Archives for February 28, 2023

Levine Leichtman Capital Partners (LLCP) has acquired sister companies Kilwin’s Quality Confections and Kilwins Chocolates Franchise (together Kilwins).

Kilwins is a franchisor, retailer, manufacturer and distributor of chocolate, ice cream and confectionary products. The company makes over 75 different products including boxed chocolates, cakes, truffles, caramel apples, caramel corn, toffee, salt water taffy, fudge, and marshmallows. The company currently operates over 150 stores across 25 states, the majority of which are franchised operations.

Kilwins, headquartered in Petoskey, Michigan, was founded in 1947 and has been majority owned by Robin and Don McCarty since 1995. The McCarty’s will maintain an equity ownership in the business in partnership with LLCP.

“It has been a joy for Robin and I to have been a part of this company for the last 43 years,” said Mr. McCarty. “Our caring, loyal franchisees are the basis of our long-term success, and the Kilwins team has made incredible products, built an exceptional platform and has successfully created meaningful and lasting experiences for our customers. As we look to the company’s future, we are confident that LLCP has the resources and franchise experience to lead Kilwins in its next phase of growth, and will provide dynamic, thoughtful, and strong customer focus and leadership.”

“Kilwins has an incredible brand proposition, a compelling product portfolio, and a loyal customer base,” said Andrew Schwartz, a partner at LLCP. “We are strong believers in the long-term potential of Kilwins and are excited to work closely with the company’s management team to accelerate growth through continued franchise expansion, new channel opportunities, and additional product innovation.”

Levine Leichtman invests in US and Europe-based middle-market companies across numerous industries including franchising, business services, education, engineered products, healthcare, and light manufacturing. The firm closed its most recent fund, LLCP Lower Middle Market Fund III LP (Fund III), at an oversubscribed $1.38 billion in September 2021. LLCP’s investment in Kilwins is the third platform investment for Fund III.

LLCP is an active investor in the franchising and multi-unit store sector, having invested in more than 25 brands including Tropical Smoothie Cafe, Nothing Bundt Cakes, Mountain Mike’s Pizza, Wetzel’s Pretzels, and Global Franchise Group.

Since its founding in 1984 by Arthur Levine and Lauren Leichtman, LLCP has managed $13.2 billion of institutional capital across 15 investment funds and has invested in over 100 portfolio companies. LLCP currently has $8.6 billion of assets under management with offices in Los Angeles, New York, Chicago, Charlotte, Miami, London, Stockholm, The Hague and Frankfurt.

BDO Capital Advisors was the financial advisor to Kilwins, and Varnum, a Grand Rapids, Michigan-headquartered law firm, provided legal services.

© 2023 Private Equity Professional | February 28, 2023

Imperative Chemical, a portfolio company of Hastings Equity Partners, has agreed to merge with RSI Chemicals, a portfolio company of One Equity Partners (OEP). Hastings will be the majority owner of the combined business.

Imperative Chemicals is a provider of completion chemical, acid stimulation, and capillary injection products that are used by upstream and midstream oil, gas, and water customers. The company also offers field technical services, lab services, manufacturing and logistics, and program management. Midland, Texas-headquartered Imperative has over 550 employees and 32 locations in Texas, New Mexico, Oklahoma, Illinois, North Dakota, and Colorado.

Imperative was formed by Hastings in 2019 through the merger of three of its portfolio companies – WadeCo Specialties (2014), Impact Chemical Technologies (2016) and FloCap Injection Services (2017).  Additional add-on acquisitions made by WadeCo include Elite Treating (2014), Select Chemicals (2014), Escudero Chemicals (2015), and Desert Downhole Tool (2016). Since Hastings’ initial Fund III investment in WadeCo in 2014, Imperative’s revenues have increased over 10x through these add-on acquisitions and organic growth.

RSI Chemicals (Refinery Specialties, Inc.) is a provider of oilfield services with a focus on formulating, manufacturing and providing specialty oil and gas chemicals. RSI also provides acidizing, remedial pumping, hot oiler services, and technical consulting services. RSI, with more than 270 employees, operates a headquarters and blending facility located near Houston in Hempstead, Texas. The company also operates regional laboratories, blending facilities, and field offices in Texas, Oklahoma, North Dakota, and Arkansas.

