Red Arts Capital Realizes Top Quartile Return on a GP-Led Secondary Recapitalization as Granite Creek Exits Its Position in Sunset Pacific Transportation

Three years after acquisition of leading freight consolidator, the two Chicago-based private equity and investment firms shift stakes in the company

Private equity firm Red Arts Capital, and private investment firm, Granite Creek Capital Partners, L.L.C., announced today that Granite Creek sold its equity and subordinated debt positions in the California-based Sunset Pacific Transportation, while Red Arts Capital and Prudential Private Capital acquired Granite Creek's significant minority stake in Sunset Pacific.

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Chad Strader (left) and Nick Antoine, Co-Founders and Managing Partners of Red Arts Capital (Photo: Business Wire)

Since Red Arts Capital and Granite Creek acquired Sunset Pacific Transportation in 2019, Sunset Pacific has successfully executed various organic growth initiatives and completed the acquisition of Radius Logistics, a Surrey, BC-based third-party logistics company. Granite Creek’s investment in Sunset Pacific Transportation was made from its $200 million fund, Granite Creek FlexCap II, L.P. (“FlexCap II”).

“Sunset Pacific has experienced significant growth since our investment just a few years ago, which was driven by an extraordinary management team,” said Nick Antoine, Co-CEO and Managing Partner at Red Arts Capital. “This recapitalization enables us to continue to provide Sunset Pacific with the capital and resources needed to expand the Company’s service capacity and best position the business for its next stage of growth.”

According to PitchBook Data Inc., private equity invested $50.6 billion in logistics in 2021, a figure that is more than three times the amount invested in 2020 and 34% higher than the 2019 sum, which was the previous annual record for private-equity investment in supply chain businesses. PitchBook data also shows that firms have invested a further $9.1 billion in 74 deals this year through early May of 2022, despite the global slowdown in private-equity deal making amid macroeconomic anxiety.¹

“Granite Creek is proud to have supported Sunset Pacific’s exceptional growth over the last few years,” said Brian Boorstein, Co-founder and Partner at Granite Creek. “Sunset Pacific has demonstrated the value of its differentiated business model – derived and perfected by its first-class management team – which has enabled us to realize a substantial gain on our investment as well as put it in a strong position for the future.”

Sources: 1.) Private-Equity Firms Hunt for Deals in Disrupted Supply Chains. Article by Chris Cumming, The Wall Street Journal, May 9, 2022.

About Red Arts Capital

Based in Chicago, Illinois, Red Arts Capital is a leading investment firm focused on supply chain-related, transportation and logistics businesses. Red Arts Capital seeks to partner with and invest in privately-owned, primarily family-owned, and multi-generational businesses with solid business fundamentals and a strong track record and reputation. With sector expertise and a commitment to stewardship and excellence, Red Arts Capital’s approach earns the firm a trusted seat at the table with portfolio companies, investors and partners. For more information about Red Arts Capital, please visit ​​www.redartscapital.com.

About Granite Creek Capital Partners, L.L.C.

Founded in 2005, Granite Creek Capital Partners, L.L.C. is a Chicago-based private investment firm focused on providing capital and operational resources to lower middle market companies engaged in manufacturing, business services, healthcare, and agribusiness. With an experienced team of investment professionals bringing expertise in private equity, banking, operations, and business development, Granite Creek has a successful track record of investing in and supporting its portfolio companies. In addition to providing funding to lower middle market companies, in 2011 Granite Creek co-founded Renovo Financial, one of the largest private lenders serving real estate entrepreneurs.

About Sunset Pacific Transportation

Sunset Pacific Transportation is a leading national provider of Volume Less Than Truckload (“Volume LTL”) and other complementary shipment services. The Company’s advanced freight consolidation and routing capabilities allow it to offer a unique solution that serves the niche between traditional LTL and Truckload. Sunset Pacific provides a critical link in its customers’ supply chains and is relied upon by thousands of third-party logistics companies and direct shippers.

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