Bengur Bryan Announces Closing of Andlauer Healthcare Group’s Acquisition of Boyle Transportation

We are pleased to announce that Andlauer Healthcare Group (AHG) closed its previously announced acquisition of Boyle Transportation. Bengur Bryan acted as the exclusive financial adviser to Boyle Transportation in its announced sale to AHG.

Boyle Transportation tombstone

The purchase price for Boyle Transportation was approximately $80 million, subject to customary purchase price adjustments, and was satisfied through the issuance of 522,116 subordinated voting shares and cash of approximately $60 million.

Boyle Transportation provides specialized transportation services to clients in the life sciences and government/defense sectors. Boyle Transportation joins AHG’s comprehensive platform of dedicated healthcare supply chain solutions and continues to be led by the existing leadership team.

“We’re proud to join the Andlauer team,” stated Andrew Boyle and Marc Boyle, Co-Presidents of Boyle Transportation. “As part of the highly regarded AHG platform, we are confident that this strategic move will help Boyle Transportation and AHG deliver a broader suite of services to our valuable clients and apply our expertise on a greater scale.”

“We are pleased that we could utilize our deep industry knowledge to maximize value for Boyle Transportation,” said Scott Bass, Managing Director of Bengur Bryan. “We look forward to seeing the continued growth of Boyle Transportation as a part of AHG.”

Bengur Bryan Advises Management of Boyle Transportation in its Sale to Andlauer Healthcare Group

text reads Boyle We deliver security

Bengur Bryan, a leading investment banking firm that provides merger and acquisition services, private placements of equity and debt, and financial advisory services, announced today that the firm acted as the exclusive financial adviser to Boyle Transportation in its announced sale to the Andlauer Healthcare Group (AHG) for approximately $80 million, subject to customary purchase price adjustments, of which $60 million of the purchase price will be payable in cash and $20 million will be satisfied through the issuance of AHG subordinate voting shares to the sellers.

Boyle Transportation provides specialized transportation services to clients in the life sciences and government/defense sectors. Boyle Transportation adheres to stringent quality and security standards, employs highly trained and dedicated professionals, continually invests in advanced technology and equipment, and has an expansive reach across the United States.

The company was recently named the “Best Overall Winners” for the second year in a row in the Best Fleets to Drive For®, an annual program dedicated to uncovering the best workplaces in the North American trucking industry, produced by the Carriers Edge and Truckload Carriers Association. Boyle Transportation will join AHG’s comprehensive platform of dedicated healthcare supply chain solutions and continue to be led by the current executive leadership team.

“We are thrilled to be welcoming the Boyle Transportation team to Andlauer Healthcare Group,” stated Michael Andlauer, Chief Executive Officer of AHG. “Boyle is a leader in the temperature-sensitive life sciences sector and brings complementary security and visibility capabilities to the defence sector. Boyle has a strong commitment to customer-focused care and a people-first approach, which are core values of the Andlauer Healthcare Group.”

“We’re excited to join the Andlauer team,” stated Andrew Boyle and Marc Boyle, Co-Presidents of Boyle Transportation. “As part of the highly regarded AHG platform, we will be able to offer a broader suite of services to our valuable clients. We are confident that this strategic move will help Boyle Transportation continue to be the provider of choice to clients and the employer of choice to transportation and logistics professionals in the U.S. The Bengur Bryan team was an integral part of the entire process, providing comprehensive transaction advice. They focused on achieving the best deal structure and strategic outcome for Boyle Transportation.”

“We are proud to partner with Andrew, Marc, and the Boyle Transportation team to bring this deal to fruition,” said Scott Bass, Managing Director of Bengur Bryan. “This is the 30th deal we’ve completed in the transportation and logistics industry, and we are pleased that we could utilize our deep industry knowledge to provide insights and maximize value for Boyle Transportation.”

Bengur Bryan Advises Three Wire Systems, LLC on Growth Capital Financing

Three Wire Systems logo

Bengur Bryan provided financial and strategic advisory services to Three Wire Systems, LLC (“Three Wire” and “Company”) as part of a growth capital financing. Three Wire engaged Bengur Bryan to provide financial and strategic analysis for the Company, including the evaluation and modeling of multiple growth capital financing proposals to support the projected growth of the business.

