The Branford Team Has Won Considerable Industry Recognition

  • 2015 M&A 40 Under 40 Emerging Leader – Eric Korsten
  • 2012 M&A Deal of the Year (between $50-75 million) – Branford
  • 2010 M&A Deal (between $30-50 million) – Branford
  • 2010 M&A Environmental Deal of the Year (up to $100 million) – Branford
  • 2001-2010 M&A Deal of the Decade (between $30-50 million) – Branford

Highlights

7/11/17

Lunch with John S. Castle

Published in PE HUB WIRE


Salad dominated my first lunch with John S. Castle, a managing partner of Branford Castle Partners. “The lines are out the door,” said Castle, who had to push his way through a crowd of people to meet me.


Why were a group of well-dressed executives queued up outside in the heat Monday? To buy a salad. I won’t disclose which fast food chain it was. Castle and I tallied up the various salad-related establishments that are seemingly gobbling up Manhattan. There’s Just Salad, sweetgreen, Essen Slow Fast Food and, of course, Chop’t. I confessed I’m a Just Salad member.


Castle, who said he has “no vested interest in salad,” said it was Chop’t that started the craze. He wondered if the lines outside were really just a matter of getting customers out the door faster. “It’s clear that [Chop’t] created a real category here. This is just an observation,” he said.


For lunch, since we were focused on it, we both had chopped salads (but not from Chop’t). We finally talked about what we were meant to discuss: Branford Castle Partners, the former family office that chose in 2015 to morph into a private equity firm. Castle, who joined in 2002, said the firm decided to make the switch because it “wanted more.”


The GP combined its own money, along with family office and institutional funding, to raise its first pool. In October, Branford Castle Partners announced the final close of its $116 million debut fund. “We wanted to take the next step,” Castle said of the switch to PE. “We wanted more.”


The lower-middle-market PE firm, a generalist investor, has done two deals so far: Surface Preparation Technologies in February and Earthlite Massage Tables last year. Branford Castle Partners will invest up to $20 million to $25 million in companies with EBITDA between $1.5 million and $15 million.


The biggest difference between a family office and a PE firm? “You have to put money to work,” said Castle.


Castle wouldn’t say if he was interested in investing in a salad chain.

7/6/17

Profiler Talk: Branford Castle Partners’ Eric Korsten on the purchase of roadway safety firm

Earlier this year, New York City-based Branford Castle Partners purchased the majority stake in Mechanicsburg, Pennsylvania-based Surface Preparation Technologies (SPT), a provider of rumble strips and related roadway traffic safety services.


Founded in 1988, SPT is the largest player in the space, having installed more than 150,000 miles of rumble strips across 49 states.


Mergermarket spoke to Eric Korsten, Managing Director at Branford, about the deal and how increasing driver distraction is fueling a growing demand for SPT’s services.


Initial appeal


SPT obtained a dominant market position through a unique combination of roadway infrastructure expertise and an extensive fleet of proprietary equipment, according to Korsten, who noted that the company designs and manufactures its high-performance, patented rumble strip machines. SPT also benefits from infrastructure/highway spending in both good and bad times, and has a strong management team that wanted to remain involved in the business.


Branford participated in a formal auction process led by SPT’s investment banker, Delancey Street Partners. Korsten declined to disclose the exact deal value.


Korsten said Branford performed extensive due diligence, leveraging its professional relationships with accounting firm BDO, as well as Investor Group Services, the latter of which performed an intensive industry study that included more than 100 sector participants.


Branford recently completed a raise, contributing to its appeal as an acquirer, Korsten noted. Additionally, two of its last three portfolio company CEOs have made overall returns of between 30x – 45x on their rollover equity investment.


A notable challenge in the transaction was getting Branford’s lender partners comfortable with the fact that SPT requires a bonding facility to support certain jobs it performs, according to Korsten. “Bonding is common in this industry and we feel it helps create an effective barrier to entry,” he explained.


Growth strategy


SPT intends to aggressively grow its domestic market share for existing services, which includes materially increasing the size of its fleet of proprietary equipment. In addition, there is significant potential to expand into related new services, some of which have the potential to be “game changing” with respect to self-driving and semi-autonomous vehicles.


The industry is highly fragmented and ideal for consolidation. SPT is actively considering tuck-in acquisitions, and where there is a particularly good fit with the company’s mandate and culture, it will consider transformational buys, Korsten said.


Acquisitions could be funded through any combination of cash, earn-outs, senior or junior debt and rollover equity, among other forms of consideration, Korsten noted.


Branford invested in SPT out of a committed fund, which had a final close in October 2016. The fund has significant capacity to support organic growth and many subsequent platform buys, he added.


Industry tailwinds


In support of accelerated organic growth is a major five-year highway-spending bill (FAST Act) that provides for consistently increasing levels of federal highway spending, Korsten mentioned.


Additionally, the use of rumble strips is growing around the world as they are a proven and cost effective way to reduce highway fatalities, he said. Recently, the rate of highway fatalities has been growing rapidly, due to the increasing distractions faced by most drivers. Rumble strips, especially centerline rumble strips, are an ideal way to counter those hazards, according to Korsten.


SPT’s typical end customers are state departments of transportation. SPT either contracts directly as a general contractor or indirectly as a subcontractor.


Advisors


Branford’s advisors for the SPT deal included Carl Roston and Jed Freeland of law firm Akerman, Sean Windsor of accounting firm BDO, and Ashley Shih of due diligence firm Investor Group Services.


SPT’s advisors were Patrick Dolan and David Allebach of investment bank Delancey Street Partners, and Linsey Bozzelli of law firm Blank Rome.


Abacus Finance Group provided senior debt financing, while Brookside Mezzanine Partners provided mezzanine debt financing. Both lender partners made equity co-investments in the transaction.


The existing SPT management team invested in the transaction alongside Branford.


To see full profiles, including deals and relationships for each individual involved in this deal, download the Profiler app, available exclusively to Mergermarket subscribers.


About Branford Capital Partners


Branford mainly invests in companies with up to USD 100m in sales and USD 15m in EBITDA, and typically holds companies for three to five years. The firm and its affiliates, including Castle Harlan, have closed hundreds of acquisitions since the firm’s founding in 1986. Another recent notable Branford investment is Earthlite Massage Tables, a global manufacturer and supplier of health and wellness equipment.

2/16/17

Branford Castle Acquires Surface Preparation Technologies

The nation’s leading provider of rumble strips


Branford Castle Partners, L.P. (“Branford Castle”), a New York City-based private equity firm, today announced that its affiliate has purchased Surface Preparation Technologies, LLC (“SPT”), the nation’s leading provider of rumble strips and related roadway safety services. The existing SPT management team invested in the transaction alongside Branford Castle’s affiliate Fund and will continue to lead the company.


“Rumble strips are vital highway and roadway safety features that alert inattentive drivers of potential danger, and are a proven and cost-efficient measure to keep travelers safer by reducing the risks of crossover and run-off traffic accidents,” said Steve Burke, CEO of SPT.


Based in Mechanicsburg, PA, SPT has garnered its leading market position through a unique combination of roadway infrastructure expertise and its extensive fleet of proprietary equipment. SPT designs and manufactures its high-performance, patented rumble strip machines, or “mills”. SPT’s mills run significantly faster and are more durable than competitors’ machines. (www.rumblestrips.com)


The Company, founded in 1988, is considered a pioneer in the roadway safety industry and has installed more than 150,000 miles of rumble strips across 49 states. The ultimate customer for SPT’s services is typically a state’s Department of Transportation.


“SPT has established itself as the national leader in the rumble strip market with a reputation among its customers for outstanding service and reliability,” said Eric Korsten, Managing Director at Branford Castle. “We are especially excited to work on this investment with Abacus Finance Group, which is providing senior debt financing, and Brookside Mezzanine Partners, which is providing mezzanine debt financing. Of particular note, both of our lender partners have also made equity co-investments in the transaction.”


“We are delighted about the opportunity to partner with CEO Steve Burke and his experienced management team to help them continue to build the company,” said Laurence Lederer, Managing Director at Branford Castle. “SPT is exceptionally well-positioned to continue to achieve strong organic growth and to benefit from increasing levels of infrastructure spending in the United States.”


Branford Castle was advised by its legal counsel, Akerman LLP. Terms of the transaction were not disclosed.

7/26/16

Branford Castle Acquires Earthlite Massage Tables

A leading global brand in health and wellness


Branford Castle Partners, LP (“Branford Castle”), a New York City-based private equity firm, today announced that its affiliate has purchased Earthlite Massage Tables (“Earthlite”), a pre-eminent manufacturer and supplier of health and wellness equipment. The sellers were the company’s founders.


The company offers over 300 active SKUs of massage tables, alternative beauty and wellness equipment, supplies and accessories, oils and creams, manicure and pedicure equipment and medical exam equipment. Earthlite serves a diverse customer base of more than 3,700 customers in over 120 countries. The existing Earthlite management team invested in the transaction alongside Branford Castle’s affiliate and will continue to lead the company.


Headquartered in Vista, CA, Earthlite’s most prominent products are its massage tables, which garner 20% global market share. The company has a family of six proprietary brands of massage tables that are among the longest-standing and most-respected in the market, including Living Earth Crafts, Stronglite, Earthlite and Inner Strength. (www.earthlite.com)


Across the company’s wide spectrum of products, end-customers include most leading international hotel chains, many of the leading brands in the fast-growing franchised day spa segment and thousands of individual massage therapists. Earthlite has received American Spa Magazine’s Professional’s Choice Awards in the following distinguished categories: “Favorite Treatment Table Manufacturer” every year from 2010 through 2015, “Favorite Nailcare Furniture Manufacturer” in 2014 and 2015, and “Favorite Company for Manufacturer Support.”


“Earthlite has established itself as a global leader in the wellness products market with an unparalleled reputation for product quality and innovation,” said Laurence Lederer, Managing Director at Branford Castle. “We are excited about this investment and the opportunity to partner with CEO Jim Chenevey and his excellent management team to help them continue to build the business. We believe that the company is poised to grow in its line of tables, and in many other product categories, both through organic growth and through strategic acquisitions.”


“We look forward to working closely with Branford Castle in the next stage of growth of our business,” said Chenevey. “The health and wellness market is expanding globally, and Earthlite is in an excellent position to take advantage of the growth opportunities.”


Branford Castle was advised by its legal counsel, Akerman LLP. “We are especially excited to be working with TCF Capital Funding which provided the senior debt financing, and Siguler Guff & Company, LP which provided mezzanine debt financing and made an equity co-investment for the transaction,” said Eric Korsten, Managing Director at Branford Castle.


Stout Risius Ross, Inc. served as financial advisor to Earthlite and TroyGould PC served as their legal advisor. Terms of the transaction were not disclosed.

6/2/16

John S. Castle, Managing Partner, provides insights in the Axial Network Forum on the role of the board of directors for private equity-owned businesses.

Click here to learn more.

4/18/16

John K. Castle participates in The M&A Advisor’s Stalwarts Roundtable.

Click here to download the report.

10/6/15

Eric Korsten, Managing Director, provides insights on “4 Ways Private Equity Can Outflank Strategic Buyers” in Axial Network Forum.

Click here to read the article.

6/01/15

Eric Korsten, Managing Director, named as an M&A Advisor 40 Under 40 Emerging Leader.

Click here to learn more.

5/18/15

John K. Castle – 2015 Peter Hilton Founder’s Award Recipient
5th Annual Champion’s Awards

Click here to learn more.

1/21/14

Branford Castle wins M&A Advisor Deal of the Year $50 million to $75 million. Click here to learn more.

11/25/13

Branford Castle has acquired a leading Florida based chain of company-owned deli restaurants. The transformative acquisition will allow a co-founder to retire and help position the company for future growth. The Branford Castle/Castle Harlan team has decades of experience in growing restaurant concepts including being the control owners of Morton’s of Chicago Steakhouses, McCormick & Schmick’s, Brio Tuscan Grille, Bravo! Cucina Italiana, and the exclusive Burger King Puerto Rico franchise, amongst many others.

Branford is excited to help existing management realize their goal of creating a national chain of restaurants.

11/25/13

Branford Castle’s John S. Castle on new investments, European spillover


1/21/13

Branford Castle wins M&A Advisor Deal of the Year $50 million to $75 million.

Click here to learn more about M&A Advisor.