Archives for June 6, 2012

KarpReilly Completes Initial Close for Fund 2

by

KarpReilly, a consumer-focused lower middle market private equity firm, has completed an initial close of its second fund, KarpReilly Capital Partners II, L.P. with $180 million of capital commitments. “We are grateful for the incredible support we have received from our limited partners, many of whom we have been working with since the mid 1980’s,” said Allan Karp, Partner and Co-Founder. All of the capital commitments for KarpReilly Capital Partners II are from investors that participated in the firm’s first fund which was raised in 2008 and also had capital commitments of $180 million.

In conjunction with the initial closing of this second fund, KarpReilly also closed the KarpReilly Co-Investment Fund II, L.P., with $120 million of additional capital. The capital for the co-investment fund was provided by KarpReilly’s limited partners.

Allan Karp and Chris Reilly founded KarpReilly in 2007 to invest in consumer growth companies at the lower end of the middle market and to provide not just capital and financial expertise, but strategic board level advice and stewardship to help portfolio companies execute on their long term growth plans.

“It is an exciting time for KarpReilly and our investors. We have built a leadership position as a value added capital investor to high growth consumer companies. Fund II will allow us to continue to execute this investment strategy and to have the opportunity to create significant value for our investors,” said Chris Reilly, Partner and Co-Founder.

KarpReilly makes minority or majority investments in consumer growth companies through a variety of transaction types including growth equity, management buyouts, acquisition financings and recapitalizations. The firm’s investment size is from $10 million to $75 million of equity capital. Industries of interest include building products; business services; consumer brands; health care services; retail; and restaurants (www.karpreilly.com).

Bregal Investments Launches New Private Equity Fund

by

Bregal Investments announced today that it has formed Bregal Sagemount I, L.P., a new private equity fund with $500 million in committed capital. Bregal Sagemount will be led by Gene Yoon, the former head of private equity for Goldman, Sachs’ Americas Special Situations Group and a Partner with Great Hill Partners.

Bregal Sagemount will invest from $15 million to $75 million in companies active in the business services, software and technology-enabled businesses, information and media, financial services and healthcare sectors. By co-investing with Bregal Investments, Bregal Sagemount can invest up to $150 million per transaction. The fund will take control and non-control positions, and will make equity and/or junior debt investments. Bregal Sagemount is based in New York, NY (www.bregalsagemount.com).

“We are pleased to back Gene and his team in forming Bregal Sagemount,” said Louis Brenninkmeijer, Co-Chairman of Bregal Investments. “Their strategy of providing flexible capital to defensible growth companies should continue to provide compelling risk-adjusted returns throughout market cycles. Backing another world-class manager with a differentiated approach is another logical step in expanding our global private equity platform. We are confident their experience and previous success will serve us and the companies they invest in well.”

Bregal Investments is the corporate investment business of Cofra Holding AG, a sixth-generation family holding company based in Switzerland. Cofra Holding’s other businesses include C&A, a clothing retail organization, and Redevco, a large real estate enterprise. Bregal invests directly in equity capital in public and private situations and in private equity funds. Bregal has invested over $9 billion since its inception. The firm was founded in 2002 and has offices in New York and London (www.bregal.com).

“Bregal represents the ideal partner for launching this new venture,” said Mr. Yoon, Managing Partner of Bregal Sagemount. “Their sizable commitment to our debut fund enables us to start at a meaningful scale. The structure also provides us a unique competitive advantage, allowing us to provide flexible capital to the marketplace of growth companies. We will treat these companies as personal clients, and we seek to meet their unique capital needs with highly creative solutions that position them for long-term value creation. I would like to thank our partners at Bregal Investments for their confidence and look forward to working with them to further expand their impressive private equity platform.”

Salus Capital Partners Backs Frederick’s of Hollywood Group

by

Salus Capital Partners has provided a $24 million senior-secured working capital facility to Frederick’s of Hollywood Group, a specialty retailer of intimate women’s apparel and lingerie. The financing will be used to provide working capital for general corporate purposes.

“Salus showed a genuine interest in developing a credit line for Frederick’s of Hollywood that would replace our existing debt facilities and also support our company’s growth. It is important to have a lender such as Salus that has taken the time to understand our business and growth strategy,” said Thomas Lynch, the company’s Chairman and Chief Executive Officer.

“The Frederick’s of Hollywood credit facility exemplifies our broad capabilities and entrepreneurial approach to credit risk at Salus,” said Andrew Moser, President of Salus Capital. “As a subsidiary of Harbinger Group, we collaborate as a team, keenly aware of the challenges in today’s credit environment, yet mindful of our experience in supporting iconic consumer brands. We are thrilled to partner with Frederick’s and look forward to a long-standing relationship.”

