Manufacturing

KPS Capital Partners Acquires Siac do Brasil

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KPS Capital Partners has announced that its portfolio company International Equipment Solutions (“IES”) has acquired Siac do Brasil Ltda. (“Siac”) from SIAC S.p.A. This is the third acquisition by IES since its formation. KPS formed IES in September 2011 as a platform for investments serving the construction, agriculture, landscaping, infrastructure, recycling, demolition, mining, and energy industries. At that time, KPS also announced IES’s first two acquisitions, Paladin Brands Holding and Crenlo from Dover Corporation. In November 2011, Mr. Stephen Andrews was retained as Chief Executive Officer of IES to lead the integration of IES’ first two acquisitions and to aggressively grow and globalize the company.

“The launch of IES has exceeded all of our expectations. In a brief nine months, we have created the leading independent engineered equipment company in the Western Hemisphere, completing three highly synergistic acquisitions and successfully transforming a purely U.S. company into a global competitor,” said Raquel Palmer, a Partner at KPS. “We are very excited about cooperating with SIAC and together our companies will p
rovide our customers with global manufacturing and service solutions. We look forward to continuing to aggressively grow IES through acquisitions around the world.”

Siac do Brasil is a manufacturer of cab enclosures and also manufactures locomotive cabs as well as complex fabrications for off-highway machinery, and its customers include original equipment manufacturers involved in the construction, infrastructure, mining, forestry and agriculture industries (www.siac.com.br).

International Equipment Solutions (IES) is an engineered equipment platform serving the construction, agriculture, landscaping, infrastructure, recycling, demolition, mining, and energy markets. IES operates through six operating units, including Paladin, Genesis, Pengo and Jewell, all of whom are leading manufacturers of engineered attachment tools for operator driven equipment, Crenlo, a leading North American manufacturer of cab enclosures for operator-driven equipment as well as specialty electronic enclosures, and Siac do Brasil, a supplier of heavy equipment cab enclosures and locomotive sub-assemblies in the South American market. IES’ customers include major OEMs, national rental fleet companies and hundreds of independent and OEM-aligned dealers. IES employs over 2,500 people and operates 15 manufacturing facilities in the United States, Germany, and Brazil. The company is based in Oak Brook, IL (www.iesholdings.com).

“The acquisition of Siac do Brasil is a critical strategic step in the growth and globalization of IES. We are very impressed with the company’s rapid growth trajectory, customer base, quality and technical capabilities. The acquisition not only expands many of our current North American OEM supply partnerships into the Brazilian market, but further broadens our customer base as well. Additionally, the acquisition introduces IES as an important supplier in the rapidly growing Brazilian locomotive market,” said Steve Andrews, Chief Executive Officer of IES.

“As demonstrated with this acquisition, IES will continue our commitment toward supporting our customer’s global expansion initiatives with localized supply, technical resources and parts and service support. IES intends to invest significant additional capital and resources into Siac do Brasil to ensure the highest level of production quality for our customers and to increase capacity not only for cabs, but to support the growth of IES’ attachment tools product lines in South America as well. IES has made tremendous progress in our first nine months and I believe our future is very bright.”

SIAC S.p.A. is one of the largest global manufacturers of cab enclosures. In particular, SIAC S.p.A. specializes in the design and manufacture of driver units, complete cabs and components for earth moving and agricultural machinery and equipment. SIAC S.p.A. serves original equipment manufacturers through operations based in Italy, Slovenia, Bosnia, Brazil and India. The company was founded in 1966 and is headquartered in Bergamo, Italy (www.siac-cab.eu).

Financing for the transaction was provided by a syndicate of institutional investors agented by Regiment Capital Advisors and PNC Bank.

KPS Capital Partners is the manager of the KPS Special Situations Funds, a group of private equity funds with over $2.9 billion of committed capital focused on investing in restructurings, turnarounds and other special situations. KPS has created new companies to purchase operating assets out of bankruptcy; established stand-alone entities to operate divested assets; and recapitalized highly leveraged public and private companies. The KPS investment strategy targets companies with strong franchises that are experiencing operating and financial problems. The firm is located in New York, NY (www.kpsfund.com).

Aterian Investment Partners Acquires Burner Systems International

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Aterian Investment Partners announced today that it has acquired Burner Systems International, a supplier of gas appliance components, from Dyson Investments and other equity partners. “For more than 50 years, Burner Systems has been the recognized global leader providing the broadest product offering in the industry. With this investment, Burner Systems has been provided the necessary capital to accelerate its growth in high-quality, innovative products as well as manufacturing technology,” said Christopher Thomas, Partner of Aterian.

Burner Systems designs and manufactures components used by OEMs for gas-fueled cooking and heating appliances. The company was founded in 1960 and is headquartered in Chattanooga, TN with additional manufacturing facilities in Mexico, France, England, and Turkey (www.burnersystems.com).

