Archives for May 5, 2023

Nice Ride. Corinthian Buys Ultimate Toys

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Corinthian Capital has invested in Ultimate Toys, a designer and marketer of Class B recreational vehicles.

Ultimate Toys’ conversion vehicles and teardrop trailers are designed to facilitate premium excursion experiences and luxury road travel. The company’s products use Mercedes-Benz, Dodge Ram, Jeep, and teardrop camper platforms and are sold directly to the consumer and through a nationwide network of dealers.

Source: Ultimate Toys

Ultimate Toys was founded in 2017 by the father and son team of Gary and Josh Green and is headquartered near Cincinnati in Loveland, Ohio.

“The opportunity to be the first institutional investor in Ultimate Toys, a rapidly growing, innovative business with a large addressable market, fits squarely within Corinthian’s target investment parameters”, said Kenneth Clay, the managing partner at Corinthian.

Class B recreational vehicles, also known as camper vans, are smaller than Class A and C recreational vehicles but still offer many of the same features. They are easier to drive and park, making them a popular choice for those who want all the amenities of a recreational vehicle without a large vehicle.

Increasingly, Class B RVs are incorporating advanced technology, including smart home systems, integrated GPS, and touchscreen controls for climate and entertainment systems; as well as eco-friendly options, such as solar panels, energy-efficient appliances, and composting toilets.

Source: Ultimate Toys

Class B RVs are also becoming increasingly popular among younger generations, who are seeking a more minimalist and adventurous lifestyle. This has led to a rise in the popularity of vanlife culture, which celebrates the freedom and flexibility of living on the road. According to industry sources, the Class B recreational vehicle market is expected to see annual growth of 5.3% from 2023 to 2030.

“We are excited to partner with Ultimate Toys and its strong management team to support the company through its next phase of growth,” said Charles Bayer, a vice president at Corinthian.

Corinthian targets investments in North America-based companies with EBITDA between $5 million and $30 million that are active in the light manufacturing and assembly, distribution, and services sectors. The firm was founded in 2005 and is headquartered in New York City with an additional office in Boston.

New York City-based Turning Rock Partners, led by CEO and Managing Partner Maggie Arvedlund,  provided the debt financing for the buy of Ultimate Toys.

Livingstone, a middle market investment bank, was the financial advisor to Ultimate Toys.

© 2023 Private Equity Professional | May 5, 2023

LFM Continues Build of Accelevation

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Accelevation, a portfolio company of LFM Capital, has acquired Workplace Modular Systems.

Accelevation is a vertically integrated group of manufacturing companies serving the data center, electric vehicle and robotic markets.

Accelevation’s subsidiary divisions include Conatech, an Ohio-based provider of data center containment and caging equipment. Data center containment equipment includes physical barriers such as cabinets, walls, and doors that are used to contain the hot air generated by IT equipment. Another subsidiary of Accelevation is Skylab Manufacturing, a Utah-based maker of extruded aluminum components and in-plant material management and engineering support services.

Rounding out Accelevation’s subsidiaries are three Ohio-based businesses – Southeast Tool & Die, Revolution Iron Works, and Coach Tool & Die.

Accelevation was acquired by LFM through its third fund in August 2022. The buy of Workplace Modular Systems is the company’s first add-on acquisition under LFM ownership.

Workplace Modular Systems is a designer and manufacturer of workstations, workbenches, assembly stations, and tables used in the biotechnology, laboratory and industrial sectors. The company, led by President and CEO Jim McEleney, was founded in 1946 and is based in Londonderry, New Hampshire.

Source: Workplace Modular Systems

Workplace, led by President and CEO Jim McEleney, was founded in 1946 and is based in Londonderry, New Hampshire.

“Throughout its 60+ year history, Workplace has remained dedicated to building solid, well-crafted products with American-made durability,” said Mr. McEleney. “We are proud of our strong reputation for innovative design, superior craftsmanship and responsive customer service, and we look forward to partnering with Accelevation to further expand our applications.”

