FS

Platinum Buys Club Car from Ingersoll Rand

April 13, 2021 by John McNulty

Ingersoll Rand has agreed to sell its specialty vehicle technologies segment (Club Car) to Platinum Equity for $1.7 billion.

Club Car is a maker of low-speed, electric and gas-powered vehicles used in the golfing, commercial and consumer sectors. Augusta, Georgia-based Club Car was founded in 1958 and was purchased by a group of eight former executives of rival E-Z-GO (also located in Augusta and owned by Textron) in 1978. Club Car was acquired by Ingersoll Rand in 1995.

According to Ingersoll Rand, the purchase price represents approximately 12.1x Club Car’s 2020 adjusted EBITDA. Click HERE to review a PDF of Ingersoll Rand’s investor presentation on the sale of Club Car.

“Today’s announcement to divest Club Car demonstrates swift progression on our transformation journey,” said Vicente Reynal, CEO of Ingersoll Rand. “The Club Car divestiture achieves a premium valuation for the leader in the golf, commercial and consumer low-speed vehicle market.”

“Club Car has a long history of leadership in golf, utility and consumer low-speed vehicles, and we look forward to nurturing their core business and supporting the diverse needs of the company’s customers,” said Tom Gores, the CEO of Platinum Equity. “We are excited to partner with the Club Car team and support the business as it executes on its strategy of operational excellence and ongoing, profitable commercial growth.”

Platinum Equity invests in a range of industries including manufacturing, distribution, transportation and logistics, equipment rental, metals services, media and entertainment, technology, and telecommunications. The firm is currently investing from Platinum Equity Capital Partners V LP, a $10 billion buyout fund, and Platinum Equity Small Cap Fund LP, a $1.5 billion buyout fund focused on the lower middle market. The firm has completed more than 300 acquisitions since its founding in 1995 and is headquartered in Beverly Hills.

Ingersoll-Rand (NYSE: IR) is a diversified industrial manufacturing company formed in 1905 by the merger of Ingersoll-Sergeant Drill Company and Rand Drill Company. The company is based near Dublin in Swords, Ireland.

BofA Securities is leading the debt financing for Platinum Equity and Club Car, and Goldman Sachs is the financial advisor to Ingersoll Rand on this transaction.

The buy of Club Car by Platinum is expected to close by the end of the third quarter.

TZP Invests in Kindred Bravely

April 13, 2021 by John McNulty

TZP Group has acquired a majority equity interest in Akerson Enterprises (DBA Kindred Bravely) a provider of maternity apparel.

Kindred Bravely is a direct-to-consumer and digital brand that specializes in apparel for pregnant and nursing mothers. The company’s products include bras, loungewear, underwear, and sleepwear. In 2019, the company was ranked #20 on Inc.com’s list of the 5,000 fastest-growing, privately held companies in the US.

Kindred Bravely was founded in 2015 by Deeanne Akerson and Garret Akerson and is headquartered north of San Diego in Oceanside, California.

“We are so glad to be partnering with TZP,” said Ms. Akerson, who along with her husband, Garret, will continue as co-CEOs and maintain a significant stake in the business. “We met with many of the professionals at TZP and were impressed by their ‘Partner of Choice’ culture and their ability to add value through their extensive experience in direct-to-consumer brands.”

“Kindred Bravely is an incredible brand with a loyal and growing customer base,” said Dan Gaspar, a partner at TZP. “We are excited to partner with the Akersons and the Kindred Bravely team as the company continues its rapid growth trajectory.”

Mr. Gaspar led the transaction for TZP with support from Michael Morgan, Sergina Lambert, Rodney Eshelman, Erin O’Brien Edwards and Jarrad Berman.

New York City-based TZP Group makes control and minority investments of between $10 million and $100 million in lower and mid-market companies that are active in consumer products, sale and marketing, travel and hospitality, industrial and tech-related services, and education sectors. Equity for the buy of Kindred Bravely was sourced from TZP Small Cap Partners II LP which invests in companies with less than $10 million of EBITDA.

Objective Capital Partners, a Los Angeles and San Diego-based investment bank, was the financial advisor to Kindred Bravely.

Branford Castle Buys Lie Detector Maker

April 9, 2021 by John McNulty

Branford Castle has acquired Lafayette Instrument, a maker of polygraph equipment and other scientific instruments.

Lafayette’s polygraph products were first introduced in 1972 and include software and algorithms, computers, heart rate monitors, headsets, arm cuffs, electrodes, and activity sensors.

These products are used by federal law enforcement and security agencies, as well as state and local law enforcement agencies. According to Lafayette, it has sold more polygraph and credibility assessment instruments to private examiners, government, and military organizations than any other manufacturer in the world. Lafayette was founded in 1947 by Max Wastl and is headquartered 60 miles northwest of Indianapolis in Lafayette, Indiana.

Lafayette also provides neuroscience products – mouse and rat activity systems and mazes, test and sleep deprivation chambers, and touch measurement systems – to both public and private research laboratories.

Branford partnered on this transaction with Lafayette’s CEO and owner Jennifer Rider, Vice President of Operations Steve Rider, and other members of the company’s senior management team.

