Pine Tree Flips Bradley-Morris After Two-Year Hold

August 11, 2015 –

Pine Tree Equity Partners LLC is selling Bradley-Morris Inc., a military-focused recruiting firm it bought only about two years ago, marking the conclusion of an auction process of less than five months.

The buyer is Thompson Street Capital Partners LLC, a St. Louis private equity firm, which is partnering with management to acquire the job placement company for military veterans. Terms of the transaction weren’t disclosed, but Thompson Street typically invests in companies generating between $4 million and $15 million in Ebitda, according to its website.

Founded in 1991 by Sandy Morris, Bradley-Morris is one of the largest military-focused recruitment firms in the U.S. Led by CEO Tim Best, a veteran of the U.S. Army where he was an aviator in the 82nd Airborne Division, the company places engineering and technical candidates leaving the military into civilian jobs. The Kennesaw, Ga., company boasts more than 30,000 placements of officer and technical candidates to date.

For Miami private equity house Pine Tree, the sale concludes a relatively short holding period, as the firm recapitalized Bradley-Morris in partnership with management in June 2013. Terms of the transaction were not disclosed.

An auction process for the recruitment firm got under way sometime around March, Pine Tree managing director Roberto Canto said.

He declined to comment on the timing or terms of the transaction, but he noted that Farlie Turner & Co., Bradley- Morris’ financial adviser on the sale, approached several PE firms and some strategic buyers during the process.

Mike Turner, a managing director at the Fort Lauderdale, Fla., and Houston investment bank, led the process, with assistance from Kerensa Jimenez, Daniel Vetrano and Keita Iwabuchi.

“It was a good result for us for sure,” Canto said, declining to elaborate.

Pine Tree’s other portfolio companies include BPI Sports, a nutrition supplement maker; Celtic Capital Corp., a regional provider of asset-based financing; Jewelry Repair Enterprises Inc., a franchisor of jewelry and watch repair centers; and Smile Design Dentistry, a chain of dental practices in Florida. It typically invests $2.5 million to $7.5 million in companies with $10 million to $50 million in revenue and $2 million to $7 million in Ebitda. Pine Tree targets sectors including consumer products, financial services and niche manufacturing.

Other job recruitment firms that are partly or entirely focused on the military segment include Cameron Brooks, TalentRISE, Direct Recruiters Inc., Orion International Consulting Group LLC and Lucas Group, the latter which was acquired by Orchard Holdings Group LLC from H.I.G. Capital LLC in October 2013 for an undisclosed price.

“Leveraging military leadership is really big business,” noted Scott A. Scanlon, founding chairman and CEO of Hunt Scanlon Media LLC, a Greenwich, Conn., research firm focused on the talent management industry. “There’s clearly always a need.”

While its rivals likely wouldn’t have had the capacity to take out Bradley-Morris, strategic buyers involved in the process may have included larger contingency-oriented staffing agencies such as Robert Half International Inc. (RHI) and ManpowerGroup Inc. (MAN), Scanlon said.

In fact, The Deal reported a week ago that Milwaukee’s ManpowerGroup is poised to execute an increasing number of acquisitions given that it is less leveraged than it has been for several years. The human resources consulting firm agreed to buy Germany’s 7S Group GmbH in June for €136.5 million ($149.5 million), not including a potential earnout component.

For Thompson Street, which invests primarily in service companies, manufacturers and distributors, the acquisition follows a July 27 deal to buy the assets of CxP Data Centers as an add-on to existing portfolio company TierPoint LLC, a provider of data center services and cloud computing. Terms of the transaction weren’t disclosed.

Thompson Street managing director Jack Senneff declined to comment beyond a Thursday, July 30, statement from Farlie Turner, other than to say by e-mail that “we’re enthusiastic about this new platform investment, and our team is looking forward to supporting the accelerated growth of this already successful business.”

Sidley Austin LLP’s Roger Wilen, Christopher Krueger, Joseph Wyss, Michael Gold, Karen Hayes and Scott Goldstein provided legal counsel to Thompson Street on the transaction, while KPMG LLP supported its financial due diligence.

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