Accelevation, led by President and CEO Michael Rubiera, is headquartered in Springboro, Ohio. “We were immediately impressed with Workplace’s deep product expertise and diverse, loyal customer base,” said Mr. Rubiera. “There are attractive potential synergies from the acquisition, particularly related to SkyLab, which will further fuel our growth.”

“LFM is excited about the complementary addition of Workplace to the Accelevation platform, which will broaden the product offering available to current and new customers,” said Chris Lin, a managing director at LFM. “We look forward to working closely with the Workplace team to scale the combined business.” Other members of the LFM transaction team included Executive Managing Director Steve Cook and LFM Senior Associate Ryan Richardson.

Abacus Finance Group was the Senior Secured Credit Facilities Administrative Agent and Lead Arranger for senior secured credit facilities to support the acquisition of Workplace by Accelevation.

“This was our fourth transaction with LFM Capital, and once again we were able to meet their desire for a smooth execution in a short timeframe, just one of the many attributes of our Total Partnership Approach,” said Tim Clifford, the president and CEO of Abacus.

“As in past transactions, the Abacus team served up fast and efficient execution,” added Mr. Lin.

“The team at LFM is great to work with, having such a disciplined, market focus,” added Abacus managing director Eric Petersen. The Abacus transaction team included both Mr. Petersen and Associate Greg Scanlon.

Abacus provides cash flow-based senior financing to private equity and family office-sponsored, lower-middle market companies that have EBITDA between $3 million and $15 million. Debt facilities can be as large as $50 million. Since Abacus’s founding in June 2011, it has closed over $3 billion in financings. Abacus, led by President and CEO Tim Clifford, is headquartered in New York City and is an affiliate of New York Private Bank & Trust which was founded in 1850.

LFM invests in United States-based manufacturing and industrial services companies with at least $3 million of EBITDA and enterprise values from $15 million to $125 million. LFM was formed in May 2014 by Steve Cook, Rick Reisner, and Dan Shockley and is headquartered in Nashville, Tennessee.

© 2023 Private Equity Professional | May 5, 2023

Shoreline Sells Mr. Greens to Sterling Investment Partners

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Shoreline Equity Partners has closed its sale of Florida Veg Investments (DBA Mr. Greens) to Sterling Investment Partners. The Mr. Greens management team will continue to lead the company and maintain a significant ownership position in partnership with Sterling.

Mr. Greens is a distributor of produce, dairy, and dry goods to more than 3,500 Florida and Texas-based restaurants, hotels, country clubs, caterers, grocery stores, and retail stores.

Source: Mr. Greens

The company makes product deliveries 365 days a year, 7 days a week, with multiple delivery runs every day. Mr. Greens, led by Chairman Peter Politis and CEO Nick Politis, is headquartered in Miami, Florida.

Peter Politis acquired Mr. Greens in 2011 and over the next eight years, he grew the business from six employees in a 3,000-square-foot facility to over 270 employees across three facilities with a total of 125,000 square feet.

Source: Mr. Greens

“We are thrilled to embark on this new chapter with Sterling as our next partner,” said Nick Politis. “Our platform is perfectly suited to continue taking advantage of the migration that has swept across the Southeast since 2019. Our partnership with Shoreline was exactly what we envisioned, and they lived up to everything they promised when we first met them in 2019. We are incredibly appreciative of the partnership and grateful for their support over the years.”

“Nick and the entire team at Mr. Greens have done an incredible job navigating the most challenging times the industry has experienced and gained incredible market share as foodservice demand has rebounded,” said Mike Hand and Peter Franz, co-founders of Shoreline, in a released statement. “We are forever grateful to Nick and Peter Politis for selecting us as their first institutional partner. One of the greatest joys we experience at Shoreline is recognizing how well-positioned our businesses become ahead of their next cycle of ownership. That statement could not be more fitting than for Mr. Greens.”