Aterian Investment Partners invests in small-to-middle market businesses with $25 million to $500 million in revenues that are underperforming, turnarounds or otherwise unique situations. Industries of interest include consumer products; food and beverage; retail; restaurants; health care services; manufacturing; distribution; metals and mining; industrials; and chemicals & commodities. The firm will consider both control and non-control investments. Aterian is based in New York, NY (www.aterianpartners.com).

Bain Exits Motorized Vehicles Division of FCI

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Delphi Automotive announced today that it has entered into exclusive negotiations and has made a binding offer to acquire FCI Group’s (“FCI”) Motorized Vehicles Division (“MVL”), a manufacturer of automotive connection systems and a portfolio company of Bain Capital. The transaction is valued at €765 million on a cash and debt-free basis (approximately $972 million at current exchange rates) and is expected to close by year-end 2012.

MVL, which will become part of Delphi’s Electrical/Electronic Architecture segment, is a provider of interconnection systems for a range of applications in the safety restraint systems, powertrain and electrical vehicles markets. MVL had revenue of €692 million in the year ended December 31, 2011.

FCI is a manufacturer of connectors for use in electronic, micro-connector, electrical, and automotive applications. The company was acquired by Bain in 2005. FCI is based in Guyancourt, France (www.fci.com).

Bain Capital manages several pools of capital, including private equity, venture capital, and public equity and leveraged debt assets. The firm has more than $66 billion in assets under management. Since its inception in 1984, Bain Capital has made private equity investments and add-on acquisitions in more than 300 companies in a variety of industries around the world. The firm has offices in Boston, New York, Chicago, London, Munich, Tokyo, Shanghai, Hong Kong and Mumbai, with over 800 employees worldwide (www.baincapital.com).

Arsenal Acquires Clifton Adhesives

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Royal Adhesives & Sealants, a portfolio company of Arsenal Capital Partners, has announced that Royal will acquire substantially all of the assets of Clifton Adhesives, a provider of adhesives and coatings. “Clifton has a long history supplying adhesives to the demanding aircraft and marine markets. The acquisition of Clifton and merger with Royal represents another important milestone in our strategy to further build a leading adhesives, sealants and coatings business offering customized and proprietary solutions and is the third Royal acquisition in the last six months underscoring our determination to build a market leading adhesives, sealants and coatings business,” said Tim Zappala, a Partner at Arsenal Capital.

Clifton Adhesives is a supplier of thermoplastic (polyurethane) and elastomeric (polychloroprene) adhesives and coatings to the aerospace, military, recreational and commercial marine markets. The company’s products are used in the fabrication of inflatable structures. Clifton Adhesives is based in Wayne, NJ (www.cliftonadhesive.com).

“We continue to identify leading niche companies that will enhance our product offerings to the markets in which we have chosen to compete. The addition of Clifton will broaden our customer base in the aircraft and marine markets,” said Ted Clark, Chief Executive Officer of Royal. “Clifton’s elastomeric adhesives will add to our growing portfolio of leading adhesives and sealants technologies and we look forward to working with the Clifton team to successfully integrate the Clifton business into Royal.”

Royal Adhesives & Sealants is a producer of proprietary, high-performance adhesives, sealants, coatings and polymers. Royal offers a range of specialty formulated products designed to solve complex bonding, laminating and sealing supplications across a range of markets, including aerospace and defense, construction, specialty packaging, automotive and industrial. The company is based in South Bend, IN (www.royaladhesives.com).

Arsenal Capital acquired Royal in 2010 and since grown the company organically and through targeted acquisitions. Shortly after completing the purchase by Arsenal Capital, Royal acquired Para-Chem, a provider of specialty adhesives, coatings and polymers. In November 2011, Royal acquired Craig Adhesives a supplier of ultraviolet light cured adhesives and coatings and in April 2012 added Extreme Adhesives, a supplier of reactive assembly adhesives.

“We are building the Royal adhesives business in part by selectively identifying niche acquisitions in this specialty sub sector where we can apply our deep industry knowledge to achieve enhanced growth. We are well on our way to building a strong company that will itself become a leading competitor on a global scale,” said John Televantos, a Partner at Arsenal Capital.

Arsenal Capital Partners makes investments in middle-market specialty industrial, healthcare and financial services companies with $50 million to $400 million in enterprise value. The firm invests in niche industry sectors where it has prior experience and where its operating resources can help facilitate incremental growth and margin improvement. Industries of specific interest include: specialty & fine chemicals; segments of healthcare; transportation and logistics; power generation; aerospace & defense; process industry components and services; and financial services. Arsenal currently has $800 million of committed equity capital and is based in New York, NY (www.arsenalcapital.com).

Catterton Partners Exits MonoSol

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Catterton Partners today announced that it has entered into an agreement to sell MonoSol, a manufacturer of water-soluble films used in consumer applications, including automatic dishwasher and laundry detergent unit-dose soluble delivery systems, to Kuraray Co. “Catterton has been a tremendous partner for us,” said MonoSol CEO P. Scott Bening. “In addition to providing consumer insight on our end markets, Catterton helped guide us through substantial investments in capital expansion, product innovation, and marketing activities to underpin our growth.”

