Archives for December 5, 2023

May River Acquires RLE Technologies

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RLE Technologies, a maker of environmental monitoring equipment, has been acquired by May River Capital.

RLE designs and manufactures wired and wireless environmental monitoring equipment, fluid leak detection, and airflow management products used in data centers and other critical facilities to prevent downtime incidents and to improve operational efficiencies.

Source: RLE Technologies

RLE goes to market under its Falcon brand of facility monitoring products, SeaHawk fluid leak detection products, Triad airflow management products, and Raptor system integration products. Over 20 million feet of RLE leak detection cable are installed in facilities worldwide.

RLE sells its products to OEMs, distributors, and value-added reseller partners. RLE, led by CEO Tim Hirschenhofert, was founded in 1984 by Don Raymond and his family and is headquartered in Fort Collins, Colorado.

Source: RLE Technologies

Doug Keeports, a member of May River’s executive resource group and an experienced executive within the facilities detection and monitoring sector, will serve as a board member at RLE. In addition, Rick Weiler, the current CEO of May River’s portfolio company Dickson, an Illinois-based maker of environmental monitoring systems that was acquired in 2018, will also serve as a board member at RLE.

Mr. Hirschenhofer and the entire RLE senior management team will continue to lead the organization in partnership with May River. “We are excited about the next phase of growth for RLE in partnership with May River,” said Mr. Hirschenhofer. “The financial and operational resources that May River brings will allow us to best serve our customers going forward.”

“RLE represents a platform acquisition for May River focused on environmental monitoring within the data center and critical facilities end markets,” said Patrick McVickers, a vice president at May River. “May River is excited to partner with Tim Hirschenhofer and the entire RLE management team and to continue to support them in growth.”

Chicago-based May River invests from $20 million to $90 million of equity in companies with EBITDA of $3 million to $15 million and enterprise values of $20 million to $150 million. Sectors of interest include advanced manufacturing, engineered products and instrumentation, specialized industrial services, and value‐added industrial distribution services. May River held a hard cap close of its third fund, May River Capital Fund III LP, with $500 million in limited partner commitments in July 2023.

Integris Partners was the financial advisor to RLE Technologies. Tree Line Capital Partners provided debt financing to back the acquisition of RLE by May River.

© 2023 Private Equity Professional | December 6, 2023

Sysco Acquires Edward Don from Vestar

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Vestar Capital Partners has sold Edward Don & Co., a distributor of foodservice equipment and supplies, to Sysco Corporation.

Edward Don & Company (DON) is a distributor of foodservice equipment and supplies. The company stocks more than 12,000 SKUs from 3,000 suppliers and its products include dinnerware, glassware, flatware, linens, buffet and table service, apparel, bar and kitchen supplies, furniture, fuel, cleaning products, paper towels, and tissues.

Customers of DON include all types of foodservice businesses including independent restaurants, national chains, health care, hospitality, country clubs, schools and universities, government institutions and foodservice management. In addition to its distribution business, DON also operates a foodservice equipment division which provides kitchen design, equipment purchasing, and installation.

Source: Edward Don & Co.

According to the 2023 Distribution Giants report published by Foodservice Equipment & Supplies magazine, DON had sales in 2022 of $1.3 billion. DON was founded by the Don family in 1921 and was acquired by Vestar in March 2017.

During Vestar’s ownership term the company closed four add-on acquisitions with the buys of Shervan Colonel Equipment, a Nevada-based designer and installer of commercial kitchens (June 2019); Myers Restaurant Supply, a California-based distributor of foodservice equipment and supplies and a provider of restaurant and commercial kitchen design and build services (May 2019); Smith & Greene Company, a Washington-based provider of foodservice equipment and supplies, and a provider of commercial kitchen design and build services (December 2017); and Atlanta Fixture and Sales Company, a Georgia-based foodservice equipment and supplies distributor (November 2017).

Source: Edward Don & Co.

DON has just over 1,200 employees and 1.4 million sq. ft. at seven distribution centers – in Chicago, Philadelphia, Atlanta, Miami, Dallas, Los Angeles, and Seattle – with a headquarters near Chicago in Woodridge, Illinois.

Post-closing, DON will operate as a standalone specialty division within Sysco, and DON CEO and President Steve Don will continue to manage the business alongside DON’s leadership team.

“Vestar was a great partner to DON during a period of both unprecedented growth but also unprecedented pandemic-related challenges, for our company,” said Mr. Don. “We appreciate Vestar’s support of our customer-focused, service-oriented, integrated growth strategy over the past years, and look forward to continuing to deliver for all DON stakeholders in our exciting next chapter with Sysco.”

“It’s been a privilege to support Steve Don and DON management to help them achieve their growth objectives,” said Rob Rosner, a founding partner at Vestar. “When we originally invested in the business, we believed we were backing one of the strongest management teams and one of the highest-quality platforms in the foodservice equipment and supplies distribution space. That thesis has proven out many times over the years, and this successful outcome is yet another proof point.”

