Castle Harlan still active as Branford Castle markets for second fund

Four years after Castle Harlan was expected to close its doors, the New York private equity firm is still doing deals, says CEO.

Bamburgh Castle during the day

Four years after Castle Harlan was expected to close its doors, the New York private equity firm is still doing deals.

Castle Harlan operates as an independent sponsor, said John K. Castle, chairman and CEO. The firm is not seeking a new fund right now, but it’s still active, he said.

He pointed to Sunless. In August, Castle Harlan teamed with Branford Castle to buy the maker and marketer of spray tanning equipment. Riverside Co was the seller.

Castle Harlan sold Gold Star Foods in October to Highview Capital. Financial terms weren’t disclosed, but Gold Star sold for 9x Ebitda, Buyouts learned. Gold Star was an investment from Castle’s Fund V, which closed on $800 million in 2010. Fund IV collected $1.16 billion in 2003.

In 2018, Castle Harlan acquired the North American production equipment manufacturing assets of Exterran Corp. “Reports of our demise were greatly exaggerated,” Castle said with a laugh.

Fortune reported in 2015 that Castle Harlan, one of the oldest private equity firms, was winding down. Buyouts said that the New York PE firm had given up trying to raise its sixth fund.

The media reports caused many to believe Castle Harlan would be coming to an end. The reality was different. Castle Harlan lost several employees in 2015 but kept doing deals, Castle said. “We’ve been in business 50 years,” he said.

Castle Harlan has five investments left—Sunless, Shelf Drilling, Caribbean Restaurants LLC, Titan Production Equipment and Tensar Corp—from its fourth and fifth funds. Caribbean is a Fund IV deal while the rest come from the fifth pool, a spokesman said.

Launched in 1987, Castle Harlan can invest anywhere from $30 million equity to $100 million equity. The firm is most active in the consumer, industrial and energy sectors.

His family office, Branford Castle, is now a private equity firm. His sons John S. (president and CEO) and David A. Castle (managing partner) lead Branford Castle. The New York firm, a generalist, invests in companies that have less than $15 million Ebitda.

Branford is fundraising for its second pool. The firm has so far raised $116 million for Branford Castle Fund II, sources said. The fund has a $250 million target on a $350 million hard cap, sources said.

Branford this month sold Surface Preparation Technologies to Dominus Capital. It acquired Pulse Veterinary Technologies in September and, in August, it bought ABC Industries. Drew Foam Cos, a Branford portfolio company, today announced its buy of Davis Core & Pad.

Action Item: Here’s the SEC filing for Branford Castle’s second fund.