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SBJ Buys The Perfect Purée

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Spanos Barber Jesse & Co. (SBJ) has made an investment in The Perfect Purée, a maker of fruit and vegetable purées.

The Perfect Purée (TPP) was founded by Tracy Hayward in 1988 and is led by senior executives Medhane Kidane, Michele Lex, and Mark Smith. These managers have retained their ownership interest in the company and will remain in their current roles in partnership with SBJ.

“I started this company 35 years ago delivering purées from the back of my station wagon,” said Ms. Hayward. “The company has been built by a continuously creative team of professionals and partners who have turned The Perfect Purée into a specialty foods and ingredients company that is a darling of chefs and mixologists. Today, I am pleased to have selected SBJ as our partner because I believe they have a unique appreciation for what makes The Perfect Purée special.”

TPP’s portfolio of more than 40 frozen fruit and vegetable purées and concentrates are sold primarily into the foodservice sector and are used by chefs, bartenders and other culinary professionals in sauces, dressings, desserts, and cocktails. The company’s products contain no artificial additives, preservatives or colorings and its flavors range from raspberry, strawberry and mango to tropical flavors like lychee, passion fruit, and pink guava.

“We are honored that Tracy selected us to continue to grow the impressive brand that she created,” said Ben Landis, a managing director at SBJ. “We are pleased to partner with Tracy, Med, Michele, Mark, and the rest of The Perfect Purée team to continue the company’s long history of success and to grow the brand.”

“During our diligence process, we spoke with many culinary and foodservice professionals who all complimented the quality of the products as well as the unique and consistent flavor profiles developed by The Perfect Purée.  This is a real testament to the strength of the team and the brand,” added Patrick Muller, a vice president at SBJ.

SBJ invests from $10 million to $50 million in consumer, business services and healthcare services companies that have up to $100 million in revenue and EBITDA from $3 million to $15 million.

In October 2015, SBJ held a final closing on its debut fund, SBJ Fund LP, with total capital commitments of $204 million, exceeding its original $150 million target. The firm was founded by Gus Spanos, Tom Barber and Bill Jesse and has offices in near San Francisco in Walnut Creek, California and in Dallas, Texas.

© 2020 Private Equity Professional | October 27, 2020

Susquehanna Closes Second October Franchise Deal

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Susquehanna Private Capital (SPC) has made an investment in Authority Franchise Systems (AFS), a franchisor of pest control services to residential and commercial customers.

AFS does business under the Mosquito Authority and Pest Authority brands and has more than 150 franchises in 38 US states, Puerto Rico, and Canada. AFS, headquartered northwest of Charlotte in Hickory, North Carolina, was founded in 2002 by Joey Osborne and is led by CEO Chris Buitron.

“With SPC’s support, we look forward to entering the next phase of company growth by expanding our pest control services and client reach,” said Mr. Buitron.

“We are pleased to partner with the Mosquito Authority team as we set out to build a multi-branded franchisor within the niche, growing and recession-resistant pest control industry,” said Kyle Squillario, co-head of SPC. “We look forward to leveraging our resources and combining them with Chris’ industry insight and the deep experience of his management team as we seek to grow Mosquito Authority by partnering with other founder‐owners of outdoor home service brands.”

Susquehanna Private Capital (SPC) makes control investments of $10 million to $50 million in companies that have EBITDA from $3 million to $15 million. Sectors of interest include business, consumer and franchise services, healthcare services, and industrial technology.

“We are proud to partner with the Mosquito Authority team and excited to build upon the company’s strong reputation within the franchising space,” said John McGinley, a vice president at SPC.

The buy of AFS follows SPC’s formation of Quality Collision Group earlier this month to acquire Brandywine Coach Works, a Chadds Ford, Pennsylvania-based provider of OEM-certified collision repair services with 4 Pennsylvania locations and 90 employees.

SPC was founded in 2017 by Susquehanna International Group (SIG), a privately held investment, trading and technology firm with approximately 2,000 employees. SIG is headquartered in the Philadelphia suburb of Bala Cynwyd with additional offices in New York, Chicago, San Francisco, Philadelphia, Boston, Sydney, Dublin, Shanghai, Beijing, and Hong Kong.

Private Equity Professional | October 14, 2020

Snow Phipps Adds Two to Brook & Whittle

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Brook & Whittle, a portfolio company of Snow Phipps, has agreed to acquire sister companies Innovative Labeling Solutions and Wizard Labels.

Brook & Whittle is a Connecticut-headquartered manufacturer of pressure-sensitive labels, shrink labels and medical packaging that is used in the non-carbonated beverage, food, and personal care industries. The company’s printing capabilities include UV flexographic, rotogravure and digital.

Brook & Whittle operates seven production facilities in Connecticut (2), New York, Pennsylvania, Missouri, Tennessee, and California.

