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Business Pulse – September 2018

Deals aplenty in August

Business Pulse

September 19, 2018

By: Marc A. Fleagle and Evan J. Lyons

Marc Fleagle

Marc Fleagle

For the Northeast Ohio market, August was filled with deal activity by local private equity and corporate buyers. Leading off private equity activity was Blue Point Capital Partners, which completed both a recapitalization and an exit. Blue Point sold its interest in Selmet Inc., a manufacturer of titanium castings, to Consolidated Precision Products. Blue Point also completed a recapitalization of YS Garments Inc., dba Next Level Apparel, a designer and supplier of quality, casual apparel to the promotional product, ad specialty and other decorated apparel markets.

Evan Lyons

Evan Lyons

Similarly, Linsalata Capital Partners and PNC Erieview Capital exited Hospitality Mints, a producer of superior quality mints and candies, which sold to Mount Franklin Foods LLC. In addition, The Riverside Co. closed an add-on acquisition of SET Industrial Services, an industrial cleaning service company, for its platform investment, IFS Group.

With respect to corporate buyers, LyondellBasell Industries N.V. completed the largest disclosed deal, approximately $2.26 billion, or 11.3 times the last 12 months EBITDA, with its acquisition of A. Schulman Inc., a leading global supplier of high-performance plastic compounds, composites and powders. In another notable acquisition, Davey Resource Group, a subsidiary of The Davey Tree Expert Co., acquired Cincinnati-based New Age Communications Construction LLC, a provider of fiber, copper and cable TV services.

The month concluded with The J.M. Smucker Co.’s divesture of its U.S. baking business, operated in Toledo, to Brynwood Partners for $375 million. The sale included the Pillsbury, Martha White, Hungry Jack and White Lily brands. Under current market conditions, sellers continue to unload non-core assets in order to benefit from lofty valuations and unprecedented liquidity in the market.

Marc Fleagle is a vice president, and Evan Lyons is an analyst with MelCap Partners LLC. MelCap Partners is a middle-market investment banking advisory firm. For more information on MelCap Partners, please visit www.melcap.com or email [email protected].