Archives for October 30, 2012

Lincoln International Completes another Emissions & Exhaust Transaction

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With the recent closing of the sale of GT Exhaust to Industrial Acoustics Company, a portfolio company of AEA Investors, Lincoln International has now closed five emissions and exhaust transactions since the start of 2009. GT Exhaust was a portfolio company of CID Capital.

Lincoln International acted as the exclusive financial advisor to GT Exhaust, working closely with the company’s senior management team and CID Capital throughout the sale process. This included providing advisory expertise and managing the marketing, negotiation and due diligence phases of the transaction.

GT Exhaust is a provider of sound and emissions control products to the North American energy, power and heavy transportation industries. The company’s product line, which includes silencers, catalytic converters, diesel particulate filters and related accessories, is used in new installation and retrofit applications for large stationary engines. The company was founded in 1978 and is based in Lincoln, NE (www.gtexhaust.com).

Last year, Lincoln advised on the sale of Cummins’ Exhaust division to Global Tube, a portfolio company of Wind Point Partners, and Saffil, a subsidiary of Dyson Group, to Unifrax. In 2010, Lincoln advised on the sale of Wendt SIT to Pinova Capital, and in 2009, advised Delphi on the sale of its Global Exhaust business to Bienes Turgon. According to Lincoln, these transactions generated very strong strategic interest and valuations to match making Lincoln a leading advisor in the exhaust and emissions space.

Lincoln International specializes in merger and acquisition advisory services, debt advisory services, private capital raising and restructuring advice on mid-market transactions. Lincoln International also provides fairness opinions, valuations and pension advisory services on a wide range of transaction sizes. With thirteen offices in the Americas, Asia and Europe, Lincoln International has strong local knowledge and contacts in key global economies. The firm provides clients with senior-level attention, in-depth industry expertise and integrated resources. The firm is based in Chicago, IL (www.lincolninternational.com).

© 2012 PEPD • Private Equity’s Leading News Magazine • 10-30-12

The Chicago Corporation Advises Hinda on Sale to Gridiron Capital

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The Chicago Corporation has advised Hinda, a provider of customer incentive programs, in its sale to TharpeRobbins Company, a portfolio company of Gridiron Capital.

The Chicago Corporation marketed the Hinda to a select group of industry and private equity buyers and hosted nearly 10 management presentations. After receiving multiple offers, Hinda selected Gridiron/TharpeRobbins because of its full valuation; the opportunity to reinvest in the new company and share in its future successes; as well as the excellent cultural fit between the two companies.

Hinda is a provider of incentive programs used to reward customer loyalty, encourage top sales performance, influence employee behavior and motivate company dealers and distributors. Hinda has revenues of approximately $115 million. The company was founded in 1970 and is based in Chicago (www.hinda.com).

The Hinda acquisition gives TharpeRobbins meaningful scale and related purchasing economies, numerous cross marketing opportunities and the ability to rationalize redundant overhead. “This strategic merger combines the strengths of two companies built on innovation, customer service and flexibility,” said Brett Tharpe, Chief Executive Officer of TharpeRobbins.

TharpeRobbins provides managed recognition and rewards services. The company offers consultative expertise to help organizations design human resources programs that drive higher levels of employee engagement and fulfillment. Its programs include products ranging from personalized jewelry to fine art, electronics, sports and outdoor merchandise. The company is located in Statesville, NC (www.tharperobbins.com). Gridiron Capital acquired TharpeRobbins from Saugatuck Capital in April 2010.

The Chicago Corporation is an investment banking firm focused on providing middle-market companies with a range of financial and corporate advisory services including merger and acquisitions, institutional debt and equity capital raising, and financial restructuring. The firm is based in Chicago (www.thechicagocorp.com).

© 2012 PEPD • Private Equity’s Leading News Magazine • 10-30-12

KPS Capital Partners Exits North American Breweries

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KPS Capital Partners has signed an agreement to sell its portfolio company, North American Breweries Holdings, to Cervecerίa Costa Rica, a subsidiary of Florida Ice and Farm Company, for $388 million in cash.

