Archives for November 7, 2012

Carlyle Raises $1.1 Billion Fund for Middle Market Buyouts

by

The Carlyle Group has raised a new $1.1 billion fund, Carlyle Equity Opportunity Fund, to make control investments in middle market companies requiring equity capital of $25 million to $150 million per transaction.  The fundraising effort exceeded Carlyle’s goal of $1 billion.

“We are gratified by the strong investor demand for this fund, particularly given the challenging fundraising market.  We see incredible opportunities in this large and under-served market and have a great team to pursue them,” said Rodney Cohen, Managing Director and Co-head of the U.S. middle market investment team. “The fund is off to a great start, with four investments in thriving middle market companies, each of which leverages Carlyle’s industry expertise and global network.”

The Carlyle Equity Opportunity Fund (CEOF) builds on Carlyle’s more than two decades of investing more than $3.4 billion in 64 transactions in the mid-market buyout space.  So far the 14-person CEOF team has invested more than 20% of the fund in four transactions: Philadelphia Energy Solutions (formerly Sunoco Refinery); Dynamic Precision Group, an aerospace component manufacturer; Worldstrides, a provider of educational student travel programs and Service King, the largest collision repair multi-shop operator in Texas and the third largest in the United States.

“Carlyle’s strong, 25-year track record in smaller buyouts, together with the competitive advantages from Carlyle’s global reach, extensive portfolio company holdings and dedicated industry teams, position us to make attractive investments, including our recent investment in Philadelphia Energy Solutions, which saved Sunoco’s Philadelphia refinery,” said Brooke Coburn, Managing Director and Co-head of the U.S. middle market investment team.

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 Carlyle Group employs 1,300 people in 32 offices across six continents and is based in Washington, DC (www.carlyle.com).

© 2012 PEPD • Private Equity’s Leading News Magazine • 11-7-12

Victory Park Capital Backs Latest Acquisition by K.R. Abraham & Co.

by

Victory Park Capital has provided a senior credit facility through its SBIC fund to help finance the acquisition of O. Keller Tool Engineering Company by Chicago-based private equity group, K.R. Abraham & Co. (KRA).

Victory Park Capital (VPC) received final agency committee approval by the U.S. Small Business Administration for its SBIC license last month.  In addition to the credit facility, VPC’s SBIC fund also co-invested in the equity of O. Keller.

“VPC was extremely flexible when structuring their credit facility for the O. Keller transaction. In hindsight, the deal was changing almost weekly due to better-than-expected financial performance right up until we actually closed.  We are very pleased that VPC was able to bring a financial solution to the table that ultimately allowed us to acquire such a great business. We look forward to partnering with them again in the future,” said K. Robin Abraham, President of KRA.

O. Keller is a niche designer and manufacturer of highly-engineered tools, specialty gages, assembly line tools, and fixtures for Fortune 500 OEMs and tier one automotive suppliers.  The company was founded in 1943 and is headquartered in Livonia, MI (www.okeller.com).

“Working in tandem with KRA, we believe we have the operational expertise necessary to continue to position O. Keller for strong financial performance,” said Tom Affolter, a VPC Principal.  “We have great confidence that Brian Van Norman, President of O. Keller, and KRA are the right partners to lead the company through its next phase of growth.”

Victory Park invests from$10 million to $50 million per transaction in small cap public companies and middle market private companies that typically generate less than $150 million in revenue and $30 million of EBITDA. The firm focuses on complex situations and seeks to build long term sustainable value in its companies. Victory Park is based in Chicago and has offices in New York, Boston, and San Francisco (www.victoryparkcapital.com).

K.R. Abraham & Co. seeks to acquire lower middle-market companies with EBITDAs of $1.5 million to $5 million across a range of industries. The firm is based in Chicago (www.krabraham.com).

© 2012 PEPD • Private Equity’s Leading News Magazine • 11-7-12

Sikich Investment Banking Advises Targus on Acquisition of Sena Cases

by

Sikich Investment Banking acted as the exclusive buy-side advisor to Targus Group International on its purchase of Sena Cases, a manufacturer of smartphone cases.  The Sikich team was led by Partner Rick Herbst and Director Susan Tomilo.

Sena is a designer and manufacturer of slim, functional, protective and luxurious genuine leather cases for smartphones, tablets and laptops. The company is based in Irvine, CA (www.targus.com).  Targus is a manufacturer of laptop and mobile device cases and accessories.  The company was founded in 1983 and is based in Anaheim, CA (www.targus.com).