Founded in 2006, Three Wire Systems, LLC is the leader in innovative and efficient technology solutions for government agencies and large enterprise corporations looking to modernize with innovative and efficient technology solutions. Three Wire designs solutions to support business goals and deliver superior results in a cost-efficient manner. Three Wire’s MyAdvisor® division provides holistic care to individuals and families, with access to one-on-one care coordination sessions in behavioral health, wellness, navigational advocacy, financial literacy, and career development. This includes the VetAdvisor® program, an American Association of Suicidology (AAS) accredited member, with over a decade of experience in health and wellness serving military veterans, active-duty service members, national guardsmen, and reservists.

“From the moment we engaged Bengur Bryan, we knew we made the right decision. Their strategic instincts and financial acumen, combined with their knowledge of the government services sector, proved to be incredibly valuable to our company,” commented Three Wire Chief Executive Officer Greg Feldman. “The structural concepts that Bengur Bryan laid out provided us with insight on how to best structure our growth capital.”

Observations from the Field

With the loosening of pandemic restrictions, we have been on the road visiting our clients, prospects and other market participants. Here are our quick takes on the hot button issues business owners are facing.

Potential Increases in Capital Gains Rates

We advise business owners routinely on the economic, operational and emotional aspects of selling their closely held or family business. There are many reasons to sell a business, but after-tax proceeds are generally at the top of the list for desired results.Among several proposed tax increases by the Biden Administration is an increase in the federal capital gains tax rate from 23.8% to 43.4%. Not surprisingly, business owners who were considering selling their business in the next few years are now focused on accomplishing that before these proposed capital gains tax rates go up. This tax proposal could translate to over a 25% negative impact on after-tax proceeds for a business owner—a business that often represents your life’s work. If you’re a business owner considering the sale of your business in the coming years, it is worth contemplating the myriad of risks associated with successfully operating a business for the additional years necessary to generate the sufficient earnings to breakeven if capital gains tax is increased—even if any increased rate is lower than 43.4%.

Although the Biden Administration’s tax proposal provides that the increase in capital gains tax will be retroactive to April 2021, our sources in Washington say that such a retroactive tax increase is highly unlikely. That said, a capital gains tax increase could go into effect beginning in 2022. To take advantage of current capital gains tax rates, business owners who are thinking of selling should start the process now to complete a transaction by the end of 2021. There are alternatives to a control sale of a business if you want to hedge your bets, which we would be happy to discuss with you.

How is the Market?

Another critical consideration for business owners looking to sell is matching their desired timing with the market cycle of valuation levels, interested buyers and earnings. Coming out of the pandemic we are seeing a “Double Rainbow” of high valuations (at or above pre-pandemic levels) and a continuing increase in dry powder among private equity investors looking for quality investment opportunities. The private equity market may not be your desired exit, but it generally serves to set the clearing price for sale transactions. As to earnings, many companies managed through the pandemic with limited earnings loss (even as many benefited), still buyers are being receptive to demonstrable pandemic add-backs.

chart Private Equity AUM Should Rise Sharply After 2021
Source: DCFS; The Deloitte Center for Financial Services analysis of Deloitte Economics, Preqin, S&P Capital IQ, IMF data, CBO; Congressional Budget Office and Financial Times
chart Private Equity Transactions Enterprise Value and Deals
Note: 2021 data are annualized. Source: GF Data®

Is Inflation Transitory and What Will Happen to Interest Rates?

Inflation is getting a lot of attention from business owners and market participants because everything seems to have gone up in price over the last 12 months. It has become harder to source supplies and products, including building materials, computer chips, rental cars, not to mention employees.

There are mixed views as to whether inflation will be a transitory phenomenon, but our consensus is that inflation is mostly pandemic induced and will abate as supply and demand come back into balance. In fact, our clients are noting that lumber prices are already coming back to pre-pandemic levels. Most business owners we talk to are doing everything possible to manage their rapid increase in costs; we also hear of many projects and purchases that don’t make economic sense at current prices being delayed or canceled. We expect this rational behavior, and the course of the steady beat of technological driven efficiency and the reduction in government stimulus payments, to calm inflationary pressures without the need for the Federal Reserve to raise interest rates aggressively.