Salus Capital is a provider of senior secured asset-based loans to the small and middle-market across a variety of industries with additional complementary financing throughout the capital structure. Commitments range from $3 million to $30 million with the ability to lead and agent larger transactions. Industries of interest include manufacturing; jewelry; specialty retail; niche distribution; services industries; wholesale apparel and garment; commercial supply chain; internet; direct marketing & catalog; energy; transportation; and consumer receivables. The firm is based in Needham, MA (www.saluscapital.com).

Sterling Partners Acquires Tribeca Flashpoint Media Arts Academy

by

Sterling Partners has acquired a majority stake in Tribeca Flashpoint Media Arts Academy (TFA), a digital media arts college. TFA has been led by veteran high-tech entrepreneur Howard Tullman, its president and CEO, since it began operations in 2007. “Sterling Partners’ education expertise, tremendous resources and capital support will enhance and expand TFA’s ability to train tomorrow’s innovators and leaders in digital media. The digital revolution impacts businesses across the globe – whether it’s consumer goods, media, education, medicine, gaming, music, animation, film and broadcast, visual effects or visual communications,” said Mr. Tullman.

Tribeca Flashpoint Media Arts Academy, a digital media arts college, offers a two-year, career-focused program leading to an associate degree in disciplines including Film & Broadcast, Game & Interactive Media, Recording Arts, Animation & Visual Effects and Graphic Design & Visual Communication. TFA is accredited by the American Council for Independent Colleges and Schools. TFA has achieved strong placement rates across each of its core disciplines. Graduates have taken jobs with such companies as Disney, NBC Universal, Nickelodeon and a variety of other leading media and advertising companies. The school has a downtown Chicago campus and two other learning sites (www.tfa.edu).

“We are very excited to partner with Sterling Partners to continue to build out the vision for TFA,” said Craig Hatkoff, co-founder of Tribeca Enterprises, the parent company of Tribeca Educational Ventures LLC and the Tribeca Film Festival. Tribeca Enterprises became an investor in TFA in 2010.

“This important partnership between Tribeca Flashpoint Academy and Sterling Partners will arm our young people with the tools to find quality jobs and launch careers in a rapidly evolving digital world, and is the kind of initiative that will help cement Chicago’s position as a hub for exceptional educational institutions for higher learning,” said Rahm Emanuel, the mayor of Chicago.  “Investments like this one — where Chicago-based private equity firms are investing in Chicago institutions — are important to the city’s future economic success.”

Sterling Partners invests growth capital in industries with positive, long-term trends and provides ongoing support to management through a dedicated team of industry veterans, operators, strategy experts and human capital professionals. Sectors of interest include education, healthcare and business services. The firm has offices in Chicago, IL; Baltimore, MD; and Miami, FL (www.sterlingpartners.com).

“Educational institutions today must provide their students with the technical and critical-thinking skills required to succeed in a workplace that’s increasingly changing, and Tribeca Flashpoint Academy does just that,” said Jason Rosenberg, a Sterling principal. “We are thrilled to partner with the management team led by Howard Tullman as well as with the existing investors, to continue building a world-class program at one of the nation’s leading digital media arts schools.”

Arsenal Capital Acquires Copernicus Group Institutional Review Board

by

Arsenal Capital Partners announced today the acquisition of Copernicus Group Institutional Review Board, a provider of compliance services in the clinical trial process for new drugs and medical devices. Dr. Donald Deieso, Operating Partner and Co-Head of Arsenal’s Healthcare Group will become Executive Chairman of Copernicus IRB.

Earlier this year, Arsenal acquired Western Institutional Review Board, a global IRB to major research institutions. “WIRB and Copernicus will continue to serve their unique client segments through separate organizations and management,” said Dr. Deieso. “We are committed to applying Arsenal’s financial resources, executive experience, and industry relationships in assisting each company fulfill their respective growth strategies.”

Copernicus IRB, established in 1996, is a provider of federally mandated IRB panels. The primary responsibility of IRBs is to ensure that the rights and welfare of human research subjects are protected. IRBs must review and approve the handling of research protocols and study-related information before research involving human subjects can begin and throughout the study thereafter. The company, with offices in the US and affiliates in Canada, provides review services primarily to clinical research organizations (CROs) and major drug and medical device sponsors throughout North America. The company is based in Durham, NC (www.cgirb.com). “Copernicus is a highly regarded provider of critical compliance services that ensure the ethical conduct of research by global clinical research organizations. The company has a well-deserved reputation as the most technologically advanced central IRB in the world,” said Stephen McLean, a Partner at Arsenal and Co-Head of the firm’s Healthcare Group. “Our team of healthcare executives looks forward to collaborating with Copernicus in furtherance of its mission to benefit all of the constituencies that depend upon safe and effective progress of pharmaceutical research.”