Innovative Labeling Solutions (ILS) and Wizard Labels are similar to Brook & Whittle and manufacture pressure sensitive and shrink sleeve labels used in the craft beverage, nutraceuticals, food, household, and personal care segments. Ohio-headquartered ILS was founded by Jay Dollries and Steve Wolf in 1996, and Colorado-headquartered Wizard was founded by Mr. Dollries and Steve Smith in 2013.

“We are thrilled to acquire leading providers of digital and custom online prime label solutions in North America. The founders of ILS and Wizard Labels have built remarkable companies that are exceptionally well-positioned for growth and we are incredibly excited for them to join Brook & Whittle as significant shareholders,” said Mark Pollard, CEO of Brook & Whittle.

Mr. Dollries, who is the current CEO of ILS, will help transition the ILS platform to Brook & Whittle and will become an advisor, shareholder, and board member of Brook & Whittle. “Jay has driven remarkable growth at ILS over its long history, and we are extremely excited for him to help us craft our future digital strategy,” added Mr. Pollard.

“There is a significant benefit in the application of the ILS and Wizard Labels business model across Brook & Whittle,” said Don Sturdivant, an operating partner at Snow Phipps. “Brook & Whittle, ILS, and Wizard Labels all focus on similar growth-oriented end markets and product categories, namely pressure sensitive and shrink sleeve. We are eager to combine our efforts to collectively better serve our growing customer base.”

The buys of ILS and Wizard are the fourth and fifth add-on transactions by Brook & Whittle since being acquired by Snow Phipps in October 2017.  The three earlier buys were Missouri-based Prime Package & Label in November 2018; a shrink sleeve facility in Pennsylvania in May 2020; and California-based Label Impressions in June 2020.

“We are pleased to have the opportunity to partner with ILS and Wizard Labels and are very enthusiastic about our future together,” said Gerald Sheehan, a partner at Snow Phipps. “These acquisitions will further enhance Brook & Whittle’s position as a leading provider of high-end labels across North America.”

New York City-based Snow Phipps makes control investments in companies primarily located in North America with enterprise values ranging from $100 million to $500 million that require equity investments ranging from $50 million to $150 million. Sectors of interest include industrials, services, and consumer. The firm was co-founded by Ian Snow and Ogden Phipps in April 2005.

Cincinnati-based and privately-held RKCA Investment Banking was the financial advisor to ILS and Wizard Labels. RKCA specializes in middle-market transactions and has boutique practice areas in healthcare staffing and tech-enabled business services.

The closing of the acquisitions of ILS and Wizard are expected by mid-November.

Private Equity Professional | October 9, 2020

Cotton Creek Capital Captures ConeCraft

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Cotton Creek Capital has acquired ConeCraft, a maker of equipment used in the pharmaceutical and biopharmaceutical industries.

ConeCraft specializes in manufacturing stainless steel bins, mixers, bioreactors, and tube management systems that are used for research and production in the biopharmaceutical market. The company sells its patented products to many of the largest biopharma companies in the world.

ConeCraft, founded in 2003 by CEO Jim Austin, has more than 120 employees and a 70,000 sq. ft. facility and headquarters in Fort Worth, Texas.

“ConeCraft was founded with the purpose of providing our customers with technically superior solutions, produced with tight manufacturing tolerances,” said Mr. Austin. “Cotton Creek’s relevant experience and operating approach were what our management team was seeking as we enter ConeCraft’s next phase of growth.”

“Jim, Sarah Schultz, and the rest of the management team at ConeCraft have built a differentiated business by providing highly-engineered solutions to end-users demanding stringent technical requirements,” said Antonio DiGesualdo, a managing partner of Cotton Creek. “In a market experiencing substantial organic growth, that has been further accelerated by the current pandemic, it is an ideal moment for our partnership with ConeCraft. We are excited to be a part of the ConeCraft team and execute on the substantial growth and expansion opportunities for the company.”

Cotton Creek’s investment in ConeCraft was made through its third fund, Cotton Creek Capital Partners III LP, which closed in August 2019 with $215 million in capital.

Austin-based Cotton Creek invests from $10 million to $40 million in companies with EBITDA between $5 million and $15 million. Sectors of interest include manufacturing, value-added distribution, industrial, specialty chemical, building products, food and beverage, and business services.

Private Equity Professional | October 6, 2020

SK Carves-Out Specialty Polymers Biz of Baker Hughes

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SK Capital has formed NuCera Solutions to acquire the specialty polymers business of Baker Hughes.

NuCera produces specialty olefin polymers and high melting point polyethylene waxes that are used in adhesives, candles, coatings, imaging, personal care, and plastics applications. The business began operations in 1934 as Bareco Oil Company and has manufacturing operations in Barnsdall, Oklahoma.

With the closing of the transaction, SK has named Steve McKeown as the company’s chief executive officer and Shawn Ham as its chief financial officer. Mr. McKeown was most recently the president and chief operating officer of Galata Chemicals, a Connecticut-based maker of thermoplastics and polyolefin additives which was owned by Aterian Investment Partners from 2010 to 2014. Mr. Ham was most recently the chief accounting officer and controller at Texas-based KMG Chemicals.

