Navigation Capital’s Brand New Bag: James Brown

Target: James Brown Contracting

Price: Undisclosed

Sponsors: Navigation Capital Partners; VVS Capital

Financial Adviser: Seller: Transportation Capital Partners

Legal Counsel: Navigation Capital Partners: Hunton & Williams; VVS Capital: Powell Goldstein; Seller: Miller & Martin

Navigation Capital Partners has bought the hardest working company in the trucking business, James Brown Contracting. Unrelated to the Godfather of Soul, the business delivers supplies to paper and packaging companies in the Southeast through its subsidiary, James Brown Trucking. Atlanta-based Navigation Capital renamed the business, which includes subsidiary JBT Brokerage, calling it James Brown Holdings.

Navigation Capital paid between $10 million and $40 million in equity for James Brown Holdings. The 32-year-old company serves as the lower mid-market firm’s latest platform acquisition. With a debt facility from Wells Fargo Bank and John Hancock Life Insurance Company, Navigation Capital is already looking at a number of complimentary services and add-on ideas, said David Panton, partner at the firm.

Brown, the company’s founder and sole owner, cashed out of the business he built but plans to remain active in an executive role. Replacing him as CEO is Brian Kinsey, a trucking industry veteran that worked with companies like Landstar System, a logistics business with a $2.8 billion market capitalization. Navigation Capital has been searching for targets with Kinsey in mind, Panton said.

Joining majority owner Navigation Capital on the deal, VVS Capital took a minority stake in James Brown Holdings. The Atlanta-based buyout firm discussed the deal with James Brown Holdings before approaching Navigation Capital with the opportunity. The firm got its start last year when Peter Vaky and John D. Van Slooten left SunTrust Capital Markets. James Brown Holdings is the firm’s first deal; it aims to do two or three more one-off deals to build a track record before seeking to raise a formal fund, Vaky said.

James Brown Holings’s brokerage business is typical for trucking companies, Panton said. JBT Brokerage serves to fill the business’s so-called “empty lanes,” arranging extra routes so that trucks don’t return empty-handed from deliveries. Navigation Capital was attracted to James Brown Holdings’s strong on-time performance and up-to-date technology, Panton said.

Navigation Capital’s investment came from Navigation Capital Partners IV LP, which is owned by the secondaries trading arm of Goldman Sachs Asset Management. Goldman Sachs purchased the limited partnership interests of Mellon Financial Corp. in 2007 after Mellon Financial merged with the Bank of New York. Those LP interests include funds holding 34 portfolio companies; Navigation Capital was created to manage them.

Navigation Capital focuses on niche manufacturing and services business generating revenues of under $200 million.—E.G.