North American Breweries Holdings (NAB) is one of the largest independently owned beer companies in the United States and the owner of a portfolio of brands including Labatt, Genesee, Seagram’s Escapes, Magic Hat, Pyramid, the Original Honey Brown Lager, Dundee and MacTarnahan’s. NAB operates four breweries and seven retail locations located in New York, Vermont, California, Oregon and Washington. NAB is headquartered in Rochester, NY (www.nabreweries.com).

KPS formed NAB in February 2009 as a platform for investments and growth in the North American beer and malt beverage industries. At that time, KPS also announced NAB’s first three acquisitions: Labatt USA from a subsidiary of Anheuser-Busch InBev; substantially all of the assets of High Falls Brewing Company (now known as the Genesee Brewing Company); and a perpetual license for the Seagram’s Escapes and Seagram’s Smooth brands from Pernod Ricard USA. In 2010, NAB acquired Independent Brewers United, one of the largest craft brewers in the United States, and owner of the Magic Hat, Pyramid and MacTarnahan’s brand families of craft beer.

“In forming NAB, KPS did not buy or invest in a company; rather we created a new company that became one of the largest and fastest growing independent beer companies in the U.S. NAB is a complete validation of the KPS investment strategy of seeing value where others do not, buying right, making businesses better and creating value for our investors. We take immense pride in what NAB has accomplished,” said Raquel Palmer, a Partner of KPS. “We congratulate and thank the NAB management team for their extraordinary tactical execution of our vision, which resulted in the Company’s significant revenue growth year after year and the eventual acquisition by a leading international strategic buyer.”

UBS Securities acted as financial advisor to KPS and NAB with respect to the transaction. Jenner & Block served as legal counsel to NAB and Paul, Weiss, Rifkind, Wharton & Garrison served as legal counsel to KPS.

KPS Capital Partners is the manager of the KPS Special Situations Funds, a group of private equity funds with over $2.5 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. KPS portfolio companies, as of September 30, 2012, have aggregate annual revenues of approximately $7.2 billion, operate 89 manufacturing plants in 25 countries, and employ over 30,000 associates, directly and through joint ventures worldwide.  KPS Capital Partners is headquartered in New York (www.kpsfund.com).

© 2012 PEPD • Private Equity’s Leading News Magazine • 10-30-12

Clarion Capital Partners Exits Strategic Outsourcing

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TriNet, a cloud-based provider of on-demand HR services and a portfolio company of General Atlantic, has acquired Strategic Outsourcing, a provider of outsourced HR services and a portfolio company of Clarion Capital Partners.

The combined organization is now the largest independent professional employer organization and provides human resources services to more than 160,000 work site employees across a broad spectrum of industries.

Strategic Outsourcing is a professional employer organization which provides human resources outsourcing to small- and medium-sized businesses. The company specializes in payroll administration, safety and risk management, workers’ compensation, human resource administration, compliance, and benefits administration. The company was founded in 1995 and is based in Charlotte, NC (www.soi.com).

Strategic Outsourcing will maintain its name, brand, current products and services, and senior management team, including CEO Carl Guidice. “Strategic Outsourcing owes its significant success to our employees and their unwavering dedication to our clients,” said Mr. Guidice. “Joining forces with TriNet will allow two of the industry’s strongest professional employer organizations to come together, improving our ability to serve current and future clients with an enhanced portfolio of complementary products and services. We’re enthusiastic about working together to deliver a new level of offerings and service to our clients, and we are excited about the new opportunities as our two organizations come together.”

TriNet is a cloud-based provider of on-demand HR services to small businesses, providing critical HR-related services on an outsourced basis. Service areas include human resources, benefits, payroll, workers’ compensation, and human capital services. The company is based in San Leandro, CA (www.trinet.com).

Clarion Capital Partners is a middle market private equity firm that invests from $15 million to $50 million in companies that have EBITDAs greater than $10 million. Sectors of interest include: business services; healthcare services; specialty financial services; consumer products; specialty retail; and media & entertainment. Clarion is based in New York (www.clarion-capital.com).

General Atlantic is focused on providing capital and strategic support to growth companies. The firm was founded in 1980 and manages approximately $17 billion in capital. General Atlantic has more than 75 investment professionals based in Greenwich, CT; Palo Alto, CA; London; Düsseldorf; Hong Kong; Beijing; Mumbai; and São Paulo (www.generalatlantic.com).

