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Littlejohn Carves Out Kaman Distribution

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Publicly traded Kaman Corporation has agreed to sell its distribution (Kaman Distribution) segment to Littlejohn for $700 million in cash.

Kaman Distribution is a distributor of more than six million items including electro-mechanical, bearings, power transmission, motion control and electrical and fluid power components, as well as automation and MRO supplies, to customers in a wide range of industries.

The business also provides engineering, design and support for automation, electrical, hydraulic and pneumatic systems; belting and rubber fabrication; hose assemblies; and repair and fluid analysis services. Kaman Distribution has 2,200 employees and 220 locations across the US and Puerto Rico.

In 2018, Kaman Distribution had total revenues of $1.1 billion and $66.3 million of adjusted EBITDA. For the twelve months ending March 2019, adjusted EBITDA was $67.6 million resulting in a valuation multiple for this transaction of 10.4x.

“Kaman Distribution builds upon Littlejohn’s deep expertise investing in the distribution and industrial sectors,” said Tony Miranda, a managing director of Littlejohn. “We have long admired Kaman Distribution, a market-leading provider of products and solutions to its customers as well as a trusted partner to its suppliers and look forward to working closely with management to further invest in the business and drive growth, both organically and via acquisition.”

In addition to its distribution business, Kaman (NYSE: KAMN) also produces aircraft bearings, components, and composite aerostructures for commercial, military and general aviation fixed and rotary wing aircraft; arming systems for missiles and bombs; manufactures the K-MAX manned and unmanned helicopters; and provides maintenance and modifications services to its line of Super Seasprite maritime helicopters. Kaman’s aerospace business operates out of fourteen facilities with almost 3,000 employees and is expected to have revenues of $730 million in 2019. Kaman was founded in 1945 by Charles Kaman and is headquartered in Bloomfield, CT (www.kaman.com).

Littlejohn makes control and non-control investments in middle-market companies that are undergoing a fundamental change in capital structure, strategy, operations or growth.  The firm invests from $50 million to $150 million of equity in middle-market companies that have annual revenues of $100 million to $800 million.  Littlejohn invests across a range of industries and acquires manufacturers, distributors, and service providers. The firm is headquartered in Greenwich, CT (www.littlejohnllc.com).

Kaman expects to receive approximately $600 million in net proceeds from this transaction and will use the cash to pay down $100 million of debt, return capital to shareholders through dividends and share repurchases, and to fund acquisitions in the engineered product end markets.

“For Kaman this transaction represents an important milestone in our portfolio transformation and the culmination of a thorough strategic review undertaken by our board of directors,” said Neal Keating, chairman, president and CEO of Kaman. “Our strengthened balance sheet will better position the company to invest in and build our higher margin, higher growth aerospace and engineered products businesses to enhance shareholder value.”

Debt financing commitments in support of the acquisition have been provided by Jefferies, Antares Capital, and Bank of Montreal.

Robert W. Baird & Co. and J.P. Morgan Securities are the financial advisors to Kaman.

This transaction is expected to close in the third quarter of 2019.

© 2019 Private Equity Professional | June 26, 2019

CD&R Adds to SunSource

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SunSource, a distributor of fluid power and fluid process components and a portfolio company of Clayton, Dubilier & Rice, has agreed to acquire The United Distribution Group.

The United Distribution Group (UDG) is one of the largest distributors of industrial components and assemblies in North America and has more than 140,000 SKUs of products. UDG operates through two subsidiaries: GHX Industrial, a distributor and fabricator of industrial gaskets and hoses; and United Central Industrial Supply, a provider of MRO supplies to underground and surface mining operators. UDG, led by its CEO Darrell Cole, is headquartered in Bristol, TN (www.udginc.com).

UDG was a portfolio company of American Securities beginning in April 2006 but ownership of the business was transferred to its lending group in April 2018.

