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Audax Private Equity steps up for Revolution Dancewear

  • PE unit of PNC Financial Services spun out in 2011
  • PNC Equity Partners II LP raised $272 million in 2007
  • Incline Equity Fund III collected $301 million in 2013

Revolution Dancewear, a provider of tutus and tap shoes, has waltzed its way to a new private equity owner.

Audax Private Equity
said June 28 that it acquired the Niles, Illinois, supplier of costumes and apparel, including leotards, ballet shoes and tights, to more than 12,000 dance-studio customers.

Terms weren’t disclosed. Incline Equity Partners and MTN Capital Partners were the sellers.

Audax Private Equity is part of Audax Group, which manages more than $12 billion through its PE, mezzanine and private senior debt units.

Audax PE focuses on sectors including energy, healthcare, as well as business and consumer services. It typically invests in companies with Ebitda of $8 million to $50 million or an enterprise value of $50 million to $400 million.

Asked about the investment, Geoffrey Rehnert, Audax’s co-CEO, said by email that “the industry provides an opportunity for us to build a leading platform in a growing market.”

Audax is using its fifth PE fund, which closed on $2.25 billion in 2015, to acquire Revolution, Rehnert said.

Audax PE has been active this year. The firm sold Senneca Holdings to Kohlberg & Co in May and Wheel Pros to Clearlake Capital in April.

Incline Equity is the Pittsburgh lower-middle-market firm focused on distribution, specialized light manufacturing and business services. It targets companies with enterprise values of $50 million to $300 million.

The investment in Revolution came from an Incline predecessor fund, an executive said.

Due to the Volcker Rule, the PE unit of PNC Financial Services spun out in 2011 to form Incline Equity.

It was PNC Equity Partners II LP, which raised $272 million, that invested in Revolution in 2010, executives said. The sale to Audax marks the final realization of PNC Equity Partners II, Incline said in a statement.

The firm’s third fund was the first it raised after leaving PNC. Incline Equity Partners III LP collected $301 million in 2013.

Incline in January 2017 closed its fourth fund on $601.1 million.

The Revolution sale is also a win for MTN Capital, an independent sponsor that invested in Revolution in 2010.

MTN, New York, has access to more than $500 million in equity capital. In January, MTN and Argosy Private Equity acquired a controlling stake in Rita’s Franchise Co, a provider of Italian ice.

Robert W. Baird provided financial advice to Revolution Dancewear, while Cohen & Grigsby was legal counsel. Kirkland & Ellis was counsel to Audax

Action Item: Contact Joe Sclafani, Revolution’s CEO, at +1 847-779-8984