Archives for September 20, 2012

Harvest Partners Has Final Close at $1.1 Billion

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Harvest Partners has held a final closing on its latest fund, Harvest Partners VI, L.P., at $1.1 billion. Harvest’s previous fund, Harvest Partners V, L.P., closed in 2007 at $816 million.

HP VI will continue the firm’s 31 year history of partnering with management teams to invest in North American companies in the business and industrial services, manufacturing and distribution, healthcare, midstream energy, and consumer products and retail sectors.

The closing of HP VI increases the amount of invested and committed capital under Harvest’s management to approximately $2 billion. Investors in HP VI include domestic and international public and private pension funds, fund of funds, insurance companies, a sovereign wealth fund, financial institutions and individuals. HP VI included many existing investors from previous Harvest funds and also a number of first-time investors.

“We are pleased and grateful that many of our existing limited partners are continuing to invest with Harvest in our new fund. We thank them for their loyalty and confidence in our ongoing ability to identify and invest in attractive middle market companies,” said Harvest Senior Managing Director Thomas Arenz. “Our goal is to work closely with the management teams of these businesses to build them into well-positioned, leading companies in their industries which in turn generate attractive investment returns for our limited partners. We look forward to deploying the new fund in the same disciplined and focused manner as our prior funds.”

To date, HP VI has invested in DTI, a provider of outsourced litigation support services, and Driven Brands, a franchisor in the automotive aftermarket services industry. Both investments were completed in late 2011.

Credit Suisse Securities (USA) served as an exclusive placement agent for HP VI and Paul, Weiss, Rifkind, Wharton & Garrison acted as legal counsel.

Harvest Partners invests in management buyouts and growth financings. Sectors of interest include business and industrial services, manufacturing and distribution, healthcare, midstream energy, and consumer products and retail sectors. The firm was founded in 1981 and is based in New York (www.harvpart.com).

© 2012 PEPD • Private Equity’s Leading News Magazine • 9-20-12

Abacus Finance Backs Latest DW Healthcare Partners’ Acquisition

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Abacus Finance Group served as Administrative Agent and Sole Lead Arranger of $25 million in senior cash-flow financing to support the leveraged buyout of Z-Medica Corporation by DW Healthcare Partners. In addition to providing the financing, Abacus, which focuses exclusively on providing cash-flow financing for private equity-sponsored, lower-middle market companies, made an equity co-investment in Z-Medica.

Z-Medica Corporation is a medical products company that develops hemostatic agents used to promote blood clotting in order to quickly stop severe, life threatening bleeding. The company’s products, marketed primarily under the QuikClot brand, are used by healthcare professionals, first responders, law enforcement officers and the military. Z-Medica was founded in 2002 by Francis Hursey and is based in Wallingford, CT (www.z-medica.com).

Abacus Finance targets debt financing opportunities of up to $50 million with a typical hold size ranging from $10 million to $25 million. The companies the firm finances generally have EBITDA between $3 million and $15 million. Abacus is sponsored by New York Private Bank & Trust, the holding company for Emigrant Bank, founded in 1850, the largest privately held bank in America with approximately $10 billion in assets. The firm is based in New York (www.abacusfinance.com).

“DW Healthcare Partners’ exclusive focus on healthcare is a perfect match for us in terms of both our investment focus and our prior transaction experience,” said Tim Clifford, President and CEO of Abacus. “DWHP brought us a profitable and growing company in Z-Medica, a market leader with an impressive management team which will be led by Larry Hicks, a seasoned healthcare executive. What was especially important to both DWHP and Z-Medica was our substantial experience within healthcare, being easy to work with, and our flexibility in structuring this financing – all important aspects of what we call our Total Partnership Approach.”

DW Healthcare Partners is a private equity firm focused exclusively on the healthcare industry. The firm manages over $465 million in committed capital and invests in profitable healthcare companies with proven management teams. The firm is located in Park City, Utah (www.dwhp.com).

“This was a new relationship for us,” said Doug Schillinger, a Managing Director of DW Healthcare Partners, “and it proved to be a terrific one. The team at Abacus responded quickly, was tremendously enthusiastic, and gave us certainty of a close early on. They are definitely a firm we will turn to going forward.”

Zions Bank participated in the financing of the transaction, CMC Consulting acted as financial advisor to Z-Medica, and Goulston & Storrs provided legal counsel to Abacus.