“Steve and I are proud of our family’s leadership of Lafayette over the last 25 years,” said Ms. Rider. “We are excited about this new chapter of the company’s development as we work with Branford Castle to provide the best service to our customers and achieve new levels of growth.”

“We are excited to partner with Jennifer and Steve Rider at Lafayette,” said Laurence Lederer, a senior managing director at Branford Castle. “The company’s long-standing position as the leader in the polygraph market, along with their growing suite of proprietary neuroscience products, make it a terrific platform for continued growth.” In addition to Mr. Lederer, the Branford transaction team included Vice President Ceon Francis.

The buy of Lafayette is the second platform for Branford’s second fund, which closed in 2019, and follows the firm’s August 2020 buy of Fibrix Filtration, a Charlotte-based maker of air filtration media products that are used in commercial and industrial HVAC systems.

Brookside Capital Partners provided mezzanine debt financing to support the buy of Lafayette and Byline Sponsor Finance, a division of Byline Bank, provided the senior debt financing. Dinan Capital was the financial advisor to Lafayette on this transaction.

New York City-based Branford Castle invests in companies that have enterprise values of up to $100 million and EBITDAs of less than $15 million. Sectors of interest include consumer products and services, commercial distribution, industrials and specialty manufacturing, business services, and logistics.

Main Street Invests in Grand Flower Growers

April 9, 2021 by John McNulty

Main Street Capital has made a minority investment in Grand Flower Growers (GSG), a grower and distributor of plants and flowers.

GFG products includes annuals, mums, poinsettias, perennials and other floral arrangements. The company supplies its products to Home Depot garden centers in the greater Chicago metropolitan area.

GFG was founded in 1999 and operates three greenhouses with a combined 700,000 sq. ft. near Grand Rapids in Wayland, Michigan. The business also sources additional products that are grown under contract with third parties with a total of 1,000,000 sq. ft. of greenhouse space.

Main Street partnered with the company’s existing owners and senior management team on this investment. Main Street provided $20.6 million in capital through a combination of a senior secured term loan and an equity investment.

Houston-based Main Street Capital (NYSE: MAIN) provides long-term debt and equity capital to middle-market and lower middle-market companies in that generally have annual revenues ranging from $10 million to $150 million. Main Street’s middle market debt investments are made in businesses that are generally larger in size than its lower middle market portfolio companies.

Century Park Returns to Automotive Aftermarket

April 8, 2021 by John McNulty

Century Park Capital Partners has acquired CJ Pony Parts, an e-commerce seller of restoration and performance parts to auto enthusiasts.

CJ Pony specializes in parts for classic Mustangs – those manufactured from 1964 to 1973 – and, with more than 65,000 SKUs, has a leading market share of this specialized aftermarket segment. In addition to classic Mustangs, CJ Pony also sells parts for late-model Mustangs, trucks and Jeeps.

CJ Pony also maintains a library of online educational content and it has a YouTube channel with more than 200,000 subscribers that provides Mustang product instruction and installation training videos.

CJ Pony was co-founded by Creed Stammel and Jay Zeigler in 1985 following the purchase a year earlier of a 1968 Mustang as a restoration project. The founders quickly realized that their passion for Mustangs was shared by other enthusiasts and so they launched CJ Pony to sell used and restored parts to meet this demand. Since founding, Mr. Ziegler has continuously operated the business and in 2010 he acquired the equity of Mr. Stammel. Today, CJ Pony is headquartered in Harrisburg, Pennsylvania with an additional warehouse facility in Las Vegas, Nevada.

“I am so happy to have found a partner in Century Park that is aligned with my goals and vision for CJ Pony,” said Mr. Ziegler. “I am looking forward to the opportunities we will create by bringing in a team of experienced leaders to put us in a better position to service the growing needs of our valuable customers.”

“After 20 years of experiencing the development of the company from my initial job in the warehouse, we are so excited to be joining the Century Park family,” said Mike Large, who will continue as president of the company and as an investor. “With the auto aftermarket and e-commerce expertise they are bringing to CJ Pony, we absolutely feel like we have picked the right partner for our next chapter of growth.”

With the closing of this transaction, Matt Jordan, a member of Century Park’s executive council, has joined CJ Pony’s board of directors. Mr. Jordan has 18 years of experience in the auto aftermarket and is currently the CEO of Covercraft Industries, an Oklahoma-based manufacturer of vehicle covers and a portfolio company of Century Park since 2015.

From 2014 to 2019, he was the CEO of the Aftermarket Performance Group (APG), a portfolio company of Heartwood Partners, and from 2003 to 2014 he was the CEO of Eckler’s, an automotive aftermarket parts company owned by Century Park from 2006 to 2012. Earlier this week, Heartwood announced the sale of APG to Ripple Industries, a private investment firm founded by Lance Milken, a former senior partner at Apollo Global Management.

“We couldn’t be happier to be partnering with Jay, Mike and the rest of the talented CJ Pony Parts team in this recapitalization,” said Guy Zaczepinski, the managing partner of Century Park. “CJ Pony Parts is the most respected name in the classic Mustang aftermarket and with our involvement, we hope to make it an even larger player in the broader automotive e-commerce space.”

