Good morning dealmakers, thank goodness it’s Friday!
It’s Obey Martin Manayiti here with the newsletter, and as our norm, we are capping the week with a deal trend that caught my attention recently. Today we have seven industrial manufacturing focused deals, followed by Yellow Wood Partners’ carve-out of Unilever’s Suave, a personal care product brand, and we will close out with a mini profile from our annual Women in Private Equity feature package.
But first let’s look at this morning’s deal news.
CenterOak Partners-backed Turf Masters Brands announced this morning that it has acquired North Carolina-based Fairway Green, a provider of lawn care as well as tree and shrub care services. Roswell, Georgia-based Turf Masters is a provider of recurring residential lawn care services.
In our past news coverage, we’ve heard from other PE firms that the recurring revenues of home maintenance services attract them to invest in the sector. Plus, with lingering uncertainty in the economy, many people are once again seeking to make the most of their homes instead of moving.
Industrial manufacturing. Today we are looking at seven deals announced so far this year that cut across a variety of end-markets such as aerospace and defense, mining, agriculture, automotive, utilities, power generation, electronic and tooling.
Among the factors pushing the investments is rising local demand, a byproduct of the onshoring/nearshoring trends sparked by the breakdown of the global supply chain during the covid pandemic. Some of the machine shops are family owned and as demand grows, the founders are seeking to partner with bigger and well-resourced platforms to increase efficiency and, possibly, weather the tight macroeconomic environment.
In February, CORE Industrial Partners portfolio company Cadrex Manufacturing Solutions was one the most active companies in this space.
Cadrex, a Romeoville, Illinois-headquartered firm, late last month acquired D&R Machine Company, a Southampton, Pennsylvania-based provider of CNC precision-machining solutions for the aerospace and defense market.
Founded in 1971, D&R Machine specializes in high-complexity CNC milling, CNC turning and assembly for aerospace and defense through a variety of applications, including auxiliary power units, starter generators, structures, rotor systems and control systems.
I caught up with CORE founder and managing partner John May, who stressed some of the factors that are drawing him to do more acquisitions in this area. He said the domestic precision manufacturing market has compelling long-term growth trends.
“As the Industry 4.0 revolution accelerates and onshoring/nearshoring trends increasingly stress our domestic manufacturing capacity, smaller manufacturers are seeking to partner with growth investors to meet demand and sustain long-term growth,” said May. “These partnerships help accelerate innovation and support the development of a competitive cost structure through automation and labor base up-skilling, ultimately creating long-term value here in North America.”
Clayton, Dubilier & Rice and Greenbriar Equity Group acquired and merged Whitcraft Group and Paradigm Precision, forming a new company called Pursuit Aerospace in February.
By combining these two companies, Pursuit Aerospace created a manufacturer of tight-tolerance components used in commercial and military aircraft engines.
With Whitcraft’s and Paradigm’s complementary exposures across platforms, manufacturing capabilities, geographies, skill sets and leadership teams, Pursuit Aerospace will be even more well positioned to support its original equipment manufacturer customers around the world and pursue numerous growth opportunities, said the firms in a statement.
Personal Care. Unilever’s Suave, a personal care brand of hair and beauty products, is getting a new home for the North American region in the form of Boston-based Yellow Wood Partners, my colleague Georgina Tzanetos reported. She sat down with the firm’s managing partner Dana Schmaltz to discuss the transaction and his outlook for the legacy brand and the sector overall.
What makes this such an attractive investment?
Twenty-five percent of American households have a Suave product on their shelves. The brand awareness is among the highest of its peers in the hair care and body wash categories, the awareness to trial is extremely high and the trial to repeat usage is extremely high. Those are metrics we at Yellow Wood look for in our brands.
Zest, another legacy hygiene and cosmetics brand, was acquired by a Brynwood portfolio company a while back from Procter & Gamble and is now discontinued. How will this be different?
Number one is selecting the brand that works with your operating strategy. We tend to focus on those brands that have consumer metrics that we think are strong enough to survive outside of a large consumer packaged goods (CPG) company. We then implement our operating strategy. We had to replicate a production and distributions network for over 250 million units that are sold annually. If you’re not operationally focused and in constant partnerships with packers and other providers in the industry, it’s tough to do that. Big CPG companies tend to do best with large global brands, where Suave, although a large brand in the US, is only really in the US. I think at the value price that Suave is and that it was geographically limited in its distribution, as Unilever is working through their portfolio you can see where Suave wouldn’t fit.
Women in PE. Continuing with our profiles from the 2023 class, today we are featuring Carlyle’s Anna Tye, who as an MD and partner on the technology investing team and with a 14-year career at the PE giant, is proof that perseverance and strategic positioning pays off.
Technology is Carlyle’s largest sector by capital deployed – and Tye is the most senior woman on the global team and amongst the most senior women across Carlyle’s entire global private equity platform.
Starting her career at Morgan Stanley’s hedge fund division, she gained a passion for working collaboratively alongside management teams to drive value creation. This eventually led her to private equity and then Carlyle.
Since joining in 2009, Tye has led or been a key contributor to Carlyle’s investments in YipitData, Abrigo and ION Group, to name a few. She focuses on buyout and growth equity investments in enterprise software, financial technology and tech-enabled services businesses.
The technology sector is something she became interested in early on in her career.
“There is no industry like it – constantly growing, evolving, and impacting companies across sectors and geographies. The opportunities are limitless. I feel very fortunate to have built my career in such a dynamic sector that is only growing in importance.”
That’s all from me – have a nice weekend and MK will be back with you on Monday.