In addition to Mr. Hand and Mr. Franz, the Shoreline transaction team included Principal Ian Garland, Principal Zach Mittelmark, Senior Associate Mike Mancini, and Associate Mike Dolak.

“We’re so proud of the Mr. Greens team for the many achievements made under Shoreline’s ownership,” said Peter Politis. “Over the last several years Mr. Greens has made substantial investments in people and infrastructure while maintaining a best-in-class growth profile. We have collectively built a disruptive food distribution platform poised for continued excellence in its next stage of growth.”

Shoreline invests up to $100 million per transaction in support of buyouts, recapitalizations, and corporate divestitures. Typical target companies will have enterprise values from $50 million to $250 million and EBITDA of $5 million to $25 million. Sectors of interest include specialized manufacturing, value-added distribution, and business and facility services.

In January 2020, Shoreline held an oversubscribed and hard-cap close of its first fund, Shoreline Equity Partners Fund LP, with $300 million in capital commitments. The firm was founded in March 2019 and is based near Jacksonville in Neptune Beach, Florida.

Westport, Connecticut-based Sterling, the buyer of Mr. Greens, invests in distribution and business services companies with revenues of $50 million to $500 million and EBITDA of $10 million to $50 million. Since its founding in 1991, Sterling has overseen the investment of $2.6 billion of equity across 39 platform investments and 130 add-on acquisitions. In January 2023, Sterling held a final and above-target closing of Sterling Investment Partners IV LP with $934 million in capital commitments.

© 2023 Private Equity Professional | May 5, 2023

Pacific Avenue’s First Fund Closes at $500 Million

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Pacific Avenue Capital Partners has held a final, oversubscribed, and hard cap close of its first fund, Pacific Avenue Fund I LP, with $500 million of capital commitments.

Fund I was backed by a range of investors including insurance companies, consultants, endowments and foundations, funds of funds, family offices, and individuals.

Pacific Avenue was founded in 2018 by its managing partner Chris Sznewajs and is headquartered in El Segundo, California. Before founding the firm, Mr. Sznewajs was a principal with The Gores Group where he focused on investing in special situations and corporate carve-outs in the industrials sector.

“We would like to thank our investors for their excitement in supporting the Pacific Avenue team. We are both honored and grateful for their support,” said Mr. Sznewajs. “The new fund will allow Pacific Avenue to continue our emphasis on corporate divestitures and other complex situations to create value for our stakeholders.”

Pacific Avenue Capital Partners specializes in middle-market corporate divestitures, carve-outs, and other complex transactions. The firm’s specific targets are North American-focused companies that have up to $1 billion in revenue and up to $50 million of EBITDA. Pacific Avenue is a control investor and will acquire both performing and underperforming businesses across a wide range of industries, making the firm effectively industry agnostic.

Pacific Avenue’s new fund has already closed on one platform investment with the October 2022 buy of Sunrich Products, the sunflower and roasted snack division of publicly traded SunOpta (NASDAQ: STKL). Sunrich is an integrated provider of sunflower seeds and chickpeas used in the food ingredient, snack food, and birdseed markets.

Source: Sunrich Products

Sunrich is headquartered 290 miles northwest of Minneapolis in Crookston, Minnesota. At the close of the acquisition, Pacific Avenue named Kent Johnson, the general manager of Sunrich, as the company’s new chief executive officer.

In addition, last month, Pacific Avenue formed Resin Solutions to acquire three specialty resin product lines of Cray Valley, a specialty chemical subsidiary of TotalEnergies, a French multinational energy company. This carve-out transaction, which is expected to close in the second or third quarter, includes four production sites in the United States, one production site in Italy, and customer relationships across the adhesives, sealants, packaging, tapes and labels, and coatings markets. Resin Solutions is headquartered near Philadelphia in Exton, Pennsylvania.

Lazard Frères was the placement agent used by Pacific Avenue and Weil, Gotshal & Manges provided legal services.

© 2023 Private Equity Professional | May 5, 2023