“Since the early 2000s, CJ Pony has benefited from being a first mover in e-commerce,” said Adam Zacuto, a vice president with Century Park. “Over the last two decades, the company has consistently expanded their footprint by adding parts for new vehicles and developing an industry-leading library of online educational content. As the leader in the classic Mustang category, we believe CJ Pony is ideally positioned to capitalize on continued e-commerce tailwinds going forward.”

Century Park invests from $10 million to $40 million in middle-market companies that have revenues of $20 million to $100 million and EBITDA of $3 million to $15 million. Sectors of interest include chemicals, medical products and services, business services, engineered products, and consumer products. The firm is based near Los Angeles in El Segundo, California.

BMO Sponsor Finance provided the debt financing for the acquisition of CJ Pony by Century Park.

OpenGate Adds to Specialty Tapes Platform

March 5, 2021 by John McNulty

Duraco Specialty Tapes, a portfolio company of OpenGate Capital, has acquired Filmquest Group. OpenGate acquired Duraco from UK-based Essentra in July 2019.

Filmquest coats, converts and metallizes all grades of polyethylene terephthalate (PET) film. Company-owned brand names include Questar and Soft Touch. Filmquest, led by President John Felinski, has just over 50 employees and is headquartered near Chicago in Bolingbrook, Illinois.

Duraco is a business-to-business manufacturer of pressure-sensitive tapes and specialty materials that are used in point-of-purchase displays, appliances, transit packaging, construction, signage, and HVAC applications. Duraco’s application-specific tapes are considered alternatives to mechanical fasteners and traditional glues and offer better adhesion and efficiencies in customer’s assembly operations.

The company, led by CEO David Danelz, has more than 150 employees and is headquartered near Chicago in Forest Park, Illinois with service centers in California, New Jersey, and Texas.

“Filmquest is a testament to OpenGate’s focus on add-on investments as an accelerator for growth,” said Andrew Nikou, OpenGate’s founder and CEO. “The combination of Filmquest’s product offering with Duraco’s strong operating expertise and the seasoned management team will drive continued commercial growth into new markets, and generate greater opportunities in the flexible packaging market.”

In March 2020, Duraco completed the add-on acquisition of Infinity Tapes, a Massachusetts-based manufacturer of double-coated tapes, adhesive transfer tapes, tamper-evident films and tapes, and silicone-coated papers and films that are used in the transit packaging and industrial end markets.

The OpenGate transaction team for the buy of Filmquest included Principal Aaron Figura and Senior Vice President – Operations Vinay Menon. Both OpenGate and Duraco continue to seek further add-on acquisitions in both the specialty tape and film sectors.

OpenGate acquires companies that have revenues from $50 million to $1 billion and specializes in corporate carve-outs and complex situations. The firm was founded in 2005 and is based in Los Angeles with an additional office in Paris.

Mesirow Financial was the financial advisor to Filmquest on this transaction.

CODI’s Arnold Magnetic Adds Ramco

March 4, 2021 by John McNulty

Arnold Magnetic Technologies, a portfolio company of publicly traded Compass Diversified (CODI), has acquired Ramco Electric Motors.

Ramco is a maker of custom stators (the stationary part of an electric motor), rotors, shaft assemblies and subassemblies, and full electric motors that are used in hybrid buses, airplanes, forklifts, industrial fans, building elevators, mining equipment, earthmovers, and medical devices.

Ramco is led by CEO Dan Seger and has just over 120 employees. The company was founded in 1987 by Ray Dunaway and is headquartered 40 miles northwest of Dayton in Greenville, Ohio.

Arnold Magnetic manufactures and distributes magnets, magnetic assemblies, thin and ultra-thin gauge (as thin as two microns) metal strips and foil products that are used in motors, generators, and sensors. Customers of the company, totaling more than 2,000, are active in the aerospace and defense, general industrial, motorsport, oil and gas, medical, and energy sectors.

Arnold Magnetic is headquartered in Rochester, New York and has additional facilities in Ohio, Illinois, Wisconsin and Nebraska, and internationally in the United Kingdom, Switzerland and China.

The history of Arnold Magnetic dates to 1896 when it was founded by electrical engineer Bion Arnold, a close friend of both Charles Steinmetz, the developer of alternating current theory, and famed inventor Thomas Edison. The company was acquired by Allegheny Ludlum in 1946, sold to SPS Technologies in 1946, and acquired by Compass Diversified in 2012 for $129 million. Today, the company is led by CEO Dan Miller.

“Over the past 125 years, Arnold has successfully evolved and adapted its technologies and manufacturing presence to provide world-class quality products and service to our customers,” said Mr. Miller. “By augmenting our technical know-how and engineering capabilities with Ramco’s complementary product portfolio, we will move up the technology ladder and be able to offer more comprehensive, turnkey solutions to our customers. We have a clear line of sight to future growth opportunities through partnering with Ramco’s talented team.”

Compass Diversified (NYSE: CODI) is a publicly-traded investment company that invests between $75 million and $700 million in companies that have EBITDA of at least $10 million. Sectors of interest include niche industrial or branded consumer companies that are headquartered in North America. Compass went public in 2006 and is based in Westport, Connecticut.

