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KRG Paves Way for New Portfolio Co. –

KRG Capital Partners LLC this month acquired Atlantech International Inc., a holding company that owns The Tensar Corp., a manufacturing operation based in Morrow, Ga. American Capital Strategies provided $18.75 million in senior subordinated debt with warrants and $1 million in redeemable preferred stock.

Partners at Denver-based KRG were not available for comment at press time.

“American Capital is backing a strong, well-respected management team at Atlantech as well as a tremendous sponsor in KRG,” said Darin Winn, a principal at American Capital.

Tensar is an international manufacturer of earthwork geogrid reinforcement products and systems. Geogrids permit cheaper, faster and more durable construction of transportation and environmental infrastructure projects including roadways, parking lots, retaining walls and coastal protection systems. The company’s customers include municipal, county and state departments of transportation and environmental regulatory agencies, as well as customers from the commercial and industrial sectors.

The Transportation Equity Act for the 21st Century (TEA-21), which is a six-year, $200 billion federal highway bill that runs through 2003, has resulted in increased government outlays for highways and bridges.

“Tensar will continue to benefit from increased outlays for infrastructure capital investment and increased acceptance of geogrids as cost-effective soil stabilization products,” said Winn.

This is not the first time that KRG Capital has teamed up with American Capital on a deal. In fact, in September, the pair, along with other investors teamed up to acquire Case Logic Inc., a marketer of lifestyle-oriented accessory products. American Capital also purchased a 10% stake in TransCore, a system integrator and operator in the intelligent transportation systems industry, for $7.3 million in subordinated debt with warrants and redeemable preferred stock in September 1999. The lead sponsor in the deal was KRG Capital Partners.

Grease is the Word

In other American Capital news, the firm committed $22.7 million this month for the recapitalization of Lubricating Specialties Co., an independent manufacturer of lubricants and greases on the West Coast. The investment takes the form of senior subordinated debt and senior debt with Comerica Bank as the agent for the senior debt facility. Bethesda, Md.-based American Capital gained a minority stake in the company.

“Lubricating Specialties has a great management team that bought the company out a couple of years ago and they’ve done a great job growing the business,” said Jon Thornton, a principal at American Capital. “There are a lot of opportunities for market share gains because the industry is fragmented and a lot of the major oil players have been consolidating and getting out of their non-core lines of business, which include lubricants. We see this as an opportunity to use this company as a platform to pick up the small lubricant producers that are scattered throughout the country.”

Pico Rivera, Calif.-based Lubricating Specialties is an independent manufacturer of lubricants and grease with clientele in the U.S. and Asia. The company’s annual revenue was not disclosed.

Thornton said American Capital plans to grow the company through “complimentary acquisitions both regionally and throughout the U.S. because it is a fragmented business and they’re one of the dominant players in a fragmented industry. “We want to grow this company into the dominant lubricant producer in the country over the next few years,” he said.