© 2012 PEPD • Private Equity’s Leading News Magazine • 10-30-12

OMERS Private Equity Exits Cookie Jar Entertainment

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DHX Media, a producer, distributor and licensor of children’s entertainment content, has acquired Cookie Jar Entertainment, a provider of children’s entertainment products and a portfolio company of OMERS Private Equity.

Cookie Jar creates, produces and markets animated and live-action children’s programming. Its library of nearly 6,000 half-hour episodes of television features some of the world’s most recognizable series including Caillou, Inspector Gadget, Arthur, The Doodlebops and Johnny Test. The company controls Cookie Jar TV, the weekend morning block on CBS, and has a one-third interest in international children’s television channel KidsCo. Cookie Jar had approximately $57 million in revenue for the 12 months ending May 31, 2012. The company is based in Toronto (www.cjar.com).

DHX Media is a leader in the creation, production and licensing of family entertainment rights. DHX Media owns, markets and distributes over 8,000 half hours of children’s entertainment content, and exploits owned properties through its consumer products licensing business. The company is recognized for brands such as Caillou, Busytown Mysteries, Inspector Gadget, Johnny Test, Animal Mechanicals, Kid vs. Kat, Super WHY!, Rastamouse, and Yo Gabba Gabba. DHX Media has offices in Toronto, Los Angeles, Vancouver, Halifax, London, Paris, Barcelona, Lisbon, Milan, Munich, and the Netherlands (www.dhxmedia.com).

OMERS Private Equity manages the private equity activities of OMERS, one of Canada’s largest pension funds. The group’s investment strategy includes the active ownership of businesses in North America and Europe. Sectors of interest include manufacturing, financial and business services, industrial and consumer products, transportation, and technology. Investment sizes range from $100 million to $500 million. The firm is located in Toronto with offices in New York and London and has $6.5 billion of investments under management (www.omerspe.com).

© 2012 PEPD • Private Equity’s Leading News Magazine • 10-30-12

The Carlyle Group Acquires Diversey Japan

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The Carlyle Group and Sealed Air Corporation have entered into an agreement whereby the Carlyle Group will sponsor the management buyout of Diversey G.K. (“Diversey Japan”), a provider of cleaning, sanitation and hygiene products and services. The equity for this investment will come from Carlyle Japan Partners II.

Diversey Japan is a provider of cleaning, sanitation and hygiene products and services to institutional customers in the Japanese market. The company serves end-users in the building maintenance, retail, food service, hotel, health care, and food, dairy and beverage sectors. Diversey Japan differentiates itself in the industry as a total solution provider, combining detergents, equipment and services while also leveraging its specialized know-how to meets its customers’ various needs. The company is based in Yokohama, Japan (www.diversey.co.jp).

Mr. Toshiro Misumi, Executor of Diversey G.K., will assume the position of President and Chief Executive Officer upon closing and take the helm at the newly independent Diversey Japan.

“Diversey Japan has a preeminent position in Japan’s stable cleaning and sanitation market. With its competitive line-up of products and solutions as well as its strong sales network, we believe the company will continue its significant growth in the future,” said Tamotsu Adachi, Managing Director of The Carlyle Group and Co-head of its Japan Buyout Group. “Diversey Japan’s competitive positioning and high growth potential, combined with its unique business model as a total solution provider, have led us to invest in its future development. We look forward to partnering with Mr. Misumi and the rest of the talented new management team and intend to provide our fullest support to Diversey Japan. Furthermore, we will endeavor as a private equity sponsor to provide support in terms of both business strategy and capital, so that Diversey Japan can achieve a new growth story for the future under the new management structure.”

The Carlyle Group invests in buyouts, growth capital, real estate and leveraged finance in Africa, Asia, Australia, Europe, North America and South America focusing on aerospace & defense, automotive & transportation, consumer & retail, energy & power, financial services, healthcare, industrial, infrastructure, technology & business services and telecommunications & media. The firm is based in Washington, DC (www.carlyle.com).

© 2012 PEPD • Private Equity’s Leading News Magazine • 10-30-12