“With the acquisition of an industry leader like Ramco, Arnold is continuing to execute its strategy to become a leading technology-based, engineering solutions company,” said Elias Sabo, the chief executive officer of Compass. “Arnold and Ramco are naturally complementary businesses and, together, are more competitive in the marketplace – offering significant opportunity to gain market share and acquire new customers. We look forward to partnering with the Arnold and Ramco teams to integrate their capabilities and realize the full benefits of this transaction, and we remain confident in the future of Arnold’s business.”

With the close of the transaction, Ramco’s operations remain in Greenville, Ohio and it continues to go to market under its brand name as a division of Arnold Magnetic.

Vance Street Forms Spectra, Looks to Consolidate C4ISR Sector

February 26, 2021 by John McNulty

Vance Street Capital has formed Spectra A&D Holdings to acquire and merge three aerospace and defense technology companies.

The three acquired businesses include Las Cruces, New Mexico-based Calculex; and Alpharetta, Georgia-based Argon Corporation and FDS Avionics. Together these companies design and manufacturer avionics and electronics that record, process, route, and display data used in aerospace and defense applications.

Vance Street partnered with Bob McGill, a 35-year veteran of the defense technology industry, on this transaction and he now leads Spectra as its CEO. Earlier in his career, Mr. McGill led multiple divisions of defense and aerospace companies L3 Technologies and General Dynamics. He has also worked with Calculex in a senior executive/consultant role since 2016.

“The formation of Spectra through the combination of Calculex, Argon and FDS Avionics is a transformative event,” said Mr. McGill. “I am excited to partner with Vance Street who brings a strong team, highly relevant investing experience and network in the C4ISR sector, along with significant operational resources.” C4ISR is an acronym that stands for Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance.

The investment in Alpharetta, Georgia-headquartered Spectra was funded through Vance Street Capital III LP and represents the fund’s third platform investment.

“Spectra’s engineering and technical capabilities, combined with its proprietary products, are differentiated in the market,” said Brian Martin, the managing partner at Vance Street. “We plan to leverage our prior aerospace and defense technology experience, network and resources to help Bob grow Spectra organically and through acquisition.”

Los Angeles-based Vance Street makes control investments in companies with enterprise values of $30 million to $250 million and EBITDA of $3 million to $25 million. Sectors of interest include aerospace, defense, industrial, and medical.

“Vance Street is custom-tailored to provide entrepreneurs and executives the resources they need to accelerate growth,” said Nic Janneck, a principal at Vance Street. “With the additional support and capital that we can bring, Spectra will be able to invest in the continued development of advanced avionics technologies to address the challenges of some of the most demanding customers in the world.”

Vedder Price acted as legal advisor to Vance Street. Debt financing for this transaction was provided by Fidus Investment Corporation.

Argon was represented by Janes Capital Partners while Calculex and FDS Avionics were acquired by Vance Street via separate proprietary transactions.

Varsity Closes Fifth Probo Add-On

February 26, 2021 by John McNulty

Probo Medical, a portfolio company of Varsity Healthcare Partners since October 2018, has acquired IMAX Medical.

IMAX specializes in the sale, purchase, inspection, installation/de-installation, and transport of pre-owned medical diagnostic imaging equipment including ultrasound, X-Ray, CT and MRI systems. The company, led by CEO Simon Roussel, was founded by Patrick Roussel in 2012 and is based 240 miles southwest of Paris in Nantes, France.

Probo Medical provides new, used and refurbished ultrasound systems and ultrasound probes. The company uses its global supply chain to procure used ultrasound equipment from more than 250 source points and its internally trained workforce of repair technicians then refurbishes the equipment for resale to more than 500 customers globally.

Probo Medical, led by CEO Michael Asmer, was founded in 2014 and is headquartered north of Indianapolis in Fishers, Indiana with additional US facilities in Tulsa, Oklahoma; Tampa, Florida; and Harrisburg, Pennsylvania.

“This is a significant announcement for Probo as we continue to grow our business on a global scale,” said Mr. Asmer. “France is an important market in the diagnostic medical imaging equipment vertical and we looked hard for a partner that shared our vision for the future.”

The add-on buy of IMAX follows Probo’s buys of UK-based Mount International United Services in January 2021; UK-based Future Medical Equipment and Florida-based Elite Medical Technologies in February 2020; and Pennsylvania-based Trisonics in February 2019.

Varsity Healthcare Partners invests from $10 million to $60 million in companies that are active in the healthcare services sector and have from $5 million to $15 million of EBITDA. Varsity is currently investing out of its third fund, Varsity Healthcare Partners III LP, which closed in August 2019 with $417 million of capital commitments. The firm was founded by David Alpern and Kenton Rosenberry and has offices in Los Angeles and Stamford.

After 37 Years, Yellow Wood Reunites Dr. Scholl’s

February 25, 2021 by John McNulty

Scholl’s Wellness Company, a portfolio company of Yellow Wood Partners, has agreed to acquire the Scholl footcare brand (Scholl), which operates globally outside of the Americas, from consumer-goods company Reckitt Benckiser. The buy of Scholl will reunite the business with the Dr. Scholl’s brand after 37 years of separate ownership.

Dr. Scholl’s is a footwear and orthopedic footcare brand that was founded by Chicago podiatrist William Mathias Scholl in 1906. The original company expanded globally to design and patent over 1,000 footcare products and was acquired by Schering-Plough in 1979. Schering-Plough was acquired by Merck in 2009, and in 2014 Merck sold its consumer care business, which included Dr. Scholl’s, to Bayer. In November 2019, Yellow Wood formed Scholl’s Wellness Company to acquire Dr. Scholl’s from Bayer for $585 million.

