O2 Sponsor Finance, a division of Old Second National Bank, provided the senior bank financing to back the acquisitions by Soundcore Capital Partners of ACI Asphalt & Concrete (ACI) and ACS Asphalt Concrete Solutions (ACS).
Soundcore specializes in North America-based buy-and-build investments in the lower middle market. Target companies typically have revenues up to $150 million and are active in business and outsourced services, industrial services, specialty manufacturing, and value-added distribution sectors.
New York City-headquartered Soundcore formed its ACI Holdings platform to acquire ACI in July 2022 and in January 2023 added on with the buy of ACS. O2 Sponsor Finance was the senior secured credit facilities administrative agent and lead arranger for the more than $44 million in senior secured credit facilities used in these transactions.
ACI is a provider of asphalt and concrete installation, maintenance, and repair services to commercial parking lot and multi-family homeowner associations. The company, led by founder and CEO Jim Bebo and President Justin Pomerleau, is headquartered northwest of Minneapolis in Maple Grove, Minnesota.
ACS is a provider of asphalt and concrete installation, maintenance, and repair services for commercial and multi-family homeowner association customers in the greater Minneapolis metropolitan area. The company is headquartered 15 miles north of Minneapolis in Blaine, Minnesota.
“The combination of ACI and ACS creates the true market leader in the Minneapolis/Twin Cities area,” said Thom Karle, a senior vice president at O2 Sponsor Finance. “The combination is evidence of Soundcore’s commitment to their targeted buy-and-build growth strategy in the commercial paving space.”
In addition to the facilities made available by O2 Sponsor Finance, co-lender senior financing was provided by Old National Bank, and Northstar Capital provided subordinated debt financing.
O2 Sponsor Finance is a national provider of cash flow-based loans to lower middle market businesses with $10 million to $100 million in revenue and $2 million to $10 million in EBITDA. Typical investment sizes range from $5 million to $25 million with syndication capabilities up to $60 million. The firm focuses on supporting private equity sponsors, independent sponsors, and family offices in their acquisition or recapitalization of lower middle market companies.
Chicago-headquartered O2 Sponsor Finance was formed by Old Second Bancorp in January 2022 and is led by President Joe Gaffigan, the former president and co-founder of TCF Capital Funding. Mr. Gaffigan led TCF Capital Funding from 2012 to 2021 until TCF Bank was acquired by Huntington National Bank in June 2021. He remained with Huntington as the president of its sponsor finance unit until spinning out to join Old Second to form O2 Sponsor Finance.
Old Second Bancorp has $5.9 billion in assets and is headquartered near Chicago in Aurora, Illinois. O2 Sponsor Finance is headquartered in Chicago.
Mr. Gaffigan can be reached via email at jgaffigan@oldsecond.com and Mr. Karle can be reached at tkarle@oldsecond.com.
© 2023 Private Equity Professional | April 11, 2023