MonoSol offers a range of water-soluble delivery systems for unit-dose applications for consumer, agricultural chemicals and industrial products, release films, transfer printing, embroidery support films, water-soluble laundry bags, edible films and TerraLOC, a dust abatement system. The company was founded in 1953 and is based in Merrillville, IN with manufacturing facilities in Portage, IN; La Porte, IN; and Hartlebury, UK (www.monosol.com) (www.terraloc.com).

Since investing in MonoSol in 2007, Catterton Partners has worked with the MonoSol management team to develop and enhance its technology in water-soluble films, a development that has driven consumer adoption of unit-dose (single serve) delivery in multiple applications. Most notably, MonoSol’s environmentally sustainable MonoDose delivery systems has been an innovation in the automatic dishwasher and laundry detergent markets where consumers have embraced the convenience of such brands as Cascade ActionPacs and Tide Pods.

“We are proud of the significant growth and success we were able to achieve working with the management team at MonoSol. MonoSol’s leading technologies, strong customer relationships and track record of innovation have allowed the company to enjoy tremendous success,” said Scott Dahnke, Managing Partner at Catterton Partners. “This transaction represents a terrific outcome for MonoSol, Kuraray and Catterton, and we are confident that MonoSol will continue to thrive under new ownership. Moreover, we continue to pursue opportunities to invest in leading companies which offer proprietary ingredients and vital technologies to the consumer industry, such as MonoSol.”

Morgan Stanley & Co. acted as financial advisor to MonoSol in connection with the transaction.

Founded in 1989, Catterton Partners focuses exclusively on the consumer industry. The firm invests in all major consumer segments, including Food and Beverage, Retail and Restaurants, Consumer Products and Services, and Media and Marketing Services. The firm has more than $2.5 billion in capital under management and is located in Greenwich, CT (www.cpequity.com).

Riverside Exits MK Chimney Systems

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The Riverside Company has completed the sale of MK Chimney Systems to French buyer Isotip-Joncoux Group. The sale of the Polish producer of chimney systems, liners and related products generated a gross cash-on-cash return of 2.9x. Riverside invested in MK in 2006.

“Riverside was a great partner in our growth. Within a short period of time, we implemented a new market strategy, completely modified production processes and changed the ERP system, completed an acquisition in Germany and improved the product portfolio. The company is now not only very profitable but diversified in terms of customers, products and suppliers,” said MK Chimney CEO Piotr Siudak.

MK manufactures and distributes branded flue gas extraction systems made of refined steel to customers throughout Europe. The company offers a variety of chimney systems, including single wall chimneys, double wall chimneys, condensation systems, chimney cowls and other products. The company is based in Zary, Poland (www.mkzary.pl).

“MK was a great company for Riverside’s international and growth-oriented approach,” said Principal Tomasz Glowacki, who led the transaction for Riverside, “Not only were we able to work with a strong management team, but we also had a great set of high-quality products upon which to expand the company. We’re proud of the work we did to further develop and build the company over the last six years.” Working with Mr. Glowacki on the transaction for Riverside were Operating Partner Fabio Pesiri, Principal Adam Pietruszkiewicz and Vice President Marcin Goszyk.

CAG advised Riverside on the sale of MK, and CMS Cameron McKenna provided legal counsel to the sellers.

The Riverside Company is a private equity firm focused on the smaller end of the middle market (“SEMM”). Riverside specializes in investing in SEMM companies (those valued up to $200 million) and partners with management teams to build companies through acquisitions and value-added growth. Since 1988, the firm has invested in 280 transactions with a total enterprise value of more than $6 billion. The firm is headquartered New York with additional offices in Atlanta, Chicago, Cleveland, Dallas, Los Angeles, San Francisco, and London (www.riversidecompany.com).

North Street Capital Bids for Winnebago Industries

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Winnebago Industries has received a letter from North Street Capital proposing to acquire all of the outstanding common shares of Winnebago Industries at a price of $11 per share in cash. The offer described in the letter is highly conditional, requiring, among other things, due diligence and further negotiation. The company advises that no offer has been made to shareholders and that they need not take any action at this time in response to North Street’s letter.

Winnebago Industries is a leading U.S. manufacturer of recreation vehicles used primarily in leisure travel and outdoor recreation activities. The company and its subsidiary build motor homes, travel trailers and fifth wheel products under the Winnebago, Itasca, Era and SunnyBrook brand names. The company is based in Forest City, IA (www.winnebagoind.com).

North Street Capital invests in middle-market companies with revenues ranging from $10 million to $800 million which have the capability to grow earnings at a rate of at least 10% per annum. Sectors of interest include automotive, consumer, retail and business services. The firm is based in Greenwich, CT (www.northstreetlp.com).