Since its formation, Scholl’s Wellness has been actively expanding its e-commerce capabilities, developing new products, and strengthening its senior management team. Today, Scholl’s Wellness, which had sales of $234 million last year, sells insoles, inserts and a variety of other footcare and treatment products.

“Our experience of successfully executing corporate carve-outs has helped us gain a deep understanding of the many complexities that accompany the separation of an operating subsidiary from a large global parent company,” said Tad Yanagi, a partner at Yellow Wood. “Our previous experience with other global multinational CPG companies enabled us to work directly with Reckitt Benckiser to create this opportunity.”

The Scholl brand became separated in 1984 when Schering-Plough sold the non-North American operations of the business to European Home Products which later, after a series of mergers, became SSL International. Reckitt Benckiser acquired SSL in 2010.

With the close of this transaction, expected in the third quarter of 2021, the once-again combined business will have annual sales of more than $700 million.

“This transaction provides us with a unique opportunity to create a global brand as an undisputed leader in the footcare category. We are excited to reunite these two companies to continue the legacy and heritage of the century-old Dr. Scholl’s brand,” said Dana Schmaltz, a partner at Yellow Wood. “The combined company will have the global resources to continue to develop innovative wellness products with a single vision focused on providing the best footcare products for consumers around the world.”

Yellow Wood invests in consumer brands and companies that operate in the mass, drug, food, specialty, value, club and e-commerce channels and have revenues between $30 million and $200 million. In July 2017, the firm completed fundraising for Yellow Wood Capital Partners II LP at an oversubscribed $370 million of committed capital. Yellow Wood was founded in 2011 and is based in Boston.

Reckitt Benckiser (OTC: RBGPF) is a multinational consumer goods company with operations in the hygiene, health and nutrition sectors. Company-owned brands include Clearasil, Lysol, Air Wick, Calgon, Woolite and Vanish among many others. Reckitt Benckiser was founded in 1823 and is headquartered near London in Slough, United Kingdom

Fried Frank provided legal services to Yellow Wood on this transaction. The Fried Frank team was led by corporate partner Dan Oates and included corporate partner Neil Caddy and corporate associates Angela Becker and Hannah Luqmani.

Aterian’s Bright Buys Bocchi

February 11, 2021 by John McNulty

Bright International, a portfolio company of Aterian Investment Partners, has acquired Bocchi Laboratories from its family ownership. Aterian acquired Bright International in August 2019.

Bocchi Laboratories is a high volume contract manufacturer of liquid personal care products including shampoos, conditioners, lotions, creams, gels, and fragrances.

Headquartered near Los Angeles in Santa Clarita, California, the company has 225,000 sq. ft. of facilities including an 86,000 sq. ft. production plant and a 96,000 sq. ft. warehouse facility. In New Albany, Ohio, located northeast of Columbus, the company has nearly 200,000 sq. ft. of research and development, production and warehouse facilities.

Bocchi was founded in 1989 by Bob Bocchi and was acquired by Bain Private Equity in 1996. Bain sold the business in 2003 to ClearLight Partners and in 2008 the company was reacquired by Mr. Bocchi. Today the business is led by CEO Joe Pender.

“The partnership between Bocchi and Bright is the ideal outcome for our employees and customers as the combination provides significant resources and capabilities as we continue our growth strategy and our commitment to our customer base through execution and innovation,” said Mr. Pender.

Bright manufactures hair bleach products, shaving depilatory powders, developers and hair colors that are used by consumer product brands sold into the professional salon and retail markets. The company’s services include research and development, formulation, blending, packaging, filling, and kitting. Bright was founded in 1987 by Anthony Bibars and has a manufacturing facility and headquarters near Phoenix in Coolidge, Arizona.

According to Aterian, the combination of Bright with Bocchi creates one of the most diversified full-service beauty and personal care platforms in North America.

“The Bocchi and Bright platform is highly strategic,” said Christopher Thomas, a co-founder and partner at Aterian. “Although each company is a leading North American manufacturer in its respective categories, the combination provides each business and their customer base access to new capabilities, technology, production equipment, innovation and excellence in execution to further align the customers and organization.”

Aterian invests up to $50 million in small-to-middle market businesses with $25 million to $500 million in revenues that are underperforming, turnarounds or otherwise unique situations. Aterian held a final closing of Aterian Investment Partners III LP with $350 million of committed capital in July 2018. Aterian’s earlier fund closed in December 2013 with $257 million of capital commitments.

“We are very excited for the direction of the organization,” added Josh Ciampa, a principal at Aterian. “This is an example of how we continue to grow and invest behind two family-owned and operated organizations, ultimately creating a best-in-class manufacturing and innovation platform for the customer experience.”

Lincoln International was the financial advisor to Bocchi Laboratories.

PMC Carves Out UniversalPegasus

February 9, 2021 by John McNulty

PMC Capital Partners has acquired UniversalPegasus International (UPI), a provider of engineering and construction management services, from publicly traded Huntington Ingalls Industries.