SunSource is one of North America’s largest fluid power distribution companies. The company has more than 150,000 SKUs that are used in hydraulics, pneumatics, filtration, and automation systems in the industrial and mobile equipment markets. SunSource was acquired by Clayton, Dubilier & Rice from Littlejohn & Co. in December 2017. In May 2018, SunSource acquired Ryan Herco Flow Solutions, a distributor of fluid handling, filtration and flow control products with more than 70,000 SKUs, from Greenbriar Equity Group. SunSource is headquartered near Chicago in Addison, IL (www.sun-source.com).

“UDG shares many core business strengths and cultural values with SunSource, and the GHX and United Central businesses are highly complementary with SunSource’s existing business and product portfolio,” said David Sacher, CEO of SunSource.  “The combined company will occupy a strengthened position in the marketplace, benefiting from increased scale and an enhanced set of organic and inorganic growth opportunities, particularly in the fluid conveyance market. We believe the combination will drive incremental opportunities to create value for our customers, employees and suppliers, while also accelerating growth, profitability improvement and shareholder value creation.”

CD&R invests in European and US-based businesses.  Since founding in 1978, the firm has invested $25 billion in 78 companies across a range of industries with a total transaction value of approximately $100 billion. CD&R was founded in 1978 and is based in New York and London (www.cdr-inc.com).

SunSource has obtained committed financing for the transaction from Barclays, Credit Suisse and Deutsche Bank. Robert W. Baird was the financial advisor to UDG and Barclays was the financial advisor to SunSource.

This transaction is expected to close by the end of August 2018.

© 2018 Private Equity Professional | July 20, 2018

Advent Continues Roll-Up of Industrial Distribution

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selle BPI nf1Distribution International, a distributor and fabricator of mechanical insulation and a portfolio company of Advent International, has acquired Selle Supply Company and its sister company PBI Supply.

Both Selle Supply Company (Selle) and its sister company PBI Supply (PBI) are distributors of insulation products and construction materials, specializing in the lamination of fiberglass insulation for metal buildings. According to Advent, Selle and PBI comprise the largest regional metal building insulation fabricator/distributor in the United States. On a combined basis the companies have 6 warehouses and distribute material throughout the United States and Mexico. Selle is based in El Paso and PBI is based in Dallas (www.sellesupply.com) (www.pbisupply.com).

Majority ownership of Distribution International was acquired by Advent International in December 2014 from Audax Private Equity (now a minority investor) and The CapStreet Group.  Audax and CapStreet acquired Distribution International in August 2010 from Grey Mountain Partners.

distribution international nf1Distribution International (DI) is a value-added distributor of insulation, abatement supplies, fire protection products, refractory products, and safety & contractor supplies.  The company has 70 branch locations and serves customers in the commercial building, chemicals, energy, power, railcar and marine end markets. Most of DI’s sales are derived from ongoing maintenance and repair spending in industrial installations and commercial buildings. DI was founded in 1986 and is headquartered in Houston (www.distributionintl.com).

Distribution International has grown significantly over the past four years, having completed 14 acquisitions and has the broadest reach of any distributor of mechanical insulation products in the US and Canada.  The company’s most recent buy – before the acquisitions of Selle and BI Supply – was the June 2015 purchase of Insulation Fabricators, a fabricator and distributor of thermal and acoustical insulation products that is headquartered near Chicago in Hammond, IN (www.insulationfabricators.com).

Celeste Mastin nf1“We at DI are eager to enter the metal building insulation market. During our strategic assessment of the metal building lamination space, our market research indicated that Selle and PBI are ranked highly for customer service and delivery performance, making the company an ideal platform from which to grow our national footprint,” said Celeste Mastin, CEO of Distribution International.  “This acquisition is a significant milestone in the growth of our company and we look forward to being part of the metal building insulation industry and bringing the successful team from Selle and PBI into DI.”