© 2012 PEPD • Private Equity’s Leading News Magazine • 9-20-12

Mill City Capital Adds to Team

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Mill City Capital has expanded its investment team with the hiring of Dianna Seltz as a new Investment Associate

Ms. Seltz was previously an Investment Analyst with middle market investment bank, Lazard Middle Market, in New York where she provided sell-side transaction advisory services to clients in various industries. She graduated with honors from the Leonard N. Stern School of Business at New York University.

Mill City Capital invests from $10 million to $30 million in companies with EBITDA of $7.5 million to $25 million. Enterprise values are typically from $50 million to $150 million. Sectors of interest include engineered industrial products; industrial services; transportation & distribution; agribusiness & food ingredients; food and consumer products & services; and restaurants & retail. The firm is base in Minneapolis (www.millcitycapital.com).

© 2012 PEPD • Private Equity’s Leading News Magazine • 9-20-12

Empire Investment Holdings Acquires CSS Studios

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Empire Investment Holdings has acquired CSS Studios, a post production sound company, from Discovery Communications.

CSS Studios, through seven subsidiaries, provides post production sound services to motion picture studios, independent producers, broadcast networks, cable channels, advertising agencies and interactive producers. CSS is comprised of Todd-AO, Soundelux, Sound One, Modern Music, POP Sound, Soundelux Design Music Group, and The Hollywood Edge. The company operates out of nine facilities located in Los Angeles and New York (www.css-studios.com).

“We look forward to partnering with the team at Empire, as we focus on continuing to build on the body of award winning work created by the best talent in the industry,” said Robert Rosenthal, president at CSS Studios.

Empire Investment Holdings invests in public and private companies located anywhere in the world that have revenues of at least $25 million and are active in the following sectors: technology; business services; niche manufacturing; and distribution. The firm is based in Miami, FL (www.empireih.com).

“Our team is energized to begin working with the management team and the creative talent within each business,” said David Alfonso, Empire’s chairman and chief executive officer. “We will build upon the successes that the team of creative editorial and mixing talent has created over the years, while promoting an environment that will continue to set the standard and produce award winning results.”

Discovery Communications is the world’s #1 nonfiction media company reaching more than 1.8 billion subscribers in 209 countries and territories. Brands include Discovery Channel, TLC, Animal Planet, Science and Investigation Discovery, as well as US joint venture networks such as the Oprah Winfrey Network, The Hub and 3net. The company is based in New York (www.discoverycommunications.com).

Peter J. Solomon Company acted as financial advisor and Proskauer Rose acted as legal advisor to Discovery Communications.

© 2012 PEPD • Private Equity’s Leading News Magazine • 9-20-12

Weston Presidio Invests in Digital Intelligence Systems

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Weston Presidio has made a $20 million growth equity investment in Digital Intelligence Systems, a provider of IT professional services.

Digital Intelligence Systems (DISYS) is a provider of IT professional services including IT staffing and consulting, finance and professional services, ERP services, and infrastructure support services. The company was recently recognized by Staffing Industry Analysts as the 2nd fastest-growing IT firm among U.S. companies exceeding $100 million in revenue. In 2012, DISYS is expected to generate over $300 million in revenue and has maintained a 30% annual growth rate over the last five years. The company is based in McLean, VA (www.disys.com).

Weston Presidio has over $3.3 billion under management and invests in management buyouts, growth equity investments, and recapitalizations in a variety of industries, including consumer products and retail, manufacturing and industrial, media, services, and technology. Weston Presidio was founded in 1991 and has offices in Boston and San Francisco (www.westonpresidio.com).

Clearsight Advisors served as the exclusive strategic and financial advisor to Digital Intelligence Systems. Clearsight Advisors provides M&A and capital raising services to growth-oriented business and technology services companies. Clearsight serves the software, services and data markets with vertical expertise in financial technology, public sector technology and education technology. The firm is based in McLean, VA (www.clearsightadvisors.com).

“The Clearsight team delivered on their promise. They brought exceptional industry insight and creativity to the table, and worked tirelessly on our behalf to find DISYS the right financial partner. I could not have picked a better team to advise us on this mission critical transaction”, said Mahfuz Ahmed, CEO of DISYS.

© 2012 PEPD • Private Equity’s Leading News Magazine • 9-20-12

Tregaron Capital Exits Economic Modeling

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Tregaron Capital has sold its portfolio company, Economic Modeling (EMSI), a provider of employment data and economic analysis to Career Builder. Tregaron Opportunity Fund I, which acquired EMSI in February 2010, realized a 6.8x return on the fund’s investment in the company.

EMSI is a provider of employment data and economic analysis via web tools and custom reports, producing impact analysis for colleges and universities throughout the US and internationally. The company has 40 employees and is based in Moscow, ID (www.EconomicModeling.com).