UPI was formed in February 2008 by KRG Capital Partners through the acquisition and merger of Universal Ensco and Pegasus International. Huntington Ingalls acquired UPI from KRG in June 2014.

Today, UPI provides engineering, project management, survey, and inspection services to the energy industry including onshore and offshore pipelines and facilities. UPI, led by CEO Tom Davison, is headquartered in Houston with an additional office in Calgary and currently has more than 600 employees.

According to Engineering News-Record, UPI is one of the top 10 engineering design companies in the petroleum sector and the 59^th largest overall.

“We are extremely excited to acquire UniversalPegasus and its amazing team of 600 professionals,” said Chris Aye, a managing partner of PMC Capital. “Spearheaded by an impressive business leader in Tom Davison, the UPI team maintained record-level engineering design revenues during an economically crippling COVID-19 pandemic while building a backlog of business that will continue to support future success. Acquiring UPI coincides with PMC Capital’s vision to acquire and support an elite technical staff of engineers who deliver first-class mission-critical business services to blue-chip customers.”

PMC Capital invests from $10 million to $100 million in companies with revenues of more than $20 million and EBITDA of more than $2 million. Sectors of interest include business services, niche manufacturing, consumer, health care, and telecommunications, media and technology. The firm is based near Los Angeles in Sun Valley, California.

“UPI’s decades of record success delivering engineering, logistical, and construction management solutions captivated PMC Capital. Not only will PMC Capital support UPI in maintaining a high level of service for its clients — we look forward to building and exceeding UPI’s past accomplishments. We’re excited to partner with Tom and his team as we aggressively embark on a multifaceted growth strategy,” added Mr. Aye.

Newport News-headquartered Huntington Ingalls (NYSE: HII) designs, builds, overhauls, and repairs military ships. The company’s technical solutions division provides professional services to government and commercial customers in the areas of fleet maintenance and modernization, rapid prototyping, nuclear engineering and fabrication, and software development.

“We are pleased to have reached this agreement,” said Andy Green, HII’s executive vice president and president of the technical solutions division. “PMC Capital is a great new home for UniversalPegasus, its world-class people and services. It will enable UPI to continue to flourish, ensuring the business remains at the forefront of innovation and customer service in the future.”

PMC Capital is part of PMC Global, a multinational conglomerate founded in 1974 by Philip Kamins (PMC stands for Plastics Management Corp.) The firm operates businesses in the chemical, liquefied natural gas, pharmaceutical, plastics, packaging, construction, financial, machinery and fabrication, and health and beauty industries.

“With PMC Capital behind us, UPI will continue to differentiate itself and outperform the competition as one of the few remaining independent oil and gas engineering companies. We expect to emerge from the pandemic in a strong financial position poised for double-digit growth,” concluded Mr. Davison.

Ernst & Young Capital Advisors provided financial services to Huntington Ingalls Industries on this transaction.

AEI Forms New UAV Platform

January 29, 2021 by John McNulty

AE Industrial Partners (AEI) has acquired UAV Factory as a new platform investment in the unmanned aerial vehicle (UAV) and intelligence, surveillance, reconnaissance (ISR) technology markets.

UAV Factory designs and manufactures fixed-wing UAVs, UAV subsystems, electro-optical and infra-red ISR camera payloads, and accessories for the unmanned and manned aircraft industry. UAV Factory was founded in 2009 and is based in Riga, Latvia and has a US location in Bend, Oregon.

“The UAV market is growing exponentially, and with the financial and operational support of AEI, UAV Factory is poised for increased growth and market share,” said Konstantin Popiks, a co-founder of UAV Factory who will remain with the company in a senior leadership role in partnership with AEI.

“UAV Factory is at the forefront of the burgeoning global UAV market,” said Kirk Konert, a partner at AEI. “Its first-mover advantage and unique vertical integration of its proprietary technology solutions well-positions the company to expand its share of this high growth market.”

Boca Raton-based AEI invests in the aerospace and defense, power generation, and specialty industrial sectors with a specific focus on technical manufacturing; distribution and supply chain management; maintenance, repair, and overhaul; and industrial service-based businesses. Typical company targets will have from $50 million to $500 million of revenue. In July 2018, the firm held a final hard-cap closing of its second private equity fund, AE Industrial Partners Fund II LP, with $1.36 billion in commitments.

“UAV Factory’s engineering and technical capabilities, combined with its proven and growing set of technology solutions, are truly differentiated in the market,” said Jeffrey Hart, a principal at AEI. “We are excited to partner with the company’s talented team and are confident that our collective strategic vision for an unmanned technology platform will yield powerful results in this fast-growing market.”

Houlihan Lokey was the financial advisor to UAV Factory and PricewaterhouseCoopers advised AEI.

Varsity Closes 4th Probo Add-On

January 27, 2021 by John McNulty

Probo Medical, a portfolio company of Varsity Healthcare Partners since October 2018, has acquired Mount International United Services (MIUS).

MIUS is a provider of third-party service, repairs and maintenance for medical imaging equipment including Ultrasound, CT, MRI, and X-ray. The company also buys, sells and rents medical imaging equipment. Customers of MIUS include more than 250 National Health Service (NHS) hospitals (the NHS is the umbrella term for the publicly-funded healthcare systems of the United Kingdom).

