Sun Capital’s 4.5x Frontier Spinning deal boosts 2013 realizations to record $1 bln-plus

Scott Edwards, managing director of Sun Capital, said the deal for Frontier Spinning marks the firm’s eighth closed exit of 2013 as part of the biggest dollar tally of realizations in the firm’s 19-year history. He declined to comment on the terms of the deal or its return. 

“The exit environment is strong,” Edwards told Buyouts . ”If you look at our track record, most of our exits typically go to strategic buyers. Strategic buyers are looking for ways to grow in a slow-growth environment and they’re finding [deals] as an attractive way to do that. It’s also shaped by financing markets that are pretty attractive right now.”

Kurt Lentz , principal at Sun Capital, said turnaround efforts at Frontier Spinning included strengthening the management team, investing in better technology, expanding product lines and improving efficiency.

“We were able to expand capacity without adding to the footprints of buildings by improving distribution, cutting warehouse space and turning it into production space,” Lentz said. “We’re happy to have found a buyer that saw the value of the work.”

With 1,076 employees, Sanford, N.C.-based Frontier Spinning Mills now ranks as the second-largest cotton spinner in the United States. Frontier Spinning Mills yarn is used in sportswear, undergarments, socks, sweaters, fleece, denim, and home furnishings.

“Frontier has long-term relationships with blue chip clients that, when combined with strong, long-term demand for its products, make it an attractive investment for us,” Kevin Penn , managing director at American Securities, said in a prepared statement.

Also on the exit front, Sun Capital said it sold its investment in Wabash Technologies, a supplier of power-train sensors and actuators for the automotive market, to Sensata Technologies. Terms of the private transaction were not disclosed.

And on Dec. 3, Sun Capital announced it sale of Captain D’s Seafood Restaurant. Sister publication peHub reported Sun Capital will make about 8x its money with the sale of the chain. Centre Partners, the mid-market investor in Bumble Bee Foods and Bellisio Foods, purchased Nashville-based Captain D’s.

Sun Capital is currently in the market for Sun Capital Partners VI LP , which has a $3 billion target, according to a Form D filing from December 2012. Sun Capital has drawn about $2 billion in commitments thus far, according to peHub.com.

Limited partners in Sun Capital funds include the Regents of the University of California.