Done Deals: Franklin Street Grows Nursery –

Franklin Street Equity Partners, manager of a pledge fund formed in 1997, this month led a group of investors in the acquisition of John Zelenka Evergreen Nursery for $58 million.

Other equity investors involved in the deal include BancBoston Ventures Inc., Lincoln Investment Management and the company’s management.

Tom Ablum, a general partner at Franklin Street Equity, declined to provide terms of the transaction, but said senior debt financing was provided by Comerica Bank and LaSalle Bank, while subordinated debt was provided by Lincoln Investment Management.

This marks the fourth deal for Chicago-based Franklin Street Equity since the group signed on limited partners three years ago. Prior to 1997, Ablum was the president of Ablum, Brown & Co., which advised private equity investors and made co-investments alongside its clients.

Ablum described the pledge fund as opportunistic in nature, but said it leans toward manufacturing and distribution because of the experience of the partners in those areas. The fund also focuses on industries that would be least affected by a recession, while also avoiding high technology deals.

“We do realize, however, that the Internet is having a significant impact on business,” Ablum said. “We will take part in the changing atmosphere of business-to-business transactions because we don’t want to get bypassed in that area.”

The Franklin Street Equity Fund has 15 limited partners that include LaSalle National Bank, Provident Mutual Life Insurance Co., Allstate Insurance Co. and Heller Financial, as well as some “special partners,” such as BancBoston, that commit equity when needed.

John Zelenka Evergreen Nursery, based in Grand Haven, Mich., grows and distributes container and field-grown plants which are then sold wholesale to customers in the lawn and garden industry. Several of its customers include Wal-Mart, Home Depot and Lowe’s.

Ablum said his group will spend its time building up Zelenka through acquisitions in order to acquire additional acreage. The company presently has a 5,000 acre Michigan facility and 350 acres in North Carolina.

Out of approximately 30,000 nurseries, only 20 to 30 of which are of significant size, Zelenka was the largest one that was available to be purchased, Ablum said. It was attractive to the firm, he said, because of its size – it is the largest nursery east of the Mississippi River – and its East Coast location where it is not as susceptible to the effects of El Nio, like West Coast nurseries.

Franklin Street Equity currently is looking at two add-on acquisitions for Zelenka, he said.

Separate from these, the firm is planning to close its fifth deal on a company involved in transportation logistics by May 1 and start a blind pool fund sometime next year.