Sysco (NYSE: SYY) is a marketer and distributor of various food and related products to the foodservice or food-away-from-home industry in the United States, Canada, the United Kingdom, France, and internationally. The Houston-headquartered company has annual revenue of more than $75 billion and operates approximately 330 distribution facilities worldwide that service over 90 countries.

“We’re incredibly proud of what DON was able to accomplish during our partnership,” added Nikhil Bhat, a co-head of investments at Vestar. “The company continued its long track record of successful organic growth and established itself as a premier platform in its industry, all while navigating a disruptive global pandemic. We’re grateful to the DON team for their leadership and hard work over our nearly seven year partnership together in delivering this terrific outcome.”

Vestar specializes in both minority and control management buyouts and growth capital investments. Sectors of interest include consumer, business and technology services, and healthcare. Since Vestar’s founding in 1988, the firm has completed more than 92 platform investments, more than 200 add-on acquisitions, with a total value of more than $52 billion. Vestar has offices in New York City and Denver.

J.P. Morgan Securities and William Blair were financial advisors to DON and Vestar.

© 2023 Private Equity Professional | December 6, 2023

Makai’s Paladin Buys Texize

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Paladin Holdings, a portfolio company of Makai Capital Partners, has acquired Texize, a manufacturer of industrial and commercial soaps, and detergents.

Greenville, South Carolina-based Texize was founded in 1946 as a maker of industrial and household cleaning products. In 1984, Dow Chemical agreed to acquire the company’s consumer products division which included numerous brands including Janitor in a Drum, Glass Plus, Wood Plus, Fantastic, Spray N Wash, and Vivid Detergent. Since the sale to Dow, Texize has focused on producing industrial grade cleaning products and chemicals including cleaners, degreasers, glass cleaners, laundry and enzyme products, janitorial and maintenance products used in a variety of industrial production processes.

“I am excited to see this next phase for Texize,” said Steve Gilliam, the former owner of Texize. “Texize is well respected throughout our markets and, with the additional resources from Paladin Holdings, I believe Texize will strengthen its product offerings and increase production capacity to reach more customers.”

“We are very pleased to welcome Texize to the Paladin Holdings portfolio,” said Andrew Fulford, the managing partner of Makai Capital. “Texize has strong brand equity and a customer loyalty that make it an ideal fit for our market positioning and portfolio strategy.”

In addition to Texize, Paladin Holdings also owns New Life Chemical & Equipment, a Greenville, South Carolina distributor of surplus chemicals and a wholesale manufacturer of commercial cleaning products. New Life was acquired by Paladin in November 2023.

Joining Makai on the buy of Texize as equity co-investors are Capital For Business and Konza Valley Capital. St. Louis-based Parkside Financial Bank & Trust provided senior debt.

Makai Capital invests in North America-based companies that have enterprise values up to $100 million and EBITDA of less than $10 million. Sectors of interest include  specialty chemicals, environmental services, sustainable materials and packaging. Makai is headquartered north of Charlotte in Davidson, Noth Carolina.

© 2023 Private Equity Professional | December 6, 2023

New Heritage Beats Target on Fund IV

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New Heritage Capital has held an above target and oversubscribed closing of its fourth fund, New Heritage Capital IV LP, with $438 million in capital.

Fund IV’s limited partners include North America and Europe-headquartered consultants, endowments, insurance companies, public pensions, family offices, asset managers and funds of funds.

“We are grateful for the strong support and continued partnership from both our existing and new investors, particularly in such a challenging fundraising environment,” said Mark Jrolf, a co-founder and  managing senior partner at Heritage. “We believe that our strategy of partnering with successful founders through our innovative Private IPO structure will continue to create market differentiation, accelerate growth and drive returns across our portfolio.”

“Our Private IPO partnership model is very relevant in today’s market,” said Charlie Gifford, a co-founder and senior partner at New Heritage. “By offering up to 50% in continued ownership, we provide owners with the opportunity to realize significant liquidity today while participating meaningfully in the future growth in their company’s value.”

Boston-based New Heritage invests from $15 million to $40 million of minority or majority equity in companies with $4 million to $20 million of EBITDA. Sectors of interest include business services, healthcare, and manufacturing.

In March 2023, New Heritage sold medical device manufacturer Rhythmlink International to Graham Partners. Rhythmlink is a South Carolina-headquartered manufacturer of single-use neurodiagnostic electrodes that are used to identify, elicit, and record neurophysiological signals. New Heritage invested in Rhythmlink in 2019.

“We have built our organization around a culture of collaboration, and we are proud of our team, the founders and CEOs we work with and the value we’ve created for our investors,” said Nickie Norris, a co-founder and senior partner at Heritage.

With the closing of Fund IV and since its founding in 2006, Heritage has now raised approximately $1 billion in committed capital and invested in more than 15 platform companies and 30 add-on acquisitions.

Harris Williams was the placement agent for Fund IV and Latham & Watkins provided legal services.

© 2023 Private Equity Professional | December 6, 2023