MIUS was founded in 1997 by Paul Mount and is headquartered 100 miles west of London in Gloucester, United Kingdom.

“We are thrilled to be joining with Probo,” said Mr. Mount. “The combination of MIUS with the Probo team in both the US and UK positions our company as one of the leading independent service and sales organizations for medical imaging equipment across Europe.”

“The addition of MIUS to the Probo family is a tremendously exciting development for our company,” said Mr. Asmer. “Looking forward into a post-COVID world, we see a significant opportunity to bring forward a comprehensive set of diagnostic imaging equipment solutions to the European market. By combining MIUS with our existing operations in the UK, Probo is well-positioned as a global leader for sales, service, rentals and repair of medical imaging equipment.”

In February 2020, Probo Medical acquired Elite Medical Technologies and Future Medical Equipment. Elite Medical is a US-based reseller of used digital medical imaging equipment, including CT, MRI and PET/CT across all major OEM manufacturers. Future Medical is a UK-based provider of used medical equipment across a wide range of imaging modalities and equipment types. In February 2019, Probo Medical acquired Trisonics, a Pennsylvania-based provider of ultrasound service, support, systems, parts, transducers/probes and service training.

SFEF Acquires Beauty Products Maker

January 26, 2021 by John McNulty

San Francisco Equity Partners (SFEP) has acquired SV Labs, a contract manufacturer of beauty and personal care products.

SV Labs’ services include research and development, formulation, manufacturing, filling, labeling, packaging and fulfillment. The company’s products include effervescent products for multiple end markets, including shower tablets and bath bombs; and products for other market categories including bath salts, skincare, body care and cannabidiol (CBD) topicals.

SV Labs’ customers include multi-national consumer packaged goods (CPG) companies, direct-to-consumer brands and national retailers. SV Labs, led by President Jeff Slaboden, was founded in 1973 and is headquartered south of San Jose in Watsonville, California.

“SFEP is an ideal partner for SV Labs, given the firm’s successful track record partnering with natural beauty and personal care brands, coupled with its experience building specialty manufacturing businesses in high-growth consumer categories,” said Mr. Slaboden.

“We see great potential for nimble and innovative manufacturers like SV Labs to serve the unique needs of high-growth natural beauty and personal care brands,” said Scott Potter, a managing partner at SFEP. “SV Labs has a long and rich heritage and is well-positioned to continue to scale as a manufacturing partner of choice to leading natural brands. We look forward to supporting the company with operational and strategic support during its next phase of growth.”

San Francisco Equity Partners makes control and minority investments of $5 million to $25 million in consumer companies that have revenue of up to $100 million and EBITDA of up to $10 million. Consumer sectors of specific interest include apparel; beauty and personal care; food and beverage; health and wellness; household products; outdoor and recreation; pet care; and specialty retail.

BBH Capital Invests In American Spraytech

January 20, 2021 by John McNulty

BBH Capital Partners (BBHCP) has made an investment in aerosol products maker American Spraytech. BBH’s investment was made in partnership with the company’s existing management team and founding shareholders.

American Spraytech (AST) is a formulator and contract filler of aerosol products. The company’s products include air fresheners, shampoos, hair sprays, sunblock sprays, deodorant body sprays, contact lens saline, lens & glass cleaners, and many other personal care, cosmetic and over-the-counter medical products. AST’s customers range from boutique salons and personal care brands to Fortune 500 consumer goods companies.

AST operates 5 through-the-valve (TTV) aerosol filling lines and 1 bag-on-valve (BOV) line at its 200,000 square foot campus which includes six buildings and twelve propellant tanks. The company, led by CEO Allen Lalwani, was founded in 2003 and is headquartered 45 miles west of New York City in Branchburg, New Jersey.

“The AST team is thrilled to join forces with BBH for our next phase of growth,” said Mr. Lalwani. “We could not have found a more ideal partner than the oldest and most reputed private bank in the United States. Their strategic and financial support will allow us to pursue several attractive organic and inorganic growth opportunities that will enhance our product offering and help us better serve our customers.”

“Allen and his management team are proven executives with a long track record of driving growth, and we are looking forward to our partnership with the entire AST team. We were attracted to AST due to its reputation for innovation and formulation capabilities within the outsourced aerosol manufacturing market,” said Brad Langer, a managing director of BBH and a co-manager of BBHCP. “In addition to AST’s in-house research and innovation capabilities and full suite of manufacturing solutions, we believe the company’s focus on the personal care, cosmetic and over-the-counter medical end markets is quite attractive due to the stability of these categories.”

Boston-based BBH Capital Partners (BBHCP) makes control and non-control investments of $40 million to $150 million in North American-based companies with enterprise valuations between $10 million to $500 million. Sectors of interest include healthcare, technology, media and telecommunications, and business products and services.

Audax Closes Sale of Gabriel at 11x

January 20, 2021 by John McNulty

Audax Private Equity has closed its December-announced sale of Gabriel Performance Products to publicly traded Huntsman Corporation for $250 million in cash.

Akron-headquartered Gabriel is a maker of specialty additives and epoxy curing agents used in the coatings, adhesives, sealants and composite end-markets. Gabriel, led by CEO Seth Tomasch, operates three manufacturing facilities in Ohio, Pennsylvania and South Carolina.