Advent International focuses on buyouts and strategic restructuring opportunities in five sectors: business and financial services; healthcare; industrial; retail, consumer and leisure; and technology, media and telecom.  Advent has offices in 16 countries and employs 170 investment professionals across Western and Central Europe, North America, Latin America and Asia. Founded in 1984 and headquartered in Boston, Advent has $33 billion in assets under management and has completed more than 300 buyout and private equity transactions (www.adventinternational.com).

© 2015 PEPD • Private Equity’s Leading News Magazine • 10-21-15

Advent Acquires Insulation Fabricators

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ifi nf1Distribution International, a portfolio company of Advent International, has acquired Insulation Fabricators, a fabricator and distributor of thermal and acoustical insulation products.

This is the 12th acquisition completed by Distribution International (DI) over the past four years and is a continuation of a strategy launched by prior owners to consolidate the mechanical insulation distribution industry.  Advent acquired DI in December 2014 from Audax Private Equity and The CapStreet Group, which had acquired the company in August 2010 from Grey Mountain Partners.

Distribution International is a distributor of thermal and acoustical insulation and related supplies.  The company has 70 branch locations and serves customers in the commercial building, chemicals, energy, power, railcar and marine end markets. Most of DI’s sales are derived from ongoing maintenance and repair spending in industrial installations and commercial buildings.  DI was founded in 1986 and is headquartered in Houston (www.distributionintl.com).

The buy of Insulation Fabricators expands DI’s service range with additional locations in Ohio and West Virginia. Insulation Fabricators was founded in 1979 by Larry McNabb and is headquartered near Chicago in Hammond, IN (www.insulationfabricators.com).

Advent International focuses on buyouts and strategic restructuring opportunities in five sectors: business and financial services; healthcare; industrial; retail, consumer and leisure; and technology, media and telecom.  Advent has offices in 16 countries and employs 170 investment professionals across Western and Central Europe, North America, Latin America and Asia. Founded in 1984 and headquartered in Boston, Advent has $33 billion in assets under management and has completed more than 300 buyout and private equity transactions (www.adventinternational.com).

2015 PEPD • Private Equity’s Leading News Magazine • 6-4-15

Brazos Continues the Build of BlackHawk

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blackhawk nf1BlackHawk Industrial Distribution, a portfolio company of Brazos Private Equity Partners, has completed the acquisitions of Packaging, Inc. and Pioneer Tool Supply, the 11th and 12th add-on acquisitions completed by BlackHawk since its formation by Brazos.

BlackHawk Industrial Distribution was formed by Brazos in 2010 in partnership with William Scheller, the former CEO and President of ORS Nasco, a wholesale distributor of industrial supplies and a portfolio company of Brazos that was sold to United Stationers in 2007.  In September 2010 BlackHawk made is first acquisition with the purchase of Duncan Industrial Solutions (Oklahoma City, OK) and in December 2010 acquired Rogers Industrial Supply (Fort Smith, AR).  Both Duncan and Rogers are distributors of name-brand industrial MRO supplies and equipment.

Packaging, Inc. is a distributor of packaging, fastening and strapping tools, machinery and other consumable packaging products to companies operating primarily in the Midwest region of the US.  The company was founded in 1957 and is headquartered in Eden Prairie, MN (www.packinc.com).

Pioneer Tool Supply is a distributor of metalworking and cutting tools to companies operating primarily in the New England region. In addition to its distribution services, the company offers grinding for resharpening and reconditioning tooling.  Pioneer Tool Supply was founded in 1948 and has facilities in Massachusetts, Connecticut, New Hampshire, and Maine. The company is headquartered north of Hartford, CT in Agawam, MA (www.pioneertool.com).

Randall Fojtasek nf2“We are excited to help BlackHawk complete these two highly complementary acquisitions,” said Randall Fojtasek, Co-Founding Partner and Co-CEO of Brazos and Chairman of BlackHawk. “BlackHawk’s successful growth is a great example of Brazos’ buy-and-build strategy. Since Brazos invested in BlackHawk in 2010, the company has made twelve acquisitions and has grown significantly, gained market share and consolidated its leadership in key product categories in the broader industrial distribution market.”

