November 13, 2012
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Archives for November 13, 2012

Monroe Capital Launches MC Healthcare Finance

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Monroe Capital has launched a new healthcare finance company to assist lower middle-market healthcare companies in meeting their liquidity needs to fund working capital, growth initiatives, expansion, and refinance existing debt. The new firm, MC Healthcare Finance, will provide short-term, asset-based funding for healthcare companies located throughout the United States.

MC Healthcare is led by James Irwin, the former founder of Meridian Healthcare Finance, and Terry Cady, a founder of three specialized healthcare asset-based lending firms, each having more than 30 years of corporate finance experience.

 “Sweeping changes in the healthcare industry and volatile credit markets have combined to create the perfect storm for our nation’s middle-market healthcare companies.  Obamacare will provide many challenges to grass roots providers of healthcare services and those companies that provide goods and services to them,” said Ted Koenig, President of Monroe Capital.  “Through MC Healthcare, we will provide these companies with a complete range of value-added asset based lending credit solutions to meet their financing needs and successfully navigate today’s challenging economic environment.”

MC Healthcare will finance all segments of the healthcare industry, including hospitals, nursing homes, home health service providers, durable medical equipment manufacturers, pharmaceutical laboratories, laboratory testing companies, physician practices, psychological and substance abuse facilities. It will provide loans of $1 million to $10 million but can arrange and participate in larger transactions, as necessary.  MC Healthcare Finance is based in La Jolla, CA (www.mchfin.com).

Monroe Capital is a specialty finance company providing senior and junior debt to middle-market companies. The firm specializes in originating, structuring and providing one-stop financings. Investment types include senior and junior secured debt as well as bridge loans, acquisition facilities, mezzanine or last-out secured loans and equity co-investments. Monroe Capital is based in Chicago, IL (www.monroecap.com).

© 2012 PEPD • Private Equity’s Leading News Magazine • 11-13-12

Abacus Backs Latest WestView Acquisition

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Abacus Finance Group served as Administrative Agent and Sole Lead Arranger for a $35 million credit facility in support of the recapitalization of Park Place Technologies by WestView Capital Partners and the company’s management team.

Park Place Technologies is a provider of outsourced third-party data center hardware maintenance, specializing in multi-vendor support for servers, storage and network equipment. The company’s customer base is comprised of over 1,500 organizations across a variety of industries, which make up more than 5,500 locations primarily in the United States and Canada.  Park Place Technologies is based in Cleveland (www.parkplacetechnologies.com).

The credit facility is comprised of a cash flow-based term loan and revolver and will be used to support Park Place Technologies’ future growth.  In addition to providing the financing Abacus made an equity co-investment in Park Place Technologies.  Webster Bank participated in the financing, and legal counsel to Abacus was provided by Goulston & Storrs.

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).

WestView Capital Partners invests from $10 million to $30 million of equity in lower middle market companies with EBITDA between $3 million and $20 million.  Industries of interest include business and healthcare services; software and IT services; industrial and manufacturing; distribution and logistics; media and publishing; and consumer products and retail. The firm will invest both as a minority or majority investor.  WestView currently manages over $500 million of equity and is based in Boston (www.wvcapital.com).

© 2012 PEPD • Private Equity’s Leading News Magazine • 11-13-12

Consumer Foods and Private Equity Drive Retail & Consumer Deals

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Corporations spinning off businesses, private equity investment in retail, and continued cross border activity and expansion into e-commerce drove retail & consumer merger & acquisition activity in the third quarter of 2012, according to PwC’s US retail and consumer M&A insights Q3 2012 report which was published today.

For the three month period ending September 30, 2012, there were a total of 32 deals in the retail and consumer sector with values greater than $50 million, accounting for $19.8 billion in deal value, a 60 percent increase in volume and a 160 percent increase in value from the 20 deals worth $7.6 billion during the third quarter of 2011.  In addition, there were six ‘mega’ deals (deals with values of $1 billion or more) during Q3 2012, representing $13.9 billion, a substantial jump from the 3 mega deals that totaled $4.3 billion during the same time period last year. Year-to-date 2012 activity for announced deals with values greater than $50 million is up 22 percent for volume and 119 percent for value versus the prior year.