“Audax has been a valuable partner in helping us grow Gabriel into a leading specialty chemicals manufacturer that delivers state-of-the-art, scalable, ready-made, and customized chemical solutions with exceptional customer service,” said Mr. Tomasch.

Audax acquired Gabriel in October 2014 and completed six add-on acquisitions during its ownership term. In 2019, Gabriel had revenues of $106 million with an adjusted EBITDA of $23 million. This yields an 11x EBITDA valuation multiple and, according to Huntsman, an 8x valuation multiple of pro forma adjusted EBITDA including expected synergies.

“We are proud to have partnered with Seth and the Gabriel team in creating a leading platform serving the coatings, adhesives, and composites markets,” said Don Bramley, a managing director at Audax. “The company expanded its proprietary products organically and through acquisitions while investing in its direct commercial team, research & development capabilities, manufacturing facilities, and key talent to support and sustain continued growth. We wish continued success for Seth and the entire Gabriel organization as they embark on their next chapter of growth.”

Huntsman has been actively pursuing transactions in 2020. In May, Huntsman acquired CVC Thermoset Specialties, a maker of specialty additives and epoxy curing agents with two manufacturing facilities in Ohio and New Jersey, for $300 million in cash from Emerald Performance Materials, a portfolio company of American Securities. CVC had revenues of $115 million in 2019 and the $300 million purchase price was equal to an adjusted EBITDA multiple of 10x, or 7x if expected operating synergies are included.

Huntsman (NYSE: HUN) is a manufacturer and marketer of a range of chemical products with 2019 revenues of approximately $7 billion. The company has more than 70 manufacturing, R&D and operations facilities in 30 countries and employs more than 9,000. Huntsman is headquartered north of Houston in The Woodlands, Texas and has executive offices in Salt Lake City, Utah.

“The acquisition of Gabriel broadens the offering in our specialty portfolio and is complementary to our recent acquisition of CVC,” said Scott Wright, the president of Huntsman’s advanced materials division. “Gabriel makes highly specialized toughening and curing agents and other additives used in a wide range of composite, adhesive and coatings applications. We expect that the Gabriel business will strengthen our North America footprint and provide significant commercial synergies.”

Audax invests in middle-market companies that have from $8 million to $50 million in EBITDA and enterprise values of $50 million to $400 million. Sectors of interest include business and consumer services; energy; healthcare; technology, media and telecom; and industrials including chemicals, infrastructure, and building materials. Audax has offices in Boston, New York, and San Francisco

Grace Matthews was the financial advisor to Gabriel on this transaction.

Jon-Don Switches Sponsors

January 15, 2021 by John McNulty

Incline Equity Partners has acquired Jon-Don, a distributor of commercial and industrial cleaning supplies and equipment, from Trivest Partners.

Jon-Don’s products are used by its more than 80,000 customers for concrete surface preparation and polishing, water and fire restoration, carpet cleaning, janitorial sanitation and safety.

The company maintains more than 15,000 SKU’s of supplies and equipment including, among many others, carpet, upholstery and concrete cleaners; fans and dehumidifiers; portable heaters; flood and water extractors; vacuums, brushes and brooms; gloves and hand tools; hoses and accessories; janitor carts; sponges and towels; and buckets and containers. Jon-Don also provides value-added services including repair, product consultation, and equipment rental.

Jon-Don, led by CEO Cesar Lanuza, was founded in 1978 by John and Nick Paolella, and is headquartered near Chicago in Roselle, Illinois with 16 stores and service locations nationwide.

“We are excited to partner with Incline for our next phase of growth,” said Mr. Lanuza. “Leveraging Incline’s experience and expertise allows us to execute on strategic initiatives that will further strengthen our service offering and market position, including expanding into adjacent end markets and pursuing strategic acquisitions.”

“Jon-Don has an impressive track record of long-term, profitable growth through many economic environments,” said John Morley, a partner at Incline. “Additionally, customers rely on their deep technical expertise and education resources to meet their needs. We are excited to partner with the management team to accelerate growth through acquisitions and enhanced go-to-market strategies.”

Pittsburgh-based Incline was formed in 2011 and is led by its senior partners, Jack Glover, Justin Bertram, and Leon Rubinov. The firm invests in a range of sectors in US and Canadian companies that typically have enterprise values of $25 million to $450 million. In January 2020, Incline closed its fifth fund, Incline Equity Partners V LP, with nearly $1.2 billion of capital.

Trivest acquired a non-control equity interest in Jon-Don in October 2017 through its $225 million Trivest Growth Investment Fund which closed in 2016.

Trivest was founded in 1981 and has completed more than 300 transactions totaling over $7 billion in value. Sectors of interest include niche manufacturing, distribution, business and healthcare services, and consumer industries. The firm is headquartered in Coral Gables, Florida.

Audax Private Debt provided mezzanine financing to support Incline’s buy of Jon-Don. The lender is part of Audax Group and has invested over $21 billion in more than 830 companies backed by over 230 private equity sponsors. Steve Ruby, a managing director at Audax Private Debt, led the Jon-Don transaction.

BlackArch Partners was the financial advisor to Jon-Don and Trivest on this transaction.