Today, BlackHawk is a top-30 distributor in the North American industrial supply market. The company focuses primarily on technical, recurring and consumable segments within industrial distribution, with an emphasis on the cutting tools and abrasives product category. BlackHawk serves more than 6,000 customers through a direct salesforce supported by a network of 25 sales locations. The company is headquartered in Tulsa (www.blackhawkid.com).

bill scheller nf1“Brazos has been a terrific sponsor for BlackHawk, guiding our organic and acquisitive growth and helping us build a great distribution platform,” said Bill Scheller, BlackHawk’s CEO and President. “We look forward to continuing to grow and enhance the company with Brazos’ assistance and with the support of our employees, customers, vendors and financing partners.”

Brazos makes equity investments of $25 million to $100 million in middle-market companies with enterprise values from $50 million to $500 million. Sectors of interest include consumer, healthcare, commercial & industrial, and business services. Brazos has approximately $1.4 billion of equity capital under management and is based in Dallas (www.brazospartners.com).

BlackHawk and Brazos are looking to acquire additional US-based distributors participating in the $400 billion industrial distribution end market.

© 2015 PEPD • Private Equity’s Leading News Magazine • 4-9-15

Audax and CapStreet Acquire Pacific Insulation

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pacific insulation nf1Distribution International, a portfolio company of Audax Private Equity and The CapStreet Group, has acquired Pacific Insulation Company.  Distribution International (DI) was acquired by the two private equity firms in August 2010 from Grey Mountain Partners.

Pacific Insulation Company is a distributor and fabricator of industrial and commercial insulation. The company also offers refractory products, marine products, tools and accessories, mastics and adhesives, removable pads, and MRO products. Pacific Insulation is headquartered in Los Angeles (www.pacificinsulation.com).

Distribution International is a distributor of insulation, related specialty fabricated products, and safety supplies to the industrial, commercial, and marine end markets.  The company serves industrial, commercial and marine customers from distribution centers in Texas, Louisiana, Mississippi, Alabama, Arkansas, Tennessee, Kentucky, Missouri, Michigan, South Carolina, North Carolina, Virginia, Maryland, New York, and New Jersey in the United States, as well as British Columbia, Alberta, Ontario, Quebec, and Nova Scotia in Canada. The addition of Pacific expands DI’s footprint into California, Nevada, Arizona, and New Mexico while also adding another location in Texas.  Distribution International is headquartered in Houston (www.distributionintl.com).

Audax Private Equity and The CapStreet Group have grown Distribution International through add-on acquisitions.  In 2013, DI completed the acquisitions of Midwest Sales, a distributor of industrial and commercial insulation products based in Saginaw, MI; GlassCell Isofab, a distributor of insulation products based in Toronto; Insulation Services, a single-site distributor of thermal and acoustic insulation products based in Greenville, SC; and Mid-Tex Distribution Company, a distributor of thermal and acoustical insulation products based in San Antonio, TX.

celeste mastin nf1“With the purchase of Pacific, DI has added twelve locations and now has a presence in four additional states, providing a platform for growth in the western USA. The acquisition of Pacific allows DI to better serve our nation-wide customers by providing transcontinental service in both the USA and Canada. Pacific features a strong group of talented employees and we are very excited to have them on our team,” said Celeste Mastin, CEO of Distribution International.

The Audax Group makes control investments of $10 million to $100 million in middle market companies with transaction values of $25 million to $500 million. Sectors of interest include industrial manufacturing; energy; outsourced industrial services; consumer products; healthcare devices and services; non-asset based logistics; technology; aerospace & defense; business services; and direct marketing.  Audax has over $6 billion in assets under management in its private equity, mezzanine, and senior debt businesses. The firm was founded in 1999 and has offices in Boston and New York (www.audaxgroup.com).