In these times of political and economic uncertainty as we emerge from the pandemic, and with financial assets including stock markets, private equity purchase multiples and venture capital valuations at, or near, all-time highs, if you’re a business owner contemplating selling your business, it may make sense to do it before market conditions change and capital gains taxes increase—even though you’ll get only a 1.5% return for 10 years by investing the proceeds in a U.S. Treasury bond! Please give us a call if we can help you think through these considerations.

Recent Transactions

recent BB tombstones

Bengur Bryan Advises 3E, LLC

3E, LLC

Bengur Bryan arranged $67.5 million in senior debt and preferred equity for 3E, LLC (the “Company”), a utilities service provider, to repurchase equity from a minority investor and refinance its debt to position it for growth.

Under the Benton-Georgia, LLC and Pipe Strong, LLC subsidiaries, 3E installs, inspects, maintains and replaces critical infrastructure for blue-chip, investor-owned natural gas utilities throughout the Southeast and Midwest regions. With history dating back to 1914, 3E enables utilities to reach their infrastructure goals and is well positioned to help its utility partners expand, improve maintenance and replace aging utility networks. The Company is a certified Minority Business Enterprise and is wholly owned by 3.5.7.11, a technology development, patent and private investment firm which has holdings in the data center, energy and financial services industries.

“The Bengur Bryan team served as an invaluable resource in structuring a transaction that allowed us to buy out our non-control equity partner and arrange a capital structure that sets up 3E to better serve our customers,” said Dale LeFebvre, founder of 3.5.7.11. “The team expertly managed a complex multi-party transaction and negotiated numerous competing interests, allowing us to reclaim 100% of the equity ownership and position our Company for growth. We look forward to continuing our relationship with Bengur Bryan.”

“Scott, Pat and Charles at Bengur Bryan partnered with us to execute a complicated set of transactions with multiple parties on a very tight timeline,” said 3E Chief Financial Officer Jay Scherer. “The Bengur Bryan team was instrumental in supporting and preparing 3E for its next chapter of growth.”

2020 Year in Review

2020 began with only a hint of the disruption that COVID-19 would cause. As the pandemic spread, many of our clients’ companies were required to close or reduce their activities—severely in some cases. Many companies were faced with the challenge of simply staying afloat.

Our traditional M&A and capital markets deals were delayed, and we shifted gears to help our clients maneuver through these turbulent times. From helping our clients renegotiate loan agreements with their lenders, navigate the application process for new loan programs, such as the Payroll Protection Program (PPP) and Main Street programs, or seek capital from other sources to ensure they had enough cash to meet their fixed obligations and payroll, we offered advice and encouragement as needed. On a pro bono basis, we assisted over 50 businesses and non-profit charities to apply for a PPP loan.

In the first half of 2020, lenders and private equity firms mainly focused on their portfolio companies, resulting in little market activity. As the impact of COVID-19 on various industries became clearer however, companies that benefited from this changed environment—like janitorial services (Business Services) and quick service restaurants (Consumer Products & Services)—saw interest from both strategic and financial buyers.

A Few of Our Notable 2020 Transactions

Bengur Bryan represented Proximas Group with its purchase of ADG Creative, LLC, a leading strategic communications firm providing business-focused creative solutions for government agencies and commercial entities.

Bengur Bryan represented National Janitorial Solutions, a nationwide provider of janitorial services to a wide variety of retail, healthcare, industrial, office, and educational facilities operators, in its sale to Revolent Capital Solutions.

Bengur Bryan also served as the exclusive financial advisor to PJPA, LLC, a long-time Papa John’s Pizza franchisee, in the sale of its 18 New Jersey and Delaware restaurants. The sale attracted interest from franchisees looking to consolidate a territory to restaurant companies aiming to diversify their holdings. With the pandemic, quick service concepts, like Papa John’s Pizza, benefited from the shift to carryout and delivery options.