Post-closing, the combined companies will be led by Imperative’s COO Ryan Havens as CEO, and RSI’s COO Garrett Tucker as COO. Curtis Bordelon, RSI’s current CEO, will be retiring after a distinguished career in the industry, and Neil Harrop, Imperative’s current CEO, will remain active with the business as a member of its board of directors.

“With both companies’ positive trajectories, Imperative has increasingly competed with RSI in the market. We have tremendous respect for their talented team, unique capabilities, and service philosophies. I am excited about the next chapter of combining our strengths, executing our plans, and growing our team as we build upon an exceptional customer base,” said Mr. Havens.

According to Hastings, the merger of Imperative and RSI – with complementary regional presence – creates one of the largest oil and gas production chemicals businesses focused on the United States land oilfield market.

“The combination of these two exceptional companies will change the landscape in the U.S. land oilfield chemicals market with cultural alignment, a quality management team, a talented and motivated workforce that execute flawlessly, and a combined product line that spans the chain of custody for all chemical needs for completions, flowback, production and midstream operations,” said Mr. Harrop.

“We are extremely proud of our partnership with management over the years and we are excited about this next phase of growth,” said Joe Conlon, a managing director at Hastings. “The combined company will more effectively serve existing customers and its ability to compete with the largest players in the sector will be enhanced.”

Houston-based Hastings invests in energy services and equipment companies (upstream, midstream, and downstream) with EBITDA from $4 million to $20 million. Hastings’ approach is to leverage the operational experience of the firm’s managers and investors, many of whom are active or former CEOs of Fortune 1000 companies.

OEP is a middle-market private equity firm focused on the industrial, healthcare, and technology sectors in North America and Europe. Typical equity investments range from $30 million to $300 million. The firm spun out of JP Morgan in 2015 and has closed more than 300 transactions worldwide since its founding in 2001. OEP has offices in New York, Chicago, Frankfurt, and Amsterdam.

In April 2022, OEP closed its latest fund, One Equity Partners VIII LP, with committed capital of $2.75 billion. The new fund was oversubscribed and closed above its increased hard cap.

© 2023 Private Equity Professional | February 28, 2023

West Lane Capital Partners and Wheel Capital Partners have acquired a majority interest in Epicurean Catering.

Epicurean is a provider of custom and handmade hors d’oeuvres and other high volume food items to Las Vegas hotels and event spaces, and stadiums. The company’s food products use a range of proteins and ingredients including beef and pork, fish and shellfish, fruits and vegetables, and poultry and fowl. Epicurean was founded in 2001 by Supreya and Steven Voelkening and is headquartered in Las Vegas, Nevada.

In partnership with West Lane and Wheel Capital, David Friedman will lead Epicurean as its new CEO. Mr. Friedman has more than 25 years of experience in the food industry. Most recently, from 2008 to 2019, Mr. Friedman was the CEO and founder of Epic Burger, a Chicago-headquartered all natural fast casual restaurant group backed by Boston-based Cue Ball Group.

“We are thrilled to partner with West Lane and Wheel Capital as the company embarks on its next phase of growth,” said Mr. Friedman. “With their support, Epicurean is well-positioned to accelerate its expansion plans and continue to provide the highest level of service to its clients.”

“We are excited to partner with Epicurean and support its talented team in achieving their growth objectives,” said Nick Sternberg, the founder and managing partner of West Lane. “This investment is a testament to our confidence in the company’s ability to deliver exceptional value to its clients and capitalize on growth opportunities in the market.”

Los Angeles-based West Lane invests in North American-based companies that have from $2 million to $20 million of EBITDA, more than $10 million in revenue, and have enterprise values from $10 million to $150 million. Sectors of interest include consumer products, food and beverage, business services, logistics, and manufacturing.

“We have enjoyed spending time with Epicurean’s founder’s Supreya and Steven Voelkening and are honored they have entrusted us with the business going forward,” said Patrick Moulder, the founder and managing partner of Wheel Capital. “We also look forward to partnering with Chef David Friedman, Chef Erik Sandoval, Chef Chris Young and the entire Epicurean team to continue providing best-in-class products and service to all of our customers.”

Las Vegas-based Wheel Capital Partners makes control investments in North American-based companies that have up to $4 million in EBITDA. The firm will also make select non-control investments of $1 million to $5 million.

© 2023 Private Equity Professional | February 28, 2023