“Third quarter M&A activity advanced at a brisk pace with significant increases in total deal volume and value from a year ago,” said Leanne Sardiga, partner and PwC’s US retail & consumer leader, transaction services. “With improving consumer sentiment, retail and consumer companies continue to use acquisitions as a vehicle for growth and for adapting to new consumer trends.  A strong interest among private equity investors for retail combined with international and e-commerce related acquisitions for retail & consumer corporate buyers are expected to drive the positive outlook for the retail and consumer sector.”

The rise of the digitally empowered consumer is driving retail business models to transition from traditional stores to a marketplace that is increasingly omni-channel. According to PwC, retailers are increasingly looking at acquisition opportunities to more quickly transform their business by expanding their e-commerce capabilities and to gain access to alternative business models.

The retail and consumer sector has also seen continued activity in corporate restructuring and spin-offs, as companies reassess their portfolios and positioning in an increasingly competitive environment. The report states that recent corporate spin-offs have generally focused on realigning businesses to distribution channels or high versus low growth product segments. As companies begin to trade separately, PwC believes there may be increased M&A activity to drive growth in the re-focused business segments.

“Deal activity in the consumer space was partially driven by large consumer packaged goods companies selling non-core operations and brands, and we expect the trend to continue over the next 12 months as consumer packaged goods companies look to sell underperforming assets and reinvest in higher margin or growth products and markets,” added Ms. Sardiga. “Private equity will continue to focus on the restaurant industry and be active in the subsector as they see opportunities to improve operating efficiencies during the economic downturn and position for growth.”

© 2012 PEPD • Private Equity’s Leading News Magazine • 11-13-12

Liberty Lane Partners Exits Prestolite Wire

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General Cable Corporation has acquired Prestolite Wire, a manufacturer of wire and cable products and a portfolio company of Liberty Lane Partners.

Through its two operating divisions, Prestolite manufactures a range of wire and cable products and harnesses serving predominately transportation original equipment manufacturers, tier one auto suppliers, and OEM distribution customers.  The company’s Wire and Cable Division is a manufacturer of copper wire and cable products.  With a 460,000 sq. ft. plant located in Paragould, AR and established in 1989, Prestolite serves the transportation and industrial markets in North America. The Wire Harness Division is a manufacturer of ignition wire sets and a supplier of wire harnesses and battery cables to the automotive industry.  The division services a range of OEMs and customers out of its manufacturing facility located in Nogales, Mexico – a 115,000 sq. ft. state of the art plant – and provides warehousing and full logistics support from a facility in Nogales, AZ, just across the Mexico-US border.  The harness products of Prestolite are used in a range of applications including engines, transmissions, fuel systems, vehicle interiors, and brake systems, among others.  In 2011, Prestolite reported revenues of $170 million. The company is headquartered in Southfield, MI (www.prestolitewire.com).

“Prestolite has built a strong brand and a broad base of long-standing customers through its reputation as a manufacturer of superior quality products and innovation, with a sharp focus on high temperature and abrasion- and corrosion-resistant applications,” said Roger Roundhouse, Senior Vice President and General Manager, Transportation Wire & Assemblies, General Cable. “This acquisition is highly complementary to our existing transportation related businesses as approximately 90% of Prestolite’s revenues are generated from products that are incremental to the company’s existing product portfolio.  We are excited about the growth opportunities that will be afforded to us as a result of this acquisition through new products as well as through greater access to the growing and evolving automotive segment of the wire and cable industry.”

Liberty Lane Partners makes control investments in public and private buyouts of middle market companies and add-on acquisitions for existing portfolio companies. Sectors of interest include distribution, manufacturing, and services with a focus on advanced materials, automotive aftermarket, diagnostics, healthcare, life sciences, laboratory, nutritional supplements, pharmaceutical packaging, pharma services, sign and graphics, specialty distribution, specialty packaging, specialty polymers, and wire and cable. Liberty Lane Partners is based in Hampton, NH (www.libertylp.com).

General Cable (NYSE:BGC), a Fortune 500 Company, is a leader in the development, design, manufacture, marketing and distribution of copper, aluminum and fiber optic wire and cable products for the energy, industrial, specialty, construction and communications markets.  The company is based in Highland Heights, KY (www.generalcable.com).