CapStreet makes control investments in privately held, lower middle market companies that are headquartered in Texas and surrounding states. CapStreet targets industrial and diversified business service companies with annual EBITDA between $5 million and $20 million.  Since the firm’s founding in 1990, CapStreet has invested in 35 platform companies.  The firm is headquartered in Houston (www.capstreet.com).

2014 PEPD • Private Equity’s Leading News Magazine • 9-9-14

Sun Capital Exits Certified Power

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certified power nfSun Capital Partners has completed the sale of Certified Power, a distributor of fluid power and power train products, to Brinkmere Capital Partners.

Certified Power is a distributor of fluid power and power train products to the on- and off-highway mobile equipment market. The company will also assist its customers with the design, engineering, service and repair of customized products. Certified Power is headquartered near Chicago in Mundelein, IL and has nine locations throughout the Midwest (www.certifiedpower.com).

leder nf2Certified Power was acquired by Sun Capital Partners in April 2012. “We are pleased that under our ownership, Certified Power has been able to capitalize on the market opportunity we saw when we acquired the business,” said Marc Leder, Co-CEO at Sun Capital. “The strategic efforts to enhance the company’s capabilities and solutions have it well-positioned to continue building on its success.”

This transaction marks Sun Capital’s third exit of 2014. Last year the firm completed eight exits and two IPOs, leading to more than $1 billion in realizations for the year — a record for the firm.

Sun Capital Partners is focused on leveraged buyouts, equity, debt, and other investments in companies that can benefit from its in-house operating professionals and experience. Sun Capital has invested in and managed more than 335 companies worldwide with combined sales in excess of $45 billion since the firm’s inception in 1995. Sun Capital has offices in Boca Raton, Los Angeles, and New York as well as affiliates with offices in London, Paris, Frankfurt, Luxembourg, Shanghai and Shenzhen (www.SunCapPart.com).

Brinkmere is a Southeastern-based private investment firm specializing in acquiring and developing small businesses. The firm was founded in 2012 by Managing Director Russell Beard and is based in Jacksonville, FL (www.brinkmere.com).

© 2014 PEPD • Private Equity’s Leading News Magazine • 3-24-14

Industrial Opportunity Partners Acquires Western Tool Supply

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Carlson Systems, a portfolio company of Industrial Opportunity Partners, has acquired Western Tool Supply, a distributor of tools and supplies. Industrial Opportunity Partners acquired Carlson in August 2009.

Western Tool is a distributor of tools and supplies including hand-held nailers, staplers, and related fasteners to the construction, industrial, and woodworking sectors. Western Tool operates 14 sales offices in Oregon, Washington, Idaho, Utah and Montana and is headquartered in Salem, OR (www.westerntool.com).

“We are excited to support our platform investment in Carlson with the highly strategic acquisition of Western Tool. Carlson is positioned for growth both internally and through strategic acquisitions such as Western Tool. Western Tool represents Carlson’s first add-on acquisition since IOP invested in Carlson in 2009,” said Ken Tallering, Senior Managing Director of IOP.

Carlson is a multi-regional distributor of product assembly systems serving the fastening and packaging needs of construction, industrial, and OEM customers. Products include hand-held nailers, staplers, tapers, marking and labeling products, stretch/shrink wrappers, and strappers.

From its 52 sales offices in 22 states and parts of Mexico, Carlson sells over 15,000 SKUs sourced from over 900 vendors. The company is headquartered in Omaha (www.carlsonsystems.com).

“The acquisition of Western Tool expands Carlson’s geographical coverage to the Pacific Northwest. The combined company will benefit through its broadened customer relationships and product offerings. The Carlson platform is very well positioned and has significant momentum as its end markets continue to rebound,” said Jim Todd, Chairman of Carlson and an Operating Principal of IOP.

Industrial Opportunity Partners (IOP) focuses on acquiring middle-market manufacturing and value-added distribution businesses, typically with revenues between $30 million and $350 million. IOP targets businesses with strong product, customer, and market positions and provides management and operational resources to support sales growth and operational improvements. The firm has $460 million of committed capital and was founded in 2005. IOP is headquartered in Evanston, IL (www.iopfund.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 6-7-13

Oak Hill Capital Partners Acquires Paulin & Co.