Arsenal Capital Partners makes investments in middle-market specialty industrial, healthcare and financial services companies with $50 million to $400 million in enterprise value. The firm invests in niche industry sectors where it has prior experience and where its operating resources can help facilitate incremental growth and margin improvement. Industries of specific interest include: specialty & fine chemicals; segments of healthcare; transportation and logistics; power generation; aerospace & defense; process industry components and services; and financial services. Arsenal currently has $800 million of committed equity capital and is based in New York, NY (www.arsenalcapital.com).

KPS Capital Partners Acquires Siac do Brasil

by

KPS Capital Partners has announced that its portfolio company International Equipment Solutions (“IES”) has acquired Siac do Brasil Ltda. (“Siac”) from SIAC S.p.A. This is the third acquisition by IES since its formation. KPS formed IES in September 2011 as a platform for investments serving the construction, agriculture, landscaping, infrastructure, recycling, demolition, mining, and energy industries. At that time, KPS also announced IES’s first two acquisitions, Paladin Brands Holding and Crenlo from Dover Corporation. In November 2011, Mr. Stephen Andrews was retained as Chief Executive Officer of IES to lead the integration of IES’ first two acquisitions and to aggressively grow and globalize the company.

“The launch of IES has exceeded all of our expectations. In a brief nine months, we have created the leading independent engineered equipment company in the Western Hemisphere, completing three highly synergistic acquisitions and successfully transforming a purely U.S. company into a global competitor,” said Raquel Palmer, a Partner at KPS. “We are very excited about cooperating with SIAC and together our companies will p
rovide our customers with global manufacturing and service solutions. We look forward to continuing to aggressively grow IES through acquisitions around the world.”

Siac do Brasil is a manufacturer of cab enclosures and also manufactures locomotive cabs as well as complex fabrications for off-highway machinery, and its customers include original equipment manufacturers involved in the construction, infrastructure, mining, forestry and agriculture industries (www.siac.com.br).

International Equipment Solutions (IES) is an engineered equipment platform serving the construction, agriculture, landscaping, infrastructure, recycling, demolition, mining, and energy markets. IES operates through six operating units, including Paladin, Genesis, Pengo and Jewell, all of whom are leading manufacturers of engineered attachment tools for operator driven equipment, Crenlo, a leading North American manufacturer of cab enclosures for operator-driven equipment as well as specialty electronic enclosures, and Siac do Brasil, a supplier of heavy equipment cab enclosures and locomotive sub-assemblies in the South American market. IES’ customers include major OEMs, national rental fleet companies and hundreds of independent and OEM-aligned dealers. IES employs over 2,500 people and operates 15 manufacturing facilities in the United States, Germany, and Brazil. The company is based in Oak Brook, IL (www.iesholdings.com).

“The acquisition of Siac do Brasil is a critical strategic step in the growth and globalization of IES. We are very impressed with the company’s rapid growth trajectory, customer base, quality and technical capabilities. The acquisition not only expands many of our current North American OEM supply partnerships into the Brazilian market, but further broadens our customer base as well. Additionally, the acquisition introduces IES as an important supplier in the rapidly growing Brazilian locomotive market,” said Steve Andrews, Chief Executive Officer of IES.

“As demonstrated with this acquisition, IES will continue our commitment toward supporting our customer’s global expansion initiatives with localized supply, technical resources and parts and service support. IES intends to invest significant additional capital and resources into Siac do Brasil to ensure the highest level of production quality for our customers and to increase capacity not only for cabs, but to support the growth of IES’ attachment tools product lines in South America as well. IES has made tremendous progress in our first nine months and I believe our future is very bright.”

SIAC S.p.A. is one of the largest global manufacturers of cab enclosures. In particular, SIAC S.p.A. specializes in the design and manufacture of driver units, complete cabs and components for earth moving and agricultural machinery and equipment. SIAC S.p.A. serves original equipment manufacturers through operations based in Italy, Slovenia, Bosnia, Brazil and India. The company was founded in 1966 and is headquartered in Bergamo, Italy (www.siac-cab.eu).

Financing for the transaction was provided by a syndicate of institutional investors agented by Regiment Capital Advisors and PNC Bank.

KPS Capital Partners is the manager of the KPS Special Situations Funds, a group of private equity funds with over $2.9 billion of committed capital focused on investing in restructurings, turnarounds and other special situations. KPS has created new companies to purchase operating assets out of bankruptcy; established stand-alone entities to operate divested assets; and recapitalized highly leveraged public and private companies. The KPS investment strategy targets companies with strong franchises that are experiencing operating and financial problems. The firm is located in New York, NY (www.kpsfund.com).