What a Year for Heartwood Partners!
In 2020 we changed the name of our firm from Capital Partners to Heartwood Partners. The rebranding captured our hallmark lower-leverage, higher-equity investment approach and integrated partnership style with our portfolio management teams. 2020 certainly presented operating and market challenges that validated the Heartwood approach. Highlights include:
- None of our fourteen investment companies tripped a financial covenant with a lender.
- We changed the name our firm to Heartwood Partners to better reflect our differentiation.
- We completed three platform investments.
- Our investment companies completed four add-on acquisitions.
- We added five members to our team.
Our portfolio, across two active funds totaling $960 million in committed capital, now includes control investments in fourteen companies with approximately $1.5 billion in annual revenue. We have capital available to make new platform investments in companies with between $5 and $30MM in EBITDA and add-on acquisitions across our portfolio, please find our add-on criteria here.
After over 27 years being known as “Capital Partners”, in September 2020 we changed our firm name to “Heartwood Partners.” While this change did not break with the culture of integrity and partnership that we have developed since our founding in 1982, it does more clearly align with our unique investment approach. The term “heartwood” refers to the solid, innermost part of a tree, which yields the strongest timber and provides support to the tree. We believe this image captures our hallmark lower-leverage, higher-equity investment approach, and integrated partnership style with our portfolio management teams.
Portfolio-wide Debt Compliance and Liquidity
Several of our investment companies were impacted in the early phases of COVID. Fortunately, their strong balance sheets permitted management teams to address operating challenges without the complications of illiquidity or covenant compliance violations. They were also able to complete four corporate acquisitions.
New Platform Investments
- Microcare – Developer, manufacturer, filler, and packager of industrial-use cleaning fluids, coatings, and dispensing solutions for the electronics, fiber optic, medical, and precision cleaning end markets. To learn more, please visit www.microcare.com.
- Patten Seed – Approaching the market under the “Super-Sod” brand name, Patten Seed produces, markets, and supplies a variety of turfgrass products (e.g., sod, seed, soil, fertilizer) to landscape companies and contractors as well as directly to homeowners, municipal, and institutional. To learn more, visit www.supersod.com.
- A full-service label company – providing flexographic, digital, and offset label printing, in addition to folding carton and flexible packaging, primarily to the food and wine & spirits industries. (Formal announcement to come in Q1 2021.)
New Add-On Investments
- Premier Manufacturing – This acquisition culminated from more than two years of dialogue with Premier’s founder and CEO, a dialogue that began because the Premier brand and product set fit well within Minimizer’s “Tested and Tortured” brand identity. The Premier acquisition accelerated Minimizer’s growth strategy by expanding its product lines to include heavy-duty trailer coupling components, adding new manufacturing capabilities, and expanding its geographic reach. As part of this acquisition, Minimizer changed its name to High Bar Brands, while continuing to market and do business under the “Minimizer” and “Premier” brands.
- R&D Coatings – As a strategic supplier to Universal Woods for over 25 years, this acquisition brought “in house” the proprietary coating development and production capabilities that are vital to the competitive differentiation of the Universal Woods product line.
- Engineered Plastic Systems (EPS) – This manufacturer of high-density polyethylene (“HDPE”) boards used primarily in decking and railing products was a perfect for CMI due to the product’s brand identity as having superior performance in marine environments. The EPS acquisition also brought additional extrusion expertise and the ability to serve new and existing customers with a broader array of products.
- Greenville Colorants – Greenville serves similar and adjacent markets to Chromascape, and extended the company’s manufacturing footprint in the Southeast. Importantly, Greenville also expanded the technical capabilities, customers and end-markets served by Chromascape, adding the paper, printing inks, and textile industries.
- Demetrios Dounis joined as a Managing Director, most recently from The Compass Group where he was involved in all aspects of the investment and portfolio management process, and developed particular experience working with environmental services, niche manufacturing, and branded consumer companies.
- Angus Bass joined as an Associate following three years as a research associate at Franklin Templeton.
- Jack Careccia joined as an Associate following two years as an investment banking analyst at KBW.
- Saer Brown joined as an Associate following three years in investment banking at Stephens and EC M&A.
- Jason Phillips joined as Senior Vice President of Portfolio Operations, becoming the third member of Heartwood’s Value Specialists Group. Jason brings over twenty years of executive and consulting experience, primarily in operations and IT, and joined Heartwood with the goal of helping portfolio companies to become more proficient in such areas as supply chain management, logistics and data/business intelligence management.
Heartwood Partners is focused on partnering with family and management-owners. Our approach combines strategic execution with conservative capital structures to support long-term growth, including organic and acquisition-driven expansion into new products, services, and end markets. Please visit the Heartwood Partners website at www.heartwoodpartners.com to review our approach and investment portfolio.
Please contact the following members of the investment team at Heartwood Partners with investment or add-on opportunities: