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

6/29/18

Branford Castle Invests in Titan Production Equipment

5th Platform Transaction For Late 2016 Vintage Fund


NEW YORK, June 29 – Branford Castle Partners, the New York private equity firm, has made a significant investment in Titan Production Equipment, a leading manufacturer of oil and gas production equipment. Titan is a carve-out of the North American oil and gas production equipment assets of Exterran Corp. (NYSE: EXTN)


Titan is the fifth platform acquisition for the Branford Castle Fund, which had its final close in October 2016. “While we have been investing for 30 years, Branford has grown rapidly since forming our first institutional fund a little over a year ago,” said John S. Castle, President and CEO of Branford Castle Partners. “We are committed to generating superior returns for our investors by making disciplined investments and working alongside management teams to further develop great companies.”


Titan is a market leader in the design, engineering and manufacturing of oil and gas production equipment used to separate, process and treat hydrocarbon streams at the wellhead, gathering and processing stages of production. Former and current managers of Titan’s operations under Exterran, led by CEO Chris Werner and Senior Vice President Michael Collins, are investors in Titan and will operate the new business going forward. Titan is differentiated by its strong in-house design and engineering capabilities and its ability to produce and deliver high volumes of large, complex and customized products.


“Titan is Branford’s second platform acquisition this month. We continue to move rapidly to deploy investors’ capital to grow our portfolio of dynamic companies,” said David Castle, Managing Partner of Branford Castle Partners. “Titan is a particularly attractive investment because of the recent recovery of North American oil and gas drilling activity and the need for Titan’s equipment in its markets. As part of the transaction, Titan will become Exterran’s preferred supplier of production equipment for its U.S. and Canadian operations.”


Werner said, “Exterran’s production business developed a powerful market reputation over the years, largely because of the strong local workforce in Columbus, Texas. We are going to maintain this continuity in both labor and experience as the business escalates production.”


The purchase of Titan follows Branford’s acquisition of:


  • Drew Foam Companies, Inc., a leading provider of custom-fabricated expanded polystyrene foam (“EPS”) products serving the packaging, building products and consumer end-markets, primarily in the Southeastern United States;
  • Vitrek, a leading manufacturer of sophisticated electrical safety test and measurement equipment;
  • Surface Preparation Technologies, the leader in cutting rumble strips for roadway safety;
  • Earthlite Massage Tables, the world’s No. 1 brand of products for the spa, massage and wellness industries; and
  • Continuum Foot Spas, LLC, a leader in the premium pedicure chair market and a highly complementary bolt-on acquisition for Earthlite.


Terms of the Titan transaction were not disclosed. Castle Harlan, Inc., the New York private equity and investment firm, arranged and managed the transaction, which was first announced in April 2018.

June 2018

Spotlight on First-Time Funds with Laurence Lederer

Published in Pitchbook


As a first-time fund, how did Branford Castle successfully manage simultaneously fundraising, teambuilding, sourcing and executing one-off deals, while managing existing portfolio companies?


Laurence Lederer (Branford Castle): At Branford Castle, prior to raising our first institutional fund, we had a 30-year history operating as a family office and a link to Castle Harlan, a middle-market private equity firm. With those 30 years as a family office, and with the managing partners, CFO and infrastructure already in place, we were fortunate to be more fund-ready early on. Having said that, even with our senior team being complete well before we went to market, we had to be quite driven and disciplined in balancing fundraising, sourcing and execution. Things have been very busy after raising the fund (which closed in October 2016), and we are off to a good start. We’re about to close our fifth platform transaction just 20 months into the new fund, and we’re buying niche market leaders with proprietary capabilities at an average EBITDA multiple of 5.7x. We’ve deployed over 50% of our capital in about a third of the investment period. Many existing and potential LPs appear to be excited about our pace.


How were existing relationships important to your fundraising?


Laurence: When interacting with potential LPs, you have to keep in mind that there are lots of private equity firms out there. You have to differentiate yourself and be patient in telling your story to potential investors. We were fortunate and delighted to have a successful raise for Fund I, but there were a number of potential LPs that decided not to participate in our first fund. We still have very positive conversations with them, and they keep track of our progress and are interested to hear how the firm is developing with an eye towards upcoming funds. Regarding personal relationships, you have to leverage any and all relationships that you have, whether it’s on the LP side or with management teams or intermediaries and deal sourcing—relationships for all these aspects of your business are critically important. When it comes to LPs, personal relationships are a great way to get in the door, but ultimately you’ll be judged on your merits and your track record.


How have you become known as a firm with whom management teams want to partner?


Laurence: One of our strengths is that we listen to management teams. We don’t look to impose a solution on any given transaction. We listen first—a lot of these companies are founder-owned or multi-generational, so we need to understand what the sellers are looking for. We need to make sure it’s a cultural fit and visions are aligned. One recent example is Earthlite Massage Tables, which had founding shareholders that were looking to retire and exit completely. They had hired a strong management team that was excited to partner with institutional capital and re-invest more than 50% of their transaction proceeds. It comes down to trying to find out and really listen to the needs of the sellers. In addition, we then work with management teams to bring some of the best practices we’ve seen from other businesses to theirs. Those can be extremely helpful in helping our portfolio companies grow their top line. Something else that is very attractive to sellers is showing them the returns that our other management teams have achieved from partnering and investing alongside Branford. We always encourage sellers and management teams to talk to our other CEOs and management team to hear what it’s like to work with us and how they have done in our prior investments. That’s always quite compelling for folks to hear about.


Click here to download Pitchbook – First-Time Funds Q2 2018 (PDF).

6/4/18

Branford Castle Acquires Drew Foam Companies, Inc.

Southeast regional leading fabricator of foam packaging and building products


New York, June 4, 2018 – Branford Castle, a New York-based private equity firm, today announced the acquisition of Drew Foam Companies, Inc., a leading provider of custom-fabricated expanded polystyrene foam (“EPS”) products serving the packaging, building products and consumer end-markets, primarily in the Southeastern United States. The acquisition is the 5th for the Branford Castle Fund which had its final close in late 2016.


Branford Castle is purchasing the company from Gladstone Investment Corporation, a publicly funded traded BDC, key management members and a co-investor. “The fund is moving quickly to put capital to work. We are delighted with the companies we have purchased and their performance to date,” said Laurence Lederer, Managing Director, of Branford Castle Partners. “We are especially excited to partner with Drew Foam’s CEO, Bill Givens, and the rest of his team on this transaction.”


Headquartered in Monticello, Arkansas, the company has three operating facilities, in Monticello, Portland, Tennessee, and Anderson, South Carolina. The company, founded in 1965, offers quick turnaround for customers who often demand just-in-time (“JIT”) delivery for products. Most competing EPS suppliers require long production (high-volume) runs to create manufacturing efficiencies. Drew offers customers flexibility. It processes more than 100 different orders per day, with an estimated 80% of its orders manufactured and shipped on company trucks within 24 hours of receipt and 95% shipped within 48 hours. Drew has more than 700 customers, with no single customer accounting for more than 5% of sales, and its customer retention rate is in excess of 97%.


“Drew’s logistical capabilities and ability to deliver low-volume custom products on a just-in-time basis are unique competitive advantages,” said John S. Castle, President and CEO, of Branford Castle Partners. “We are looking forward to enhancing the company’s packaging-industry growth, extending its customer base, innovating new products and entering new regions.”


The purchase of Drew follows Branford’s acquisition of Vitrek, a leading manufacturer of sophisticated electrical safety test and measurement equipment; Surface Preparation Technologies, the leader in cutting rumble strips for roadway safety; Earthlite Massage Tables, the world’s No. 1 brand of products for the spa, massage and wellness industries; and Continuum Foot Spas, LLC, a leader in the premium pedicure chair market and a highly complementary bolt-on acquisition for Earthlite.


Branford Castle was advised by its legal counsel, Akerman LLP. Terms of the transaction were not disclosed. TCF Capital Funding provided senior debt financing and Siguler Guff & Company, LP provided mezzanine debt financing and made an equity co-investment for the transaction.

1/9/18

Branford Castle Acquires Vitrek, LLC


New York, January 9, 2018 – Branford Castle, a New York-based private equity firm, today announced the acquisition of Vitrek, LLC, a leading manufacturer of highly sophisticated electrical safety test and measurement equipment based near San Diego, CA. The acquisition is the fourth for its fund that closed in late 2016.


“We are moving rapidly to deploy our investors’ capital, and Vitrek represents an exciting growth opportunity,” said David Castle, Managing Partner of Branford Castle Partners. “We are especially pleased to be partnering again with Don Millstein, who is taking over as Operating Executive and Chairman of Vitrek. Don previously partnered with Branford Castle as President of E-Mon, a leading manufacturer of electrical sub-metering equipment that Branford sold for an 11x return.”


The transaction follows Branford’s acquisition of Surface Preparation Technologies, the United States’ leader in cutting rumble strips for roadway safety, Earthlite Massage Tables, the world’s No. 1 brand of products for the spa, massage and wellness industries, and Continuum Foot Spas, LLC, a leader in the premium pedicure chair market and a highly complementary bolt-on acquisition for Earthlite.


Vitrek, founded in 1990, is known for its line of high potential (hipot) testers, high voltage meters and power analyzers. These products measure electrical safety, power consumption, and other characteristics of electricity in the context of the development, testing and manufacture of a wide variety of consumer and industrial products. Vitrek has significant US market share with most of its competitors manufacturing overseas.


Kevin Clark, Co-founder and Chief Executive Officer of Vitrek, said the company serves a diverse group of customers, including premier brands in the electrical, electronics, medical, cable, power, lighting and consumer appliance sectors. “Customers use our equipment to test their electrical products during the development stage and also in mass production. Vitrek’s power analyzers aid design engineers in improving the power efficiency of their products. At the mass production stage, Vitrek’s electrical safety testers confirm that end-users will be protected from “electrical shock” when using that product,” he said.


Millstein has created a strategic plan to grow Vitrek through multiple avenues. “We plan to establish a comprehensive sales and marketing program to begin to access or further penetrate growth markets and to formalize OEM program opportunities,” he said. “We also want to expand the product line and launch an electronic component distribution program.” Millstein will take over as CEO when Clark retires after an appropriate transition period.


Laurence Lederer, Managing Director of Branford Castle, said, “Vitrek continues our focus on acquiring companies that have strong organic growth and bolt-on acquisition growth potential. We see exceptional growth opportunities for Vitrek in 2018 and beyond.” Terms of the transaction were not disclosed.


Led by John S. Castle and David Castle, Branford Castle is a recently formed lower-middle market investment fund. Between 1986 and 2016, Branford operated as an award-winning family office. Building from its significant investment successes, Branford recently raised its first fund open to outside investors. With each new investment, Branford builds on its 30+ year history of helping to grow businesses. The firm typically makes control investments in companies with less than $15 million of EBITDA and a leadership position in a niche industry. Branford is particularly keen on the strong relationships it develops with its portfolio company managers.


Branford has particular expertise in consumer products and services, commercial distribution, business services and logistics. Branford also brings the expertise from its affiliation with the management at the leading middle-market investment firm Castle Harlan.


For more information, contact us.

9/14/17

Branford Castle’s Portfolio Company Earthlite Acquires Continuum Footspas


New York, September 11, 2017 – Branford Castle Partners, LP (“Branford Castle”), a New York City-based private equity firm, today announced that its portfolio company, Earthlite LLC (“Earthlite”), has acquired Continuum Footspas, LLC (“Continuum”) from Joe Galati and the other founders of the company.


Based in New Berlin, WI, Continuum is a leader in the premium pedicure chair market.  The Company’s end-customers include many international luxury hotel chains and high-end day spas.  Continuum was founded by the inventors of the modern pedicure chair.


“The acquisition of Continuum strengthens Earthlite’s position as a global leader in the health and wellness equipment market,” said Laurence Lederer, Managing Director at Branford Castle.  “We look forward to continuing to support Earthlite’s management team as they grow the company organically and through other add-on acquisitions.”


“We are delighted to add this leading brand to Earthlite’s already strong pedicure product offering,” said Earthlite CEO, Jim Chenevey.  “We have long admired Continuum’s quality products and reputation for excellent service, and look forward to continuing to build this great brand.”


Branford Castle was advised by its legal counsel, Akerman LLP.  TCF Capital Funding provided financing for the transaction, with the company’s mezzanine lender Siguler Guff supporting the transaction as well.  Terms of the transaction were not disclosed. 

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.