LOS ANGELES — Pacific Avenue Capital Partners LLC, a private investment firm based here, reports that it has raised new capital to purchase Emerald Textiles, a provider of fully outsourced healthcare linen management services in the Western United States, from existing limited partner investors through a continuation vehicle.
“Pacific Avenue, alongside the Emerald team, have transformed the linen services landscape in the Western United States,” says Chris Sznewajs, founder and managing partner of Pacific Avenue. “The continuation vehicle represents our continued focus building a world-class healthcare linen provider that serves the market.
“We are thankful for the partnership of our equity partners and their support validates Pacific Avenue’s disciplined investment approach.”
The transaction and Pacific Avenue’s continued involvement position Emerald to take advantage of significant market opportunities while also providing liquidity for the original limited partners.
The vehicle is funded by a group of leading institutional investors including Glendower Capital, funds and accounts managed by BlackRock Private Equity Partners, DWS Private Equity, Allstate Investments, CH Investment Partners, and other blue-chip investors. Furthermore, the transaction includes a significant investment from the Emerald management team and Pacific Avenue.
The transaction includes more than $200 million of committed equity capital to support Emerald’s next phase of growth and to buy out certain limited partners.
The transaction also includes a refinancing of Emerald’s existing credit facilities with funds managed by the Credit Group of Ares Management Corporation providing a unitranche solution and Wells Fargo Capital Finance providing an ABL revolver.
“This is an exciting day for our company, employees, supply partners and customer partners,” says Andy Kratky, Emerald’s CEO. “We have invested heavily in facilities and state-of-the-art equipment and have achieved incredible growth in partnership with Chris and the team over the past four years.
“The continuation vehicle allows us to leverage what we have done well and accelerate our investment plans to serve and provide value to all of our partners. Our deep commitment to customer service, superior cleanliness, resource preservation, and safety have established Emerald as the leading provider of outsourced linen management services in the Western United States.”
Jones Day served as M&A legal and debt counsel to Pacific Avenue. Weil, Gotshal & Manges LLP is serving as counsel for the continuation fund. Piper Sandler & Co. and Stephens Inc. advised on the private debt financing. UBS Investment Bank acted as the exclusive placement agent for the equity financing.
Pacific Avenue will act as the general partner of the single asset vehicle.