M&A Deal Summary

Five Points Capital, Capital Southwest, Pleasant Bay Capital Partners, Crescendo Capital Partners and Reynolda Equity Partners Acquire GrammaTech

On November 11, 2019, private equity firm Five Points Capital, business development company Capital Southwest, private equity firm Pleasant Bay Capital Partners, private equity firm Crescendo Capital Partners and private equity firm Reynolda Equity Partners acquired software company GrammaTech

Acquisition Highlights
  • This is Five Points Capital’s 1st, Capital Southwest’s 4th, Pleasant Bay Capital Partners’ 3rd, Crescendo Capital Partners’ 1st and Reynolda Equity Partners’ 1st transaction in the Software sector.
  • This is Five Points Capital’s 76th, Capital Southwest’s 38th, Pleasant Bay Capital Partners’ 9th, Crescendo Capital Partners’ 13th and Reynolda Equity Partners’ 1st transaction in the United States.
  • This is Five Points Capital’s 4th, Capital Southwest’s 2nd, Pleasant Bay Capital Partners’ 2nd, Crescendo Capital Partners’ 1st and Reynolda Equity Partners’ 1st transaction in New York.

M&A Deal Summary
Date 2019-11-11
Target GrammaTech
Sector Software
Buyer(s) Five Points Capital
Capital Southwest
Pleasant Bay Capital Partners
Crescendo Capital Partners
Reynolda Equity Partners
Deal Type Recapitalization
Advisor(s) AGC Partners (Financial)

Target

GrammaTech

Ithaca, New York, United States
GrammaTech is a provider of cybersecurity solutions for government and commercial clients. GrammaTech’s software enables users to quickly scan code for vulnerabilities that cause breaches, system failures or poor reliability. GrammaTech’s expertise in application security testing has been built by decades of cutting-edge research for the national security community and other US government agencies. GrammaTech was formed in 1988 and is based in Ithaca, New York.

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Buyer(S) 5

Buyer

Five Points Capital

Winston-Salem, North Carolina, United States

Investor Investor Investor Investor Investor

Category Private Equity Firm
Founded 1997
PE ASSETS 1.3B USD
Size Large
Type Sector Agnostic
DESCRIPTION

Five Points Capital makes both direct private equity and junior capital investments in US-based middle-market companies. Five Points prefers control based investments and will consider opportunities in a variety of industries. For both equity and mezzanine investments, the Firm looks to commit $5 to $25 million of capital in businesses with at least $10 million in sales and $3 million of EBITDA. Five Points Capital was formerly known as BB&T Capital Partners and re-branded in 2015. The Firm was established in 1997 and is based in Winston-Salem, North Carolina.

DEAL STATS #
Overall 76 of 89
Sector (Software) 1 of 3
Type (Recapitalization) 20 of 21
State (New York) 4 of 4
Country (United States) 76 of 89
Year (2019) 6 of 6
PREVIOUS DEAL
DATE TARGET DEAL TYPE VALUE
2019-11-06 BrandFX

Fort Worth, Texas, United States

BrandFX LLC is a manufacturer and seller of composite utility truck bodies. Products include service bodies designed for smaller utility trucks, line bodies designed for medium-sized utility trucks as well as toppers and inserts designed primarily for compact utility trucks.

Sell -
FOLLOWING DEAL
DATE TARGET DEAL TYPE VALUE
2019-11-12 ASPEQ Heating Group

St. Louis, Mississippi, United States

ASPEQ Heating Group is a provider of custom-configured electric heating and thermal management products to the industrial, commercial, military, marine, and transportation markets. ASPEQ serves a highly diversified customer base and provides over 30 distinct product categories, including immersion and circulation heaters, duct heaters, tubular elements, unit and comfort heaters, and explosion-proof heaters, among others, as well as integrated controls and spare parts. Products are marketed through a multi-channel approach under the longstanding and well-known INDEECO, Heatrex, AccuTherm, and Brasch brands. ASPEQ Heating Group was formed in 2008 and is based in St. Louis, Mississippi.

Sell -
Buyer

Capital Southwest

Investor Investor Investor Investor Investor

Category Business Development Company
Founded 1961
Size Middle-Market
Type Sector Agnostic
DESCRIPTION

Capital Southwest Corp. is a credit focused business development company focused on providing financing to profitable, mid-sized companies throughout the US. The Firm doesn't have any sector preferences and will consider a variety of investment structures. Capital Southwest Corp. was originally established in 1961 and is headquartered in Dallas, Texas.

DEAL STATS #
Overall 39 of 48
Sector (Software) 4 of 5
Type (Recapitalization) 7 of 8
State (New York) 2 of 2
Country (United States) 38 of 47
Year (2019) 6 of 8
PREVIOUS DEAL
DATE TARGET DEAL TYPE VALUE
2019-07-26 Trafera

Saint Paul, Minnesota, United States

Trafera is a provider of educational technology to K-12 schools and a top K-12 focused reseller of Google Chrome devices. Trafera offers a broad range of additional hardware and software solutions that support better outcomes through technology and also offers a robust set of services including deployment and warranty support. Trafera is based in Saint Paul, Minnesota.