Our team is growing; we are pleased to have Patrick Frazier, Jeff Rummell, and Samantha Woolf join the Bengur Bryan team. As we look forward to 2021, we are optimistic that business activity across many industries will return to normal. As has been the case historically, a disruptive crisis creates both challenges and opportunities.

We continue to support our clients affected by COVID-19 and will be looking for merger and acquisition opportunities for companies that will benefit from industry shifts and the expected economic recovery. We thank you for your continued partnership and hope this new year brings you renewed health and success.

Tecum Equity Expands Portfolio With Leading Crane Dealership in the Carolinas

Pittsburgh, PA: Pinnacle Cranes, a leading Link-Belt and Manitex dealer in North Carolina and South Carolina, has been purchased by Western Allegheny Capital, LLC, and Tecum Equity, a Pittsburgh, PA-based family office investment partnership.

Pinnacle Cranes was established in 2001 as a division of CTE (formerly known as Carolina Tractor and Equipment Company), a leading provider of equipment, service, technology, and rental services to the construction, power generation, material handling, and warehouse solutions industries throughout North Carolina, South Carolina, and other Southeast markets.

Jim Mackinson, CEO of Pinnacle Cranes, comments, “The Pinnacle Team looks forward to partnering with Western Allegheny and Tecum to continue the great growth journey we have experienced in our markets. We will continue to operate as Pinnacle Cranes out of our current service facilities in Charlotte and Raleigh to provide customers with the same exceptional quality and service they have come to expect from Pinnacle.”

Tyson Smith, a partner at Tecum Equity, added, “We are excited to partner with the employees of Pinnacle to continue building on its success and key partnerships with Link-Belt and Manitex. We are confident the culture of great customer service will continue, and we look forward to supporting Pinnacle’s growth over the long-term.”

A comprehensive transition plan put in place by Pinnacle, CTE, and Tecum will guarantee Pinnacle continues the highest level of customer and product support. A search is currently underway to locate a new headquarters to meet future market demands.

About Tecum Equity: Western Allegheny Capital, LLC d/b/a Tecum Equity Partners (“Tecum Equity”) is a private family office investment vehicle, advised by Tecum Capital Management. Tecum Equity is focused on making control equity investments in middle-market companies with EBITDA ranging from $2 to $20 million. Tecum Equity seeks companies with an identifiable niche, a strong culture of customer service, and a history of long-term profitability. Tecum Equity is differentiated from traditional private equity by its intention to hold investments across multiple generations and long time horizons.

About Tecum Capital Management: Tecum Capital Management is a Pittsburgh, PA-based private investment firm with over $750 million of committed capital and focused on providing mezzanine debt and private equity to middle-market companies. Since 2006, Tecum has invested in over 80 platform and add-on acquisitions across its managed funds.  The firm is focused on providing financing for recapitalizations, buyouts, generational transitions, mergers and acquisitions, and other growth capital needs.

Bengur Bryan Co-Advises PF Growth Partners on an Equity Recapitalization and Debt Financing

On July 11, 2019, Bengur Bryan completed a $96 million equity recapitalization by Alaris Royalty Corp. and arrangement of $205 million in new senior debt facilities for PF Growth Partners, LLC (“PFGP”) led by Fifth Third Bank.  The transaction provided for new debt and equity growth capital to support the Company’s new club growth across its various development areas, as well as providing liquidity to the Company’s shareholders. Fifth Third Securities was a co-advisor to Bengur Bryan in the transaction.

Founded in 2007, PF Growth Partners, LLC is one of the largest franchisees in the Planet Fitness® (“PF”) system, currently serving over 500,000 members and operating 64 fitness clubs across the United States. The Company’s core geographic footprint includes the Maryland, Washington D.C., Tennessee, Florida, Washington and Northern California markets. Victor and Lynne Brick, co-founders and CEO + President of PFGP, each have over 35 years of experience in the health club industry, having opened their first full-service club in 1985. The Company is further supported by a group of professional business owners and an experienced management team which includes Glenn Norris, CFO, who has been with the Company since 2007. Over the years, PFGP has received multiple accolades from Planet Fitness corporate, including the inaugural Franchisee of the Year in 2013, Developer of the Year in 2014 and 2015, Highest BER (Brand Excellence Review) in 2014 and the Judgement Free Generation award in 2016 for their exceptional work with the local boys’ and girls’ clubs in Tennessee.