© 2012 PEPD • Private Equity’s Leading News Magazine • 11-13-12

WestView Capital Partners Acquires Park Place Technologies

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Park Place Technologies, a provider of third-party hardware maintenance services to small and medium enterprises, announced today that its current management team, led by CEO Ed Kenty, has partnered with WestView Capital Partners to recapitalize the company.

“We look forward to working with the Park Place team as they continue to capitalize on the growing opportunity for third-party maintenance providers and take market share with their top-quality service,” said Rick Williams, Managing Partner of WestView Capital, who will join Park Place’s board of directors.

Park Place Technologies is a provider of outsourced third-party data center hardware maintenance, specializing in multi-vendor support for servers, storage and network equipment. The company’s customer base is comprised of over 1,500 organizations across a variety of industries, which make up more than 5,500 locations primarily in the United States and Canada.  Park Place Technologies is based in Cleveland (www.parkplacetechnologies.com).

“Park Place has continued to strengthen its position as a leading third-party maintenance provider in the data center, and as IT departments across the world continue to be budget-constrained, we are seeing an increasing shift towards lower-cost, higher-quality maintenance providers who have the skill sets to support hardware across multiple OEM platforms,” said Ed Kenty, CEO of Park Place since 2004. “Our partnership with WestView further strengthens Park Place’s financial position and will support our continued growth and expansion into new product areas and geographical regions. We will also benefit from WestView’s extensive experience assisting technology service companies such as ours achieve their strategic objectives and growth potential.”

“Our investment in Park Place continues our longstanding focus of partnering with experienced and passionate management teams in the technology outsourcing sector,” said Matt Carroll, a General Partner at WestView who will also join the board.

WestView Capital Partners invests from $10 million to $30 million of equity in lower middle market companies with EBITDAs between $3 million and $20 million.  Industries of interest include business and healthcare services; software and IT services; industrial and manufacturing; distribution and logistics; media and publishing; and consumer products and retail. The firm will invest both as a minority or majority investor.  WestView currently manages over $500 million of equity and is based in Boston (www.wvcapital.com).

Abacus Finance Group provided senior debt financing for the transaction.

© 2012 PEPD • Private Equity’s Leading News Magazine • 11-13-12

Harbour Group Acquires CPS Products

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The Harbour Group has acquired CPS Products, a manufacturer of HVAC tools, equipment, and instruments.

“With its outstanding technology and rock-solid reputation, we are thrilled to welcome CPS into the Harbour Group family,” said Jeff Fox, Harbour Group’s chairman and chief executive officer.  “Ed Jeffers has built a great business, and we look forward to partnering with his team to further develop the company’s strengths in new-product development and customer service.  We also believe there are excellent opportunities to acquire other companies with strong technology in the HVAC/R industry to build an even stronger industry leader.”

CPS is a manufacturer of tools, equipment, and instruments used by professional technicians who service commercial HVAC/R and automotive AC systems.  The company’s products are sold under the CPS and Pro-Set brands.  CPS was founded in 1989 and is based in Hialeah, FL (www.cpsproducts.com).

“This is a very exciting development for our employees, customers, and vendors.  The operational and financial resources of Harbour Group will help create an even more compelling offering for our customers and more opportunities for our employees,” said Ed Jeffers, CPS’ CEO and company founder.

Harbour Group and its companies are engaged in manufacturing, distribution, and specialty services in multiple industries, including specialty LED systems, niche distribution, logistics services, decorative kitchen and bath hardware, automotive enthusiast products, abrasives, diamond-cutting products and related tools, entertainment and music products, and auxiliary plastic processing equipment. Since its founding in 1976, Harbour Group has acquired 170 companies in 35 different industries. The company is based in St. Louis (www.harbourgroup.com).

© 2012 PEPD • Private Equity’s Leading News Magazine • 11-13-12

Vista Equity Partners Acquires ADP Taxware Division

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ADP has signed an agreement to sell its ADP Taxware business, a provider of sales, use and value-added tax compliance services, to Vista Equity Partners. The transaction is expected to close by year end.

The ADP Taxware business is a provider of automated solutions for sales, use and value-added tax compliance. The business serves more than 1,200 clients and is based in Salem, NH (Click HERE to access the ADP Taxware website).

Vista Equity Partners has more than