“Targus has long enjoyed strong brand awareness and recognition as a leading provider of high-quality cases and accessories for laptops and mobile devices,” said Michael Hoopis, CEO of Targus. “That said, the continued growth of smartphones and tablets, and our rapidly evolving industry, require us to explore and capitalize on great opportunities to maintain our leadership.  Sikich has helped facilitate that for us with this transaction. The firm’s thoughtful guidance throughout the process made it an invaluable partner in collaborating with us at all stages throughout the process.”

Sikich explored and evaluated potential opportunities for Targus in order to enhance its position and further its leadership within the rapidly-growing tablet and smartphone accessories marketplace.  Sikich collaborated closely with the Targus leadership team to identify and engage with potential strategic partners on an exclusive basis.  Throughout the process, including the ultimate negotiation and execution of this acquisition, Sikich partnered closely with Targus and worked to engage the Sena team, who was not looking to sell the company at the time.

“Our goal is to serve as a strategic partner with our clients and meet their needs in the ways that best enable them to achieve their business and strategic objectives,” said Mr. Herbst.  “Targus holds a very strong position in the industry and this latest transaction adds to that strength and opens up new markets and channels for the company. We are pleased to have partnered with them on this endeavor.”

Sikich Investment Banking is part of Sikich LLP, a multidisciplinary professional services firm with more than 400 employees working out of eight offices located in Illinois, Indiana, Missouri and Colorado.  Sikich Investment Banking is the firm’s corporate finance and advisory practice, and through its wholly-owned subsidiary, Sikich Corporate Finance, it provides capital raising, mergers and acquisitions, and strategic advisory services to middle market clients in the U.S. and abroad.  Sikich Investment Banking is based in Chicago (www.sikich.com/IB).

© 2012 PEPD • Private Equity’s Leading News Magazine • 11-7-12

Cortec Group Acquires Barcodes

by

Cortec Group has acquired Barcodes, a distributor of automatic identification capture products.  The Barcodes acquisition represents Cortec Fund V’s third platform investment.  Cortec Fund V had its final closing in 2011 with $620 million in total committed capital.

Barcodes is a distributor of automatic identification capture (“AIDC”) products, selling primarily to small and medium-sized businesses and select Fortune 500 customers.  Products include barcode scanners, mobile computers, label printers, point-of-sale systems, identification cards, RFID equipment, and other related consumable products. The company was founded in 1994 and is based in Chicago (www.barcodesinc.com).

“Through its unique business model, online lead generation capabilities and value-added customer service, Barcodes is a leader in its market and continues to gain share versus the competition,” said Scott Schafler, a Managing Partner at Cortec.

Daniel Nettesheim, Barcodes’ CEO, will continue in his current position and remain a shareholder.  “We were impressed by Cortec’s approach, including their demonstrated commitment to growth. We are genuinely enthusiastic about this new partnership, both as senior managers of the company and continuing owners in the business,” said Mr. Nettesheim.

Cortec Group invests in middle-market specialty manufacturing, service, healthcare and distribution businesses with enterprise values of $40 million to $300 million. Cortec currently manages over $1 billion in its two active funds. The firm was founded in 1984 and is based in New York (www.cortecgroup.com).

“We are gratified that senior management chose to work with Cortec to realize their near and longer-term objectives,” said David Schnadig, a Managing Partner at Cortec. “We are thrilled to be partnering with a great team and excited to help facilitate and execute multiple growth initiatives.”

© 2012 PEPD • Private Equity’s Leading News Magazine • 11-7-12

Warburg Pincus Exits Scotsman Industries

by

ALI Group, a designer, manufacturer, marketer and servicer of commercial and institutional foodservice equipment, has reached an agreement to acquire Scotsman Industries, the largest commercial ice machine company in the world, from Warburg Pincus.

In May 2009, Warburg Pincus completed the $160 million acquisition of Scotsman Industries from The Manitowoc Company.  The Manitowoc Company had acquired the global ice machine businesses comprising Scotsman Industries as part of its 2008 acquisition of Enodis but was subsequently required to divest the businesses to satisfy regulatory conditions of various jurisdictions related to the Enodis acquisition.

Scotsman Industries is the largest global manufacturer of commercial ice machines with related products including storage bins, ice and water dispensers, industrial ice machines, high-end residential ice machines, blast chillers and commercial refrigeration units. The company’s products are sold under two global brands, Scotsman and Ice-O-Matic, and a number of regional brands.  Scotsman distributes its products in more than 100 countries to a range of end market customers that include quick-service and full-service restaurants, hotels and hospitality venues, health care facilities, food retailers and education, government and military facilities. The company has five manufacturing facilities, over 800 employees, 10 sales offices, 1,000-plus distributors, and more than 5,000 service technicians.  Scotsman Industries is based in Vernon Hills, IL (www.scotsmanindustries.com).