Bengur Bryan and its affiliates have had a relationship with Victor and Lynne Brick for over 15 years. In November 2014, Bengur Bryan completed a $93.75 million private placement of senior debt and preferred equity to refinance the Company’s existing debt and allow for new club growth in its development areas. Since 2014, Bengur Bryan and its affiliates have provided ongoing financial advisory services to the Company including a $5 million add-on preferred equity investment from its preferred equity partner in July 2015, a $20 million expansion of the Company’s existing capital expenditure loan from a syndicate of lenders in November 2016, the acquisition and conversion of 7 non-Planet Fitness clubs, under multiple brands, in early 2017 and the arrangement of $150 million of senior debt facilities from a syndicate of lenders in May 2018.

Bengur Bryan Advises Leading Planet Fitness Franchisee on Recap

In May 2018, Bengur Bryan completed the arrangement of $150 million in new senior debt facilities for PF Growth Partners, LLC (“PFGP”) from a syndicate of lenders. The recapitalization provided for a new growth capital facility to support the Company’s new club growth across its various development areas, the buyout of certain minority equity holders, as well as a partial repurchase of $25 million of preferred equity from its partner Alaris Royalty Corp. (“Alaris”).

PFGP, founded in 2007, is one of the leading franchisees of Planet Fitness (“PF”) low-cost fitness clubs. Since opening its first club in 2008 in Maryland, PFGP has grown rapidly to 57 locations operated today across five states including Maryland, Tennessee, Florida, Washington D.C. and Washington state. Victor and Lynne Brick, co-founders and CEO + President of PFGP, each have over 35 years of experience in the health club industry, having opened their first full-service club in 1985. Since becoming a PF franchisee in 2007, Victor and Lynne have expanded the team and its capabilities to include Glenn Norris, CFO, with the Company since 2007, and Chris Cavolo, COO, who joined PFGP in 2012. In addition, the management team is further supported by a group of experienced, professional owners of the business. Over the years, PFGP has received multiple accolades from Planet Fitness corporate, including Franchisee of the Year in 2013, Developer of the Year in 2014 and 2015, Highest Brand Excellence Review in 2014 and the “Judgement Free” Generation Award in 2016.

Bengur Bryan and its affiliates have had a relationship with Victor and Lynne Brick for over 15 years. In November 2014, Bengur Bryan completed a $93.75 million private placement of senior debt and preferred equity to refinance the Company’s existing debt and allow for new club growth in its development areas. Since 2014, Bengur Bryan and its affiliates have provided ongoing financial advisory services to the Company including a $5 million add-on preferred equity investment from its preferred equity partner, Alaris, in July 2015, a $20 million expansion of the Company’s existing capital expenditure loan from a syndicate led by Fifth Third Bank in November 2016 and the acquisition and conversion of 6 non-Planet Fitness clubs, under multiple brands, in early 2017.

Bengur Bryan Advised Accscient, LLC on the Acquisition of PDS, LLC

Bengur Bryan & Co., Inc. advised Accscient, LLC in the purchase of PDS, LLC (PDS). PDS, established in 1987 and headquartered in Denver, CO, has offices in Phoenix, AZ and Salt Lake City, UT and is one of the leading Information Technology (IT) & Engineering consulting firms in the Western United States. Given their presence in the southwest and strong engineering competencies, the acquisition will create significant benefits to both companies and especially PDS’s customer base.

Based in Atlanta, GA, Accscient was founded in 2005 with a goal of building a leading national provider of IT services. Accscient operates through three divisions (Norwin Technologies, Premier IT Solutions and Appridat) and provides IT consulting and IT staffing services on client projects including ERP planning/implementation, business intelligence, and infrastructure/data center management. Accscient serves Fortune 1000 customers in a wide variety of industries with over 350 consultants while leveraging offshore capabilities when appropriate.