Things were busy last week for Brentwood’s Intrepid Investment Bankers, which closed four deals for four different clients, according to the firm’s founder, Jim Freedman, who also serves as chairman.
“We don’t always close four deals in a week, but there’s just a ton of activity and interest in middle-market private companies right now,” Freedman said. “We’re busy working on about 30 deals in total.”
The closed deals include the sale of traffic-safety apparel manufacturer M.L. Kishigo Manufacturing Co. by Newport Beach’s Solis Capital Partners to British distribution specialist Bunzl. Intrepid also represented Southwestern Eye Center in its acquisition by Miami-based H.I.G. Capital.
Freedman said the selling companies garnered interest from more than 30 prospective buyers each, which he said was a sign of a healthy market and also a product of private equity having money to burn.
Freedman said the high number of offers on every deal is something he hadn’t seen before.
“Most are private equity firms who want to put their money to work. They’re quality offers and it’s getting very difficult to decide on which offer to go with,” he said. “We’re doing a lot of due diligence to make sure it’s the right strategic fit for the seller.”
The full deal process typically takes about eight months to play out and the most difficult parts usually come at the beginning, Freedman said, which means when a situation such as four deals closing in a week comes up, it’s busy but not unmanageable.
“The closings themselves are anticlimactic because you’ve done 98 percent of the work ahead of time,” Freedman said. “That said, every closing has little things come up that can cause a little heartburn.”
Child’s Play
Brentwood Associates is betting big on little kids.
The private equity firm last week closed its fourth bolt-on deal for early childhood education company Excelligence Learning Corp., purchasing Frog Street Press Inc. Brentwood Partner Eric Reiter said the firm’s interest in the education sector stretches back many years and it always tries to have at least one portfolio company active in the space.
“Historically, we have done a number of education deals in each of our funds,” said Reiter. “Excelligence has been our most recent platform, which we’re very excited about.”
The acquisition of Frog Street is part of Brentwood’s plan to help Excelligence broaden its offerings.
“If you look at the Excelligence brands, they are really leaders in the marketplace,” said Reiter. “We’re making a horizontal play and want to expand those offerings to serve all stakeholders in the early childhood development space.”
The Frog Street acquisition will allow Monterey’s Excelligence to expand the reach of its services line. Frog Street, headquartered in Grapevine, Texas, provides curriculum guidance for teachers in public schools in 40 states, including California.
Reiter said as Frog Street is integrated, Brentwood would continue to pursue other strategic add-ons for Excelligence.
“We’re definitely looking to do more acquisitions,” he said. “We’ve already doubled the size of the business through four deals since we acquired Excelligence in December 2014. It’s exceeded our expectations.”
Impact Deal
West L.A.’s Caltius Equity Partners sold its stake in fire safety company Impact Facility Services last week for an undisclosed sum to Boston’s Audax Group Inc.
The deal was Caltius’ third in the facilities sector, with the firm saying Impact had grown substantially under its stewardship.
“The Impact team generated impressive revenue and profitability growth during our investment period, and the company is well-positioned for the future,” said Caltius Managing Director Michael Morgan. “We are confident that (Impact Chief Executive) Mike Lloyd and his team will excel partnering with Audax, and we wish them continued success.”
Lincoln International and Sheppard Mullin Richter & Hampton acted as financial adviser and legal counsel to Caltius, respectively.
Headed North
Downtown’s City National Bank, a subsidiary of Royal Bank of Canada, is set to expand into Minnesota with a co-branded regional banking center scheduled for a May opening in Minneapolis.
The office would be the first bank branch to carry the names of both City National and RBC since the Canadian bank purchased the L.A. institution for $5.4 billion in January 2015. The branch will serve both private clients and businesses, according to the banks.
“City National is a longtime provider of elite banking products and services and we are proud to have them as our partner in the Twin Cities, where RBC’s roots date back to 1909,” Tom Sagissor, president of RBC’s U.S. wealth management division, said in a statement.
Staff reporter Henry Meier can be reached at [email protected] or (323) 549-5225, ext. 221.
