Archives for June 1, 2012

Imperial Capital Adds Two to Its Energy Sector Investment Banking Practice

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Imperial Capital announced the addition of Thomas Pritchard and Kenneth Morris, who joined the firm as Managing Directors in the Investment Banking Group based out of the firm’s New York office. They will Co-Head Imperial Capital’s investment banking practice in the energy sector. “Tommy and Ken’s experience and Capital Markets expertise are a strong addition to our energy practice,” said John Mack, III, Executive Vice President and Co-head of Investment Banking at Imperial Capital. “They will add significant depth to Imperial Capital’s existing Energy Investment Banking practice.”

Mr. Pritchard joins Imperial Capital with over 20 years of financial industry experience. He was most recently the Founding Partner and Chairman of the Board of Pritchard Capital Partners, a boutique investment bank, focused solely on the Energy sector. He was also a co-founder of Offshore Tool & Energy, an oil service company listed on the London AIM and sold to London Merchant Securities in 2002. Over the course of his career, he has advised numerous companies on critical strategic matters, including mergers and acquisitions and capital markets transactions. His prior experience includes Jefferies & Company, Johnson Rice & Company and Bear Stearns. He began his career at Drexel Burnham Lambert. Mr. Pritchard graduated from Washington & Lee University with a Bachelor’s degree in Geology.

Mr. Morris was most recently a Partner and Board member of Pritchard Capital Partners. His over 20 years of experience began on Wall Street as a sell-side Trader at various investment banks, including Arnhold and S. Bleichroeder as a Senior Trader; Schroders, and the Royal Bank of Canada as a Senior Equities Trader and Director of Energy Trading. Mr. Morris received an MA in Economics from Rutgers and a BS in Finance and Economics from the University of Delaware.

“Ken and I are excited about joining Imperial and expanding the opportunities available to our clients in the energy sector. Imperial’s expertise across the capital structure is a perfect complement to our deep native understanding and longstanding relationships with key industry players in the energy business,” said Mr. Pritchard.

Imperial Capital provides middle market companies and financial sponsors with capital markets, merger and acquisitions, capital structure, restructuring and recapitalization advisory services. The firm employs over 200 professionals and has offices in Los Angeles, New York, San Francisco, Boston, Chicago, Minneapolis, and London (www.imperialcapital.com).

“The addition of Tommy and Ken is consistent with the overall focus of our firm for growth in sectors of the economy that are active users of capital. In addition to growing our Energy Banking team, Imperial Capital intends to invest in additional sales, trading and research personnel in the Energy business,” said Jason Reese, Chairman and CEO of Imperial Capital Group.

Centerbridge Partners Acquires Reddy Ice

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Reddy Ice Holdings today announced that, having closed its previously announced financing arrangements, it has consummated its voluntary Chapter 11 reorganization. Effective today, the company emerged from Chapter 11 protection substantially de-levered and with a capital structure that provides the financial flexibility to further invest in the long-term growth of its business. The company is now majority owned by Centerbridge Partners.

Holdings is the largest manufacturer and distributor of packaged ice in the United States. With approximately 1,500 year-round employees, the company sells its products primarily under the widely known Reddy Ice brand to a variety of customers in 34 states and the District of Columbia. The company provides an array of product offerings in the marketplace through traditional direct store delivery, warehouse programs and its proprietary technology, The Ice Factory. Reddy Ice serves most significant consumer packaged goods channels of distribution, as well as restaurants, special entertainment events, commercial users and the agricultural sector. Reddy Ice is based in Dallas, TX (www.reddyice.com).

Completing its in-court recapitalization in just 50 days, Reddy Ice has successfully reduced its debt by approximately 32% percent, or $145 million. As part of this process, the company secured a $50 million revolving credit facility from Macquarie Bank Limited. The company also received approximately $25 million in new equity capital infusions, including a $7.5 million preferred stock investment by Centerbridge and a $17.5 million preferred stock rights offering to holders of the company’s pre-petition second lien secured notes backstopped by Centerbridge.