“We are very excited to have Steve and Shawn joining the NuCera team,” said Jonathan Borell, a managing director of SK Capital. “Their combination of chemicals industry experience and leadership skills will help transition NuCera into the next phase of its growth.”

New York City-based SK Capital invests in the specialty materials, chemicals and pharmaceutical sectors and typically invests equity of $100 million to $200 million in each portfolio company. In February 2019, the firm held a final closing of SK Capital Partners Fund V LP with total committed capital of $2.1 billion.

“We believe NuCera’s leading specialized polymerization technologies combined with a strong existing base of talent and new leadership team will transform the company into an independent leader of global polymer solutions,” said Mario Toukan, a managing director of SK Capital.

Debt financing for this transaction was provided by KeyBanc Capital Markets and Evercore was the financial advisor to Baker Hughes.

Private Equity Professional | October 2, 2020

Windjammer Exits AI at 24x

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Windjammer Capital has agreed to sell Advanced Instruments to Patricia Industries, a subsidiary of industrial holding company Investor AB, at an enterprise value of $780 million. Windjammer acquired Advanced Instruments from its founding family in October 2016.

Advanced Instruments (AI) manufactures test and measurement instruments and related consumables that are used in scientific and analytical applications in the clinical health, biotechnology, and food and beverage industries. The company, led by CEO Byron Selman was founded in 1955 and is headquartered near Boston in Norwood, Massachusetts.

For the 12-month period ending June 30, 2020, AI’s sales totaled $72 million with an adjusted EBITDA of just over $32 million (a 45% EBITDA margin and a 24x adjusted EBITDA valuation multiple). According to Patricia Industries, while COVID-19 impacted both AI’s sales and profitability during the second quarter, the company has shown good resilience. Over the past 15 years, organic sales growth has averaged approximately 10 percent annually, with strong profitability.

“Our success in recruiting a world-class executive leadership team, setting the strategic direction and investing to support the execution of that strategy were all critical factors in driving significant value creation for our investors over the past four years,” said Craig Majernik, a managing director at Windjammer. “AI is a great example of where Windjammer can have success in the healthcare sector, in this case targeting the intersection of life science tools, diagnostics and biopharma enabling products and services.”

AI’s portfolio of products include freezing-point depression (FPD) osmometers (freezing-point depression is the decrease of the freezing point of a solution after the addition of another solution – e.g., salt in water, alcohol in water), jar systems for bacterial cultivation, automated cell counters, cryoscopes (used to measure freezing points), and pasteurization test systems.

According to AI, it is the world leader in using FPD technology for measuring the osmolality of solutions which is used in many biotech applications, including the rapidly growing fields of bioprocessing, cell, and gene therapies.

“Advanced Instruments fulfills many of the criteria we seek in new investments,” said Johan Forssell, the CEO of Patricia. “The company is the clear global leader in a highly attractive market segment with durable long-term growth prospects. Its products are critical for its customers yet represent a fraction of their overall costs. Advanced Instruments has a compelling financial profile with high growth and profitability, strong cash flow generation, and a large share of recurring revenue.”

Investor AB (NASDAQ: INVE B) is a Swedish investment firm controlled by the Wallenberg family which founded Stockholm’s Enskilda Bank in 1856. In 1916, Investor AB was created to manage and own the industrial holdings of the bank. Today, Investor AB is one of Northern Europe’s largest industrial holding companies. The company’s investments include ABB, AstraZeneca, Atlas Copco, Electrolux, Epiroc, Ericsson, Husqvarna, NASDAQ, Saab, private equity firm EQT, and Patricia Industries. Investor AB has more than 90 employees and offices in Stockholm, New York, and Palo Alto.

At closing, AI becomes Patricia’s fourth North American subsidiary, in addition to BraunAbility, an Indiana-based manufacturer of wheelchair accessible vans and wheelchair lifts, acquired in September 2015; Laborie, a Canadian-based maker of devices and consumables used to diagnose and treat pelvic floor and gastrointestinal disorders, acquired in August 2016; and Sarnova, an Ohio-based distributor of healthcare products and services to the emergency medical and acute care sectors. Patricia will fund the acquisition of AI with $620 million of equity and $160 million of new debt.

“Advanced Instruments has a market-leading technology and a track record of successful innovation. The company has a resilient business model, strong long-term organic growth potential and multiple ways to expand through acquisitions in both existing and new markets,” said Noah Walley, the co-head of Patricia. “We look forward to working with the management team and our strong industrial network to further develop the business.”

Windjammer invests equity and subordinated debt as a control investor in middle-market businesses located in the US or Canada that have EBITDA from $8 million to $50 million. Sectors of interest include niche manufacturing, business services and value-added distribution. The firm’s investment size ranges from $50 million to $200 million per transaction.  Windjammer was founded in 1990 and is based in Waltham, Massachusetts and Newport Beach, California.

Morgan Stanley was the financial advisor to Advanced Instruments on this transaction which is expected to close in the fourth quarter of 2020.

Private Equity Professional | September 30, 2020