San Diego, California (November 3, 2014) - Huntington Capital Fund III (“Huntington”), a San Diego based lower middle market mezzanine fund, announced today that it has completed an $8.0 million mezzanine loan and equity investment in Protect Plus Air Holdings, LLC (“PPAH”), which is owned by the Lackey Group and is headquartered in Hickory, North Carolina.
PPAH manufactures and distributes residential filters used in air conditioners and heating units. The company is the 2nd largest residential air filtration company in the US, and represents a diverse portfolio of air filtration related products and brands, including exclusive licenses with Arm & Hammer®, Dupont®, and proprietary brands such as Purafilter 2000® and True Blue®. PPAH employs approximately 900 in the US and serves in excess of 45,000 retail doors in 48 states.
Huntington began its relationship with PPAH in 2004 when it invested in a predecessor entity called Purafilter 2000, which at the time was generating approximately $5 million in annual revenues. Huntington has been working with the Lackey Group since 2008, when the Lackeys and Huntington Capital Fund I bought the controlling interest in Purafilter 2000, recapitalized it and embarked on a successful turnaround of the struggling company. Since 2008, PPAH has merged and acquired four other air filter companies and Huntington Capital has been a supportive partner in each step of its growth.
Frank Mora, a Partner in Huntington led the transaction for Huntington and commented that “This transaction was the key to the company’s growth plans and allowed them to successfully change banks to JP Morgan/Chase which provides them with multiple banking facilities and generous financing vehicles”. Morgan Miller, Managing Partner for Huntington and Huntington’s representative to the PPAH Board of Directors said that “We are pleased to be a part of the Lackey team which is a well-run, highly successful group as evidenced by the large increases in revenues, and profits. Of the 56 companies that Huntington has funded since 2001 they are one of the very best managed, most creative and ethical we have seen”.
"Huntington Capital has proven to be an excellent financial partner over the years," noted PPAH President Robert Lackey Jr. "We have been especially impressed by their fair and open approach to structuring the funding arrangements, as well as their desire to be involved when needed to help our business grow with both the proper financial tools and business insights. We have a tremendous amount of respect and trust in the Huntington team and look forward to growing our companies with them in the future."
The VSTH Group, LLC of Charlotte, NC acted as financial advisor to the Lackey Group on this transaction.
The Lackey Family Group
The Lackey Family Group of companies was started as a product development consulting firm 40 years ago by Robert Lackey Sr. Today the group consists of 20+ businesses that are owned primarily by Robert Lackey and his son Robb Lackey. The portfolio of companies are focused on consumer product sectors, such as air and water filtration, employing around 1,000 people across the nation. The Lackey’s attribute the company’s success in large part to the talented senior management group, dedicated staff of employees, as well as its strong alliances with its key financial partners.
Based in San Diego, CA, Huntington Capital is a leading mezzanine capital provider to lower middle market companies throughout California and the Southwestern United States. Founded in 2000, Huntington is currently operating out of its third fund, Huntington Capital Fund III, which it raised in 2014 from a group of leading institutional investors. Huntington seeks to invest in established lower middle market businesses generating between $10 million and $75 million in revenues across a broad range of industries; investments are typically structured in the form of growth capital, buyout or acquisition financing ranging between $2.0 million and $9.0 million. The firm has invested in approximately 56 companies since its founding. For more information, please visit the company website at www.huntingtoncapital.com.
The VSTH Group
Founded in 2003, The VSTH Group, LLC is a Charlotte-based merchant bank focused on the lower middle market. VSTH Capital seeks to invest its own funds in opportunities with talented entrepreneurs to build successful business enterprises. As advisors, VSTH Group assists its clients in the analysis and execution of a broad range of sophisticated transactions, such as mergers, acquisitions, divestitures, financings, and restructurings. Patrick Heinrich led the transaction for VSTH.