DLA Piper served as the company’s legal advisor, and Jefferies & Company served as the company’s financial advisor in connection with the restructuring. Kirkland & Ellis is acting as legal advisor to Centerbridge in connection with the restructuring.

“This is a very positive event for Reddy Ice and we are proud and excited to begin our partnership with Centerbridge and other stakeholders. We greatly appreciate the support of our employees, customers and suppliers throughout Reddy Ice’s restructuring process,” said Gilbert M. Cassagne, the Company’s Chairman, CEO and President.

Goldman Sachs Capital Partners Invests in Plastipak

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Plastipak Holdings, a supplier of plastic packaging to consumer product companies, announced today that GS Capital Partners (GSCP) has agreed to make a significant equity investment in the company. Plastipak has been owned and run by the Young Family since 1967. The Young Family will continue to hold a majority stake in Plastipak following the closing of the transaction.

“My family and the Plastipak management team have built this company over the past half century by partnering with our customers and suppliers,” said Bill Young, founder and CEO. “We look forward to a new partner in the form of GSCP as we execute our strategic vision for providing the best products and services to our clients and continuing to build out our global footprint.”

Plastipak is a manufacturer of plastic packaging containers and preforms for consumer products companies. Plastipak designs, manufactures, and distributes plastic containers in four product categories: carbonated and non-carbonated beverages; consumer cleaning; food and processed juices; and industrial, automotive and specialty products. The company’s operations span the US, Europe, and Brazil. In fiscal 2011, Plastipak sold approximately 21 billion preforms and bottles to more than 450 customers from 29 manufacturing facilities. The company was founded in 1962 and is based in Plymouth, MI (www.plastipak.com).

“Plastipak has an industry-leading management team and a world-class product portfolio,” said Henry Cornell of GS Capital Partners. “We look forward to working alongside the company’s current executives and the Young Family to continue to drive growth globally.”

GS Capital Partners is the private equity vehicle through which Goldman Sachs conducts its large, privately negotiated, corporate equity investment activities and is currently investing through its sixth fund. GS Capital Partners focuses on large, sophisticated business opportunities in which value can be created through leveraging the resources of Goldman Sachs (www.gs.com/pia).

The Sterling Group Exits Roofing Supply Group

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The Sterling Group today announced that it has finalized the sale of Roofing Supply Group (RSG) to Clayton, Dubilier & Rice. Roofing Supply Group is the fourth largest distributor of roofing supplies and related materials in the United States, with 59 locations in 24 states. “RSG has always had an excellent culture and best in class customer service efforts, but it was the resources and partnership with the Sterling team that enabled us to achieve new levels of success with the business. We look forward to continued growth under our new ownership,” said Mike Farrell, CEO of RSG.

Roofing Supply Group has grown significantly in recent years, driven by strategic and operational initiatives undertaken by The Sterling Group in partnership with management. Since Sterling acquired RSG from its founders in 2006, EBITDA increased by more than 50% despite a record decline in housing starts that has yet to rebound.

“The investment in RSG exemplifies Sterling’s investment philosophy and operational approach,” said Kevin Garland, a Partner at The Sterling Group. “For thirty years, Sterling has focused on partnering with management to drive strategic initiatives and grow businesses for all shareholders, regardless of market cycles. We have worked closely with management to make dramatic improvements to RSG’s procurement, sales, pricing and to expand the company’s network into strategic markets. The result has been what we believe to be outstanding financial performance in the face of difficult end market conditions.”

Roofing Supply Group is one of the largest wholesale distributors of roofing supplies and related materials in the United States. Through its network of 59 branches in 24 states, Roofing Supply Group provides one-step distribution services from roofing product manufacturers to roofing contractors and homebuilders. Each branch carries a complete line of roofing products for residential and commercial roofing, including composition asphalt shingles, underlayment, and associated ancillary products. The company is located in Dallas, TX (www.roofingsupplygroup.com).