“Chairman and Chief Executive Officer, David McCulloch, and the Scotsman management team have built a terrific business and we are proud to have been associated with them.  We are pleased that they will be joining forces with the ALI Group, a world-class provider in the foodservice equipment industry, which will enable them to build on their success,” said Warburg Pincus’ Managing Director, David Barr.

Warburg Pincus has more than $30 billion in assets under management and has raised 13 private equity funds which have invested more than $40 billion in approximately 650 companies in 30 countries. The firm was founded in 1966 and is headquartered in New York with offices in Amsterdam, Beijing, Frankfurt, Hong Kong, London, Luxembourg, Mauritius, Mumbai, San Francisco, Sao Paulo and Shanghai (www.warburgpincus.com).

The ALI Group designs, manufactures, markets and services a line of commercial and institutional foodservice equipment used by major restaurant and hotel chains, independent restaurants, hospitals, schools, airports, correctional institutions, and canteens.  The Group employs over 7,000 people in 24 countries and has 48 manufacturing facilities in 14 countries and sales and service subsidiaries in Europe, North America, Russia, Japan, China, the Middle East, Australia and New Zealand.  The ALI Group is headquartered in Milan, Italy (www.aligroup.it)

Brookwood Associates acted as financial advisors to the ALI Group.  Alston & Bird acted as legal advisors for the ALI Group.  Willkie Farr & Gallagher acted as legal advisors to Scotsman Industries.

© 2012 PEPD • Private Equity’s Leading News Magazine • 11-7-12

Vestar Capital Partners Exits Sunrise Medical

by

Sunrise Medical, a portfolio company of Vestar Capital Partners, has entered into an agreement to sell its mobility and seating operations to Equistone Partners Europe.  The transaction is expected to close by year-end 2012.

“Our partnership with Vestar has helped the company focus its innovation and operating strengths on the mobility business globally,” said Thomas Rossnagel, CEO of Sunrise Medical. “The corporation holds a very strong market position and the past three years’ financial performance has been outstanding. My team and I are excited about the opportunity to take Sunrise Medical to the next level of performance and significantly expand our global business with support of the new resources from Equistone.”

Sunrise Medical is a global manufacturer, marketer and distributor of high-end custom manual and power wheelchairs and technologically advanced and proprietary seating systems.  Brand names include Quickie, Sopur, Zippie, Breezy, Jay, Sterling and Coopers. Sunrise Medical products are manufactured in North America, Europe, and Asia and are distributed in more than 100 countries around the world. The company was founded in 1983 and has offices in Fresno, CA and Heidelberg, Germany (www.sunrisemedical.com).

In December 2000, Vestar, in partnership with Park Avenue Equity Partners, acquired Sunrise Medical in a going-private transaction. During Vestar’s ownership, Sunrise Medical spun out to shareholders its Joerns Healthcare, DeVilbiss Healthcare and DynaVox Systems divisions.  Joerns and DynaVox were successfully realized in 2010 while Vestar continues as the majority shareholder of DeVilbiss.

“We have had an extraordinarily productive collaboration with Sunrise Medical,” said Dan O’Connell, CEO of Vestar Capital Partners. “We have created value through two successful spin-offs, which allowed Sunrise Medical to streamline and focus its operations and strategy. Thomas Rossnagel has been an exceptional leader and we believe he and his team will continue on their promising path. We at Vestar thank Thomas and his accomplished team at Sunrise for their dedication and excellent performance over the years we have been their investment partner.”

Vestar specializes in management buyouts and growth capital investments. The firm targets companies in the US and Europe with valuations of $150 million to $1.5 billion and operations in four industry sectors: consumer; diversified industries; healthcare; and financial services.  Since the firm’s founding in 1988, the Vestar funds have completed more than 69 investments in companies with a total value of more than $30 billion.  Vestar, with $8 billion in capital under management, has offices in New York, Boston, and Denver (www.vestarcapital.com).

Sunrise Medical and Vestar received financial advice from Rothschild.  Simpson Thacher & Bartlett provided legal counsel and Deloitte Tax provided tax advice.

© 2012 PEPD • Private Equity’s Leading News Magazine • 11-7-12