SunTx Capital seeks investor for Carolina Beverage

SunTx Capital Partners, which is out fundraising, is exploring options for Carolina Beverage Group, sources said.

The Dallas middle-market firm is considering a “host of options” for Carolina Beverage, including a sale, a partial exit or taking on an equity partner, one of the sources said.

SunTx has hired Cascadia Capital to advise on the process, people said. An executive for Cascadia confirmed that the Seattle investment bank is working as a financial adviser to Carolina Beverage but declined further comment.

Management presentations for Carolina Beverage have begun, people said.

Founded in 1997 as a brewery, Carolina Beverage is a beverage co-packer serving the energy-drinks category. The company produces $30 million EBITDA, people said. One source said Carolina Beverage is expected to sell for mid-to-high single-digit EBITDA, while another said the company was expected to command more than 10x.

SunTx acquired a majority stake in Carolina Beverage in 2010. How much the firm invested is unclear. In 2013, the company issued a $130 million bond that it used to fund a “large cash distribution” to its stockholders, including SunTx, Moody’s reported. Carolina Beverage produced about $93 million in sales in 2014, Moody’s said.

SunTx is marketing its third fund, which had collected about $94.7 million as of January, Buyouts reported, citing an SEC filing. Six Point Partners is placement agent for the fund.

Earlier this year, SunTx completed a transaction to provide liquidity to LPs in its 16-year-old debut fund and growth capital to three remaining portfolio companies, Buyouts said.

SunTx invests in companies with annual EBITDA of at least $10 million. Sectors include communications, industrial and consumer goods, insurance and financial services, and energy services. The buyout shop does not invest in oil and gas exploration, real estate or technology.

SunTx has been active this year. In September, it bought a majority of Freedom Truck Finance, while the firm, along with Prudential Capital Partners, invested $125 million growth equity into Interface Security Systems in August.

Executives for Six Point and Carolina Beverage declined comment.

Action Item: Contact CEO Andy Kerner at +1 704-799-2337

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