Tregaron Capital was formed in 2001 to invest in small and medium-size companies with EBITDA between $1 million and $5 million that are based in the western United States. The firm makes both mezzanine debt and equity investments, typically in amounts from $2 million to $5 million. Tregaron Capital is based in Palo Alto, CA (www.tregaroncapital.com).

To date, Tregaron Opportunity Fund I, which was established in 2010 with $65 million in capital under management, has achieved over a 40% per year compounded net annual return on capital, including five debt and/or equity investments.

© 2012 PEPD • Private Equity’s Leading News Magazine • 9-20-12

Comvest Acquires FMI Products

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The Comvest Group, through its portfolio company Lennox Hearth Products, has acquired FMI Products, a designer and manufacturer of gas and wood fueled hearth products. As part of this transaction FMI Products will merge with Lennox Hearth Products to create a new platform company called Innovative Hearth Products.

Innovative Hearth Products is a manufacturer of indoor and outdoor fireplaces, fireplace inserts, free-standing stoves, gas log sets, accessories and venting products for the specialty retail, residential new construction and industrial markets. The company has manufacturing plants in Auburn, WA; Union City, TN; Russellville, AL; Santa Ana, CA; and Laval, Quebec (www.lennoxhearthproducts.com) (www.fmiproducts.com).

“I am very excited to work to bring these two great companies together. The product offerings of the combined businesses are highly complementary and with manufacturing in both the east and the west, we will be even better able to serve our customers. I believe that the combination will be a true leader in the hearth industry,” said Mark Klein, CEO of Innovative Hearth Products.

The Comvest Group provides debt and equity to middle-market companies. For debt investments the firm will invest from $2 million to $20 million per transaction in companies with $10 million to $200 million of revenue that have positive or negative EBITDA. For equity investments the firm will invest from $10 million to $50 million per transaction in companies with $15 million to $500 million of revenue that have positive or negative EBITDA. Since 2000, Comvest has invested more than $1.6 billion of capital in over 110 public and private companies worldwide. The firm is based in West Palm Beach, FL (www.comvest.com).

“We look forward to backing a combined management team of veteran hearth industry executives. We are very pleased with the performance of our investment in Lennox Hearth Products and are investing additional capital to accelerate our growth in the hearth industry,” said John Caple, a Managing Director with Comvest.

© 2012 PEPD • Private Equity’s Leading News Magazine • 9-20-12

Leeds Equity Partners Acquires Evanta Ventures and Sports Leadership Institute

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Leeds Equity Partners has signed an agreement to acquire Evanta Ventures and Sports Leadership Institute from DMG Events, a subsidiary of Daily Mail and General Trust. “Leeds Equity Partners is excited to partner with Bob Dethlefs and the management team at Evanta and Sports Leadership Institute,” said Jeffrey Leeds, President and Co-Founder of Leeds Equity Partners. “Through exceptional vision and hard work, Bob and his team have built a differentiated platform with which to engage and support senior executives in business and sports.”

Evanta is a producer of 80 leadership forums and provides educational services for executives in the functional areas of technology, security, human resources, finance, and healthcare. Evanta provides leadership development programs in partnership with MIT Sloan School of Management, University of Texas McCombs School of Business, University of Chicago Booth School of Business and UC Berkeley Haas School of Business. The company was founded in 2003 and is based in Portland, OR (www.evanta.com).

The Sports Leadership Institute is a producer of forums for professional and collegiate sports team executives. The Global Sports Summit, Global Sports Management Invitational and Collegiate Sports Summit bring together owners, managers, athletic directors and other stakeholders within the professional and collegiate sports sectors. The company was founded in 2011 and is based in Portland, OR (www.globalsportssummit.com) (www.gsminvitational.com).

“Our entire team looks forward to working closely with Leeds Equity to continue to serve our existing communities as well as developing new platforms and offerings,” said Evanta’s Founder and CEO, Bob Dethlefs. “Leeds Equity not only has the resources, but also the insights and industry relationships to enable Evanta to pursue initiatives that will accelerate our growth going forward. We are proud to join a renowned industry leader in the education and information services industries. This is a bold new future that will enable us to go beyond the realm of possibility.”

 Leeds Equity Partners manages the largest private equity fund in the United States focused on investments in the education, training and business services industries. Founded in 1993, the firm has raised and managed over $1 billion of committed capital and invested in more than 20 companies. The firm is located in New York, NY (www.leedsequity.com).

© 2012 PEPD • Private Equity’s Leading News Magazine • 9-20-12