Mid-Market Shop Buys Swimwear Co. – Exclusive

Target: Manhattan Beachwear LLC

Price: Undisclosed

Sponsor: Linsalata Capital Partners

Seller: Allan Colvin

Financial Adviser: Seller: Wells Fargo

Linsalata Capital Partners has bought Manhattan Beachwear LLC, a Cypress, Calif.-based designer, manufacturer and importer of women’s swimwear, Eric Bacon, a senior managing director with the firm, told Buyouts.

Allan Colvin, who founded the company more than 20 years ago, will continue as CEO of the company. In addition to making its own brands—24th & Ocean and Maxine of Hollywood—the company holds licenses for brands such as Hobie, Kenneth Cole, and Sofia by ViX. The company swimsuits are sold in major department stores and chains including Macy’s, Dillard’s, Saks Inc., Nordstrom, and Everything But Water.

The Mayfield Heights, Ohio-based buyout shop plans to expand the company by getting its products into more retailers, adding brand licenses, and possibly add-on acquisitions, Bacon said. Equity for the deal will come from Linsalata Capital Partners Fund V, a $425 million pool the firm closed in 2005.

Linsalata Capital is a long-time investor in niche apparel. Previous investments include Alpha Shirt Company, a wholesaler, designer and importer of imprintable sportswear (think company golf shirts or rock band T-shirts), which Linsalata Capital bought in 1999 and sold in 2003; and Augusta Sportswear, a designer, manufacturer and distributor of athletic apparel and team uniforms, which the firm acquired in 2004 and sold in 2008. According to the firm’s Web site, annual sales at Alpha Shirt Company increased to $440 million from $250 million under Linsalata Capital. Likewise, annual sales at Augusta Sportswear increased to $200 million from $79 million while under the firm’s ownership.

Wells Fargo advised Manhattan Beachwear in the sale.

Linsalata Capital has been exceptionally active over the last month. In December the firm agreed to buy Spartan Foods of America, a Spartanburg, S.C.-based maker of pizza crusts and pancakes sold in grocery stores under the names Mama Mary’s and Mystic Pizza. And the firm is currently in talks to buy Eatem Corporation, a Vineland, N.J.-based company that makes bases and concentrates used in the food industry, as previously reported in Buyouts. Bacon declined to discuss that deal.

Linsalata Capital has made more than 85 acquisitions through six funds since its founding in 1984. The firm has been a generalist investor, taking advantage of opportunities in business services, food service equipment, pet products and services, among many others. The firm typically invests $10 million to $50 million of equity in companies generating EBITDA between $7 million and $35 million.