Buy -
FOLLOWING DEAL
DATE TARGET DEAL TYPE VALUE
2019-11-20 Relevant Solutions

Houston, Texas, United States

Relevant Solutions is a compressed, oil-free air rental provider to end-users in a refinery, petrochemical, power generation, food and beverage, pharmaceutical, plastics, and other industrial settings. Relevant’s fleet can address a full spectrum of pressure and flow needs for its customers, which often operate in environments in which tailored solutions for oil-free air are required. Relevant Solutions was founded in 1984 and is based in Houston, Texas.

Buy -
Buyer

Pleasant Bay Capital Partners

Investor Investor

Category Private Equity Firm
Founded 2012
Size Small
Type Sector Agnostic
DESCRIPTION

Pleasant Bay Capital Partners is a merchant bank focused on investments in profitable, lower middle-market companies in the healthcare, technology, business services, consumer, and industrial products/services sectors. Prospective transaction situations include buyouts, growth capital financings, recapitalizations, shareholder liquidity needs, and buyouts. Pleasant Bay Capital Partners was established in 2012 and is based in Boston, Massachusetts.

DEAL STATS #
Overall 9 of 9
Sector (Software) 3 of 3
Type (Recapitalization) 2 of 2
State (New York) 2 of 2
Country (United States) 9 of 9
Year (2019) 1 of 1
PREVIOUS DEAL
DATE TARGET DEAL TYPE VALUE
2019-10-03 Memorial MRI and Diagnostic

Houston, Texas, United States

Memorial MRI & Diagnostic is a provider of outpatient diagnostic imaging services in the Houston market. It is a provider of diagnostic imaging services including MRI, CT or CAT scan, nuclear medicine, ultrasound, digital X-ray, digital mammography, dual energy X-ray or DEXA, pain management and other radiology services. Memorial MRI and Diagnostic is based in Houston, Texas.

Sell -
FOLLOWING DEAL
DATE TARGET DEAL TYPE VALUE
2020-01-06 MedTouch

Cambridge, Massachusetts, United States

MedTouch LLC is a digital healthcare marketing and technology consultancy. MedTouch was founded in 2004 and is based in Cambridge, Massachusetts.

Sell -
Buyer

Crescendo Capital Partners

Centennial, Colorado, United States

Investor Investor

Category Private Equity Firm
PE ASSETS 600M USD
Size Middle-Market
Type Sector Agnostic
DESCRIPTION

Crescendo Capital Partners is a small private equity group that invests in growing, lower middle market businesses operating in or around Colorado. Crescendo looks for businesses valued less than $50 million, and with strong management, perhaps with an owner operator looking to take the company to the 'next level'. Crescendo also likes businesses operating in fragmented markets. Sectors of interest include software, services, hardware, electronics, basic manufacturing, and medical products. Crescendo Capital is based in Centennial, Colorado.

DEAL STATS #
Overall 13 of 17
Sector (Software) 1 of 1
Type (Recapitalization) 1 of 1
State (New York) 1 of 1
Country (United States) 13 of 17
Year (2019) 1 of 1
PREVIOUS DEAL
DATE TARGET DEAL TYPE VALUE
2018-07-01 P3 Services

Auburn, Washington, United States

P3 Services is a provider of plumbing installation and maintenance and repair services to the multi-family, light commercial, and single-family end markets with operations in Austin, Charlotte, Dallas, Houston, San Antonio, and Seattle. P3 Services was founded in 1985 and is based in Auburn, Washington.

Buy -
FOLLOWING DEAL
DATE TARGET DEAL TYPE VALUE
2020-12-08 Lor-Mar Mechanical Services

Pennsauken, New Jersey, United States

Lor-Mar Mechanical Services is an HVAC mechanical contractor for commercial and industrial customers. Lor-Mar has two divisions: Construction and Service. Construction provides HVAC, Plumbing and Sheet Metal Design and Installation. Service provides HVAC and Plumbing Maintenance, Repair, and Installation. Lor-Mar Mechanical Services was founded in 1997 and is based in Pennsauken, New Jersey.

Buy -
Buyer

Reynolda Equity Partners

Investor Investor Investor Investor Investor

Category Private Equity Firm
Founded 1997
PE ASSETS 712M USD
Size Middle-Market
Type Sector Agnostic
DESCRIPTION

Reynolda Equity Partners is a lower middle-market private equity firm focused on acquiring and investing in business services across the US. The Firm looks for companies with $2 to $8 million of EBITDA and valued between $20 and $100 million. Prospective transaction situations include recapitalizations, buyouts, and buy-and-builds, and corproate divestitures. Reynolda Equity Partners was established in 1997 and is based in Winston-Salem, North Carolina.

DEAL STATS #
Overall 1 of 6
Sector (Software) 1 of 1
Type (Recapitalization) 1 of 1
State (New York) 1 of 1
Country (United States) 1 of 6
Year (2019) 1 of 2
FOLLOWING DEAL
DATE TARGET DEAL TYPE VALUE
2019-12-01 Specialty Appliances

Cumming, Georgia, United States

Specialty Appliances is a digitally-focused orthodontic laboratory, manufacturing a variety of orthodontic appliances, including Herbst appliances, metals and expanders, retainers, indirect bonding and clear aligners, among others. Specialty Appliances was founded in 1981 and is based in Cumming, Georgia.

Buy -
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