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The Hillman Companies, a portfolio company of Oak Hill Capital Partners, has acquired Paulin & Co., an industrial products distributor and manufacturer.

Paulin & Co. is a Canadian distributor and manufacturer of fasteners, fluid system products, automotive parts, and retail hardware components. The company’s customers include retail hardware, industrial, and OEM and aftermarket automotive companies. Paulin’s distribution facilities are located across Canada in Vancouver, Edmonton, Winnipeg, Toronto, Montreal, and Moncton, as well as in Flint, MI and Cleveland, OH. The company also has four manufacturing facilities all located in Ontario, Canada. Paulin & Co. had annual revenues in 2011 of approximately C$139 million. The company was founded in 1920 and is based in Toronto (www.hpaulin.com).

Barclays Bank acted as financial advisor to Hillman in connection with the transaction and provided committed debt financing.

Hillman is a value-added distributor of approximately 80,000 SKUs, consisting of fasteners, key duplication systems, engraved tags, and related hardware items to over 20,000 retail customers in the U.S., Canada, Mexico, South America, and Australia, including home improvement centers, mass merchants, national and regional hardware stores, pet supply stores, and other retailers. Oak Hill Capital Partners acquired Hillman in May 2010 in partnership with the company’s senior management team. Hillman was founded in 1964 and is headquartered in Cincinnati (www.hillmangroup.com).

Oak Hill Capital Partners is a private equity firm with more than $8 billion of committed capital from entrepreneurs, endowments, foundations, corporations, pension funds and global financial institutions. Robert Bass is the lead investor. Over a period of more than 24 years, the professionals at Oak Hill Capital Partners and its predecessors have invested in more than 70 private equity transactions. The firm is located in Stamford, CT (www.oakhillcapital.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 2-20-13

Blue Point Capital Partners Acquires Smith-Cooper

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Blue Point Capital Partners has acquired Smith-Cooper International, a designer, producer, importer and distributor of pipe, valves and fittings.

Smith-Cooper represents the 14th platform company for Blue Point II, a 2006 vintage lower middle-market buyout fund with $400 million in committed capital. Co-investors in this transaction included TIAA, Babson Capital, CDIB Capital (the overseas investing arm of China Development Financial Holding Corporation), BB&T Capital Partners and Smith-Cooper management.

Smith-Cooper International a designer, producer, importer and distributor of pipe, valves and fittings to the commercial and industrial, energy, chemical and petrochemical refining, and fire protection markets. Smith-Cooper offers over 22,000 SKUs and serves more than 2,500 customers globally. The company was formed in 1993 and is headquartered in Commerce, CA (www.smithcooper.com).

“We are excited to partner with the Smith-Cooper management team to continue the company’s long history of growth and profitability,” said Juli Marley, a partner with Blue Point. “Together with management and our operating resources, we plan to move on an accelerated path to grow the company’s current domestic footprint, extend Smith-Cooper’s international reach and augment the company’s procurement team. We look forward to impacting and sharing in this next phase of growth.”

Blue Point Capital Partners is a lower-middle-market private equity firm that invests in manufacturing, distribution and service businesses generating $20 million to $200 million in revenue. The firm has over $800 million in committed capital and has offices in Charlotte, NC; Cleveland, OH; Seattle, WA and Shanghai, China (www.bluepointcapital.com).

“We are enthusiastic about our partnership with Blue Point and the unique value we believe they bring to the table,” said Ron Kurstin, chief executive officer of Smith-Cooper. “We’ll benefit from Blue Point’s presence in China as we continue to expand our product lines, shorten our lead times to market and serve new customers and geographies. Smith-Cooper has grown into a global leader in our industry, and we are excited about the outlook for our business,”

© 2012 PEPD • Private Equity’s Leading News Magazine • 10-19-12

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