The Sterling Group targets controlling interests in basic manufacturing, industrial services and distribution companies that have enterprise values from $100 million to $500 million. Sterling has sponsored the buyout of 41 platform companies and numerous add-on acquisitions for a total transaction value greater than $9.5 billion. The firm was founded in 1982 and is located in Houston, TX (www.sterling-group.com).

Clayton, Dubilier & Rice focuses on producing financial returns through building stronger more profitable businesses. Since inception, the firm has managed the investment of more than $17 billion in 51 US and European businesses representing a broad range of industries with an aggregate transaction value of approximately $80 billion. Founded in 1978, Clayton, Dubilier & Rice is based in New York, NY and London, UK (www.cdr-inc.com).

“RSG is a well-positioned business in a very attractive industry that has built strong customer relationships over time based on superior service and reliability,” said Nathan Sleeper, a Partner at CD&R. “We look forward to partnering with RSG’s exceptional management team to continue to grow the business, strengthen its market presence and enhance its industry-leading operating capabilities.”

Philip Knisely, a CD&R operating advisor, has assumed the Chairman role at RSG. Mr. Knisely is currently Chairman of Atkore International, a manufacturer of electrical and metal products, and prior to that was Executive Vice President and Corporate Officer of Danaher Corporation.

Financing for the transaction was obtained from Deutsche Bank Securities, Goldman Sachs Bank USA, Credit Suisse, UBS Investment Bank and Citigroup. Deutsche Bank Securities and Goldman, Sachs & Co. acted as financial advisors, and Debevoise & Plimpton acted as legal advisor to CD&R. The Sterling Group was advised by Harris Williams in the transaction.

Marlin Equity Partners Acquires Openwave Messaging and Openwave Mobility

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Marlin Equity Partners announced today that it has acquired the Messaging and Mediation product businesses from Openwave Systems. Marlin has renamed the acquired businesses Openwave Messaging and Openwave Mobility and will operate each business as a standalone platform.

Openwave Messaging provides core e-mail and voicemail software services to telecommunications service providers, mobile operators and cable operators. The company is based in Redwood City, (www.openwave.com/openwavemessaging).

Openwave Mobility provides software services to mobile carriers that address the rising costs of consumer data usage by enhancing the profitability and efficiency of IP traffic over 3G/4G mobile networks. The company is based in Redwood City, CA (www.openwave.com/openwavemobility).

Marlin Equity Partners invests in businesses across multiple industries that are in the process of undergoing varying degrees of operational, financial or market-driven change. The firm is based in is a Los Angeles, CA (www.marlinequity.com).

Southport Lane to Acquire Dallas National Insurance Company

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Private equity firm Southport Lane, through its subsidiary Lonestar Holdco, has reached an agreement with Dallas National Insurance Holdings to acquire 100% of Dallas National Insurance Company, a Texas based property and casualty insurer.

Dallas National Insurance Company is a property and casualty insurance company which writes predominantly worker’s compensation and general liability insurance. The company was formed in 2005 as a result of a merger between Dallas Fire Insurance Company, which commenced operations in 1962, and California Indemnity Insurance Company, which began business in 1988. Dallas National Insurance Company is based in Dallas, TX (www.dallasnationalins.com).

“We are committed to providing additional capital to strengthen Dallas National and provide further security to policyholders,” said Glenn Weber, CEO of Southport Re, Southport Lane’s reinsurance affiliate. “This acquisition underscores our long-term strategic interest in building a significant presence in the insurance sector. Dallas National enjoys a large pool of clients throughout the U.S., complementing our insurance and reinsurance operations.”

Southport Lane is a private equity firm founded in 2010 with investments in insurance and reinsurance. Among the firm’s portfolio investments is Southport Re, platform for Alternative Risk Transfer activities. The firm is headquartered in New York and has total capital commitments in excess of $1 billion (www.southportlane.com).