Sentinel recapitalises Canadian yarn maker

The New York based middle market firm makes a significant investment with management in family-run Spinrite in a transaction valued in excess of $50 million.

New York-based private equity firm Sentinel Capital Partners has partnered with company management to make a significant investment in yarn maker Spinrite.

 

Terms of the deal were not disclosed, though sources close to the transaction set its value in excess of $50 million (€39 million).

 

Founded in 1952, family-run Spinrite manufactures and markets craft yarn products in the North American yarn market, which is currently valued at $300 million. Some of the company’s brands include Bernat, Patons, Lily Sugar’n Cream and Phentex. Spinrite employs approximately 500 employees and is headquartered in Canadian rural town Listowel, Ontario, which has a population of about 6,000.

 

According to Sentinel founder and managing partner David Lobel, one of the reasons Spinrite chose Sentinel in the deal was the firm’s ability to balance the company’s family’s needs with the needs of the business, which are both deeply ingrained in the small town community.

 

“They were looking for someone acceptable and comfortable to them, that would be respectful of the history and culture of the family in the town, and maintain their privacy,” Lobel said. “There was a strong relationship element in the deal and that’s what we specialize in. … Qualitative factors played an important role in the decision making of the seller.”

 

Sentinel partner Eric Bommer, who was also involved in the deal, said Spinrite has high potential in the North American market because of changing trends.

 

“There’s been a demographic shift as we’ve seen the aging of the baby boomer generation,” Bommer said. “People are also spending more time at home focusing on hobby crafts instead of on technology-related activity. More younger people are also knitting as well.”

 

Last May, Sentinel announced a $66.2 million (€51.5 million) recapitalization of Houston, Texas-based Castle Dental Centers, which develops, manages and operates integrated dental networks in Texas, Tennessee, Florida and California.

 

Sentinel Capital Partners focuses on buying and building middle-market companies in the US and Canada by partnering with management. The firm targets companies in the $3 million to $15 million operating profit range in service businesses, consumer products, food and food services, franchising and niche/light manufacturing businesses.