Archives for April 13, 2023

Transom Capital Group has completed the carve-out of the Bose Professional division from Bose Corporation.

Bose designs, manufactures and sells audio equipment and related products used by consumers, businesses, and professionals. The company’s products range from headphones and speakers to soundbars and home theater systems.

The Bose Professional division provides audio products – sound systems, loudspeakers, amplifiers, mixers, and digital signal processing equipment – used in commercial and professional applications including concert venues, churches, sports stadiums, hotels, and conference centers.

The division also provides a range of services including system design, installation, training, technical support, maintenance and repair. Bose Professional is headquartered in Framingham, Massachusetts, and is led by CEO Michael Bennett.

“We’re excited about the new opportunities this will enable us to explore,” said Mr. Bennett. “Our customers are the key reason we develop systems that are easy to design, easy to install and easy to operate. As the pro-AV industry continues to evolve, our focus is on ways to help our customers be more successful and clear the path to great sound.”

Bose Professional division’s portable public address systems business – smaller, compact and easy-to-transport audio systems that usually include a microphone, amplifier, and speakers that are powered by a battery or electricity – is not included in the sale to Transom.

“We’re proud of what Bose Professional has accomplished – its legacy in the professional AV market and the diverse list of amazing installations it has completed all over the globe,” said Lila Snyder, the CEO of Bose. “The sale to Transom will provide Bose Professional the additional attention it needs to support the professional audio customer and to continue to develop products and technologies that stand out in the industry. It will also allow Bose to focus more deeply on our core business – creating amazing audio experiences for on-the-go, at home and in the car.”

Bose Corporation was founded in 1964 by Dr. Amar G. Bose – a professor of electrical engineering and sound engineering at MIT –  and today is still owned by the Bose family. The company is headquartered near Boston in Framingham, Massachusetts, and operates facilities in North and South America, Europe, Asia, and Australia.

“Bose Professional’s tenure in the professional audio business, its standout product portfolio and customers, as well as its team dedicated to researching, engineering and delivering new and innovative products, made it a compelling business for us to bring into our portfolio,” said Russ Roenick, a co-founder and managing partner at Transom. “We are working closely with Bose to ensure business continuity for Bose Professional going forward, and we look forward to continued success for the business as an independent company.”

Transom is headquartered near Los Angeles in El Segundo, California, and invests in companies with enterprise values between $10 million and $150 million.

Progress Partners was the financial advisor to Bose on this transaction.

© 2023 Private Equity Professional | April 13, 2023

Sky Island Capital has acquired Kaufhold’s Kurds in partnership with the founding Kaufhold family.

Kaufhold’s Kurds is a wholesale manufacturer of hand-breaded cheese curds that are sold to food service distributors across the United States. A cheese curd is a small, solid piece of fresh cheese that has not been aged or processed. It has a mild, slightly tangy flavor and is often made from cow’s milk. The company’s products are available in a range of flavors including original, jalapeño, garlic, sriracha, and Chesapeake Bay (celery salt, paprika, thyme, bay leaves, and parsley). According to the company, Kaufhold’s is the largest dedicated breaded cheese curd manufacturer in the United States with sales to all 50 states.

Kaufhold’s Kurds was founded in 1995 by brothers John and Scott Kaufhold and today is led by John’s daughter, Renee Drummond, and her husband Anthony. The company is headquartered 50 miles east of Minneapolis in Ellsworth, Wisconsin.

“We couldn’t be more excited to partner with Kaufhold’s Kurds and carry on the vision that the Kaufhold family has for the growth of breaded cheese curds in Wisconsin and beyond,” said Will Dobbs, a partner at Sky Island. “Kaufhold’s is as authentic as it gets – picking up the fresh curds daily, hand-breading, and flash freezing to ensure the highest quality product and ability to ship nationwide. The product has a fanatical following and we are excited to support Renee and Anthony in this next chapter of the family business.”

“We are very excited and enthusiastic to partner with Sky Island,” said CEO Anthony Drummond. “They have an extremely skilled team that fits within the culture of Kaufhold’s Kurds perfectly. We are also thrilled to retain some equity in the business. Furthermore, we strongly believe our partnership with Sky Island and the support provided from their team will help us grow and greatly prosper as a company.”

Dallas-based Sky Island invests from $10 million to $50 million of equity in North America-based manufacturing companies that have revenue of $10 million to $200 million and EBITDA of $5 million to $15 million. Sectors of interest include aerospace and defense; auto and transportation; building products; consumer products; food and beverage; industrial products; metals; packaging; and specialty chemicals.

The buy of Kaufhold’s is the fifth investment made by Sky Island’s debut fund and follows the acquisitions of USA Industries, a Texas-based manufacturer of equipment used in process manufacturing facilities (February 2022); Polished Metals, a New Jersey-based polisher and supplier of architectural and ornamental metals (February 2020); Valley Forge Flag Company, a Pennsylvania-headquartered maker of branded, “Made in the USA” American flags, military flags, and state flags (June 2021); and SkyMark Refuelers, a Missouri-headquartered maker of custom work trucks used in the fuel delivery sector (December 2021).

© 2023 Private Equity Professional | April 13, 2023

Investcorp has made a majority investment in Shearer Supply, an independent distributor of heating, ventilation and air conditioning equipment.

Partnering with Investcorp on this transaction are members of Shearer’s management team, the Shearer family, and PNC Riverarch Capital which all remain shareholders in the company. PNC Riverarch first invested in Shearer Supply in September 2021.

Shearer is one of the nation’s largest independent distributors of HVAC equipment, parts and supplies used by more than 5,500 residential and commercial customers. The company’s parts, supplies and accessories are sourced from over 300 vendors and its product lines include American Standard Residential and Commercial HVAC, Ameristar Heating and Air Conditioning, and Samsung HVAC.

Shearer Supply was founded in 1983 and is headquartered near Dallas in Farmers Branch, Texas. The company has 22 branch locations in Texas, Oklahoma, Arkansas, Tennessee and Louisiana.

“Investcorp has an established history of working with companies like Shearer and has demonstrated a strong track record in HVAC and specialty distribution,” said Michelle Shearer-Rodriguez, the CEO of Shearer Supply. “We are looking forward to partnering with them on our next phase of growth and leveraging their strong industry insights.”

“Shearer operates in a large, resilient, and highly fragmented market driven by non-discretionary replacement demand and will continue to benefit from strong secular tailwinds including an aging housing stock, shortening replacement cycles, and favorable regulation, in addition to its attractive Southern US geographic footprint,” said Dave Tayeh, the head of North American private equity at Investcorp.

The buy of Shearer follows Investcorp’s final close in March of Investcorp North American Private Equity Fund I LP with $1.2 billion in capital commitments.

Fund I focuses on control buy-outs of North America-based, family- and founder-owned, middle-market services companies with a specific interest in tech-enabled, knowledge and professional, data and information, supply chain, industry, and specialty consumer services. Shearer Supply is the eighth portfolio company for Fund I.

“Shearer provides a compelling value proposition for both contractors and original equipment manufacturers, acting as a one-stop-shop local partner with a breadth of products, expertise, and value-added services,” said Steve Miller, a managing director at Investcorp. “This is an impressive family-owned and run business that has differentiated itself in its ability to scale and grow in excess of the market throughout its history and we are thrilled to be partnering with the company’s highly motivated management team.”

“We are excited to partner with the Shearer family to drive organic growth and further expansion,” added Mr. Tayeh. “We have experienced robust activity across our North American private equity platform this year, underscoring the strength of our strategy in partnering with growing, founder-led businesses as they look to scale their businesses.”

Investcorp is active in alternative investments, including private equity, real estate, absolute return investments, and credit management. Since its founding in 1982, Investcorp has closed more than 200 private equity transactions across a range of sectors, including retail and consumer products, technology, business services, and industrials. Investcorp, with $50 billion of assets under management, has more than 500 employees with multiple offices, including in New York City, London, and Bahrain.

Pittsburgh-based PNC Riverarch invests from $10 million to $50 million in privately held companies headquartered throughout North America. Sectors of interest include outsourced services, specialized manufacturing, and value-added distribution. PNC Riverarch is a division of PNC Capital Finance, which in turn is a subsidiary of The PNC Financial Services Group (NYSE: PNC).

© 2023 Private Equity Professional | April 13, 2023