets and Mizuho Securities have provided committed debt financing for the transaction.

This transaction is expected to close in the second half of 2022.

© 2022 Private Equity Professional | June 15, 2022

Sun Capital Partners has acquired TENAX, a manufacturer and distributor of chemical products, abrasives, and tooling used to treat natural stone, engineered stone, and ceramic tiles.

Specific products of TENAX include adhesives and glues; varnishes and waxes; polishing powders; abrasives and brushes; cutting tools; stone dyes, cleaners, and stain removers. Customers of TENAX – located in more than 100 counties – are active in the garden and do-it-yourself, construction, engineering, industrial and agricultural sectors.

TENAX, led by President Gino Bombana, was founded in 1956 and is headquartered 75 miles west of Venice in Verona, Italy with additional operations in the United States, Spain, Brazil, Turkey, India and China.

“Since TENAX was founded by my father in 1956, the business has grown significantly, and I am now proud to partner with Sun Capital to continue the family legacy and support the future growth of the business,” said Mr. Bombana. “While the business was born in Verona, an area with a strong heritage in natural stone production, it is today an internationally recognized brand with an international footprint. I believe that our management team, with the support and resources that Sun Capital can provide, will enable TENAX to strengthen and expand its market position and further leverage our leading ‘blue-chip’ brand.”

“We are excited to apply our experience investing in the building products sector, executing buy-and-build strategies, and in partnering with founders like the Bombana family to support TENAX at this exciting juncture in its growth,” said Marc Leder, a co-CEO of Sun Capital. “Over many years the Bombanas have built TENAX into a large and truly global player, and we see significant opportunity for the Company to continue that trajectory, both through strategic acquisitions to penetrate new markets and driving organic growth to increase overall presence and add market share.”

Sun Capital invests in leveraged buyouts, equity, and debt in companies that can benefit from its in-house operating professionals and experience. The firm has invested in and managed more than 475 companies worldwide with combined sales in excess of $50 billion since its inception in 1995. Sun Capital has offices in Boca Raton, Los Angeles and New York, and an affiliate office in London.

Clearwater International was the financial advisor to TENAX on this transaction and Sun Capital was advised by UniCredit.

© 2022 Private Equity Professional | June 15, 2022