An Active Year for Heartwood Partners!
In a very dynamic year for M&A of founder, family and management-held businesses, Heartwood Partners was an active participant. We completed two new platform investments, assisted several portfolio companies with accretive add-on acquisitions and successfully exited one platform investment. In addition, we continued to build out our investment team and support portfolio companies in strategic growth initiatives. Importantly, 2022 is off to a busy start with several new platform and add-on opportunities under letter of intent.
2021 Highlights:
- Exited our investment in Aftermarket Performance Group (“APG”), a direct-to-consumer business serving the automotive aftermarket enthusiast market, in a sale to Ripple Industries
- Completed two new platform investments in the environmental services and building products sectors
- Completed 6 add-on acquisitions for four portfolio companies
- Supported High Bar Brands in the construction of a new manufacturing facility and Universal Woods in a major capacity expansion effort
- Completed two dividend recapitalizations
- Added two members to our investment team and began recruiting efforts for several more
Our portfolio across three active funds totaling $1.5 billion in capital under management now includes control investments in 15 companies with approximately $1 billion in annual revenue. We have capital available to make new platform investments in companies with between $5 and $30MM in EBITDA and strategic corporate acquisitions across our portfolio (please find our add-on criteria here).
Platform Investments:
- Environmental Services Platform – Heartwood partnered with founding-management-owners to majority-recapitalize this waste management services and specialty waste processor focused on recycling hazardous waste.
- Building Products Platform – Heartwood partnered with the founding-management-owners to majority-recapitalize this prefabricated, modular steel building products manufacturer.
- Two companies under letter of intent slipped into 2022
Platform Exits:
Heartwood exited APG in a sale to Ripple Industries, a family-office investment company. The sale capped a highly successful investment focused simultaneously on growth and operational excellence. During Heartwood Partners’ ownership, APG completed six add-on acquisitions and built a world-class team that was integral in improving and integrating APG’s operating technology, analytics, and ERP system, organizing a strong supply chain, establishing an enthusiast culture, creating a private label offering, and expanding APG’s geographic footprint.
Portfolio Company Strategic Development:
- Sur-Seal acquired Spectex and an add-on to be announced shortly. Spectex engineers and converts flexible material and brought Sur-Seal added engineering talent, customer relationships, and production capability. Like Sur-Seal, the second acquisition company in 2021 partners with its customers to engineer materials and sealing solutions for HVAC, industrial, and aerospace customers. It also has a terrific culture and has won many “Best places to work” awards.
- MicroCare acquired Certol International, enhancing its exposure to the healthcare and consumer end-markets.
- Patten Seed Company acquired Mid-Tenn Turf and Frog Pond Turf, expanding its geographic reach into Tennessee and Alabama.
- ChromaScape acquired Custom Milling Corporation, expanding its mulch colorant business in the Northeast
- High Bar Brands completed building and began operations in a new 100,000 square feet headquarters and manufacturing that, by consolidating multiple facilities, increased efficiency and allows for High Bar Brands’ continued growth.
- Universal Woods completed a dividend recap, sale leaseback, sale of unused property and, most importantly, an expansion into a new, second coatings line facility (175,000 square feet), which more than doubled capacity.
- CMI completed a dividend recapitalization
Investment Team Expansion
- Ron Ahuja joined the firm as a Senior Associate and Mike Summe joined as an Associate. Both Mr. Ahuja and Mr. Summe focus on evaluating and executing investments as well as managing our portfolio of companies.
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:
John Willert
jwillert@heartwoodpartners.com
John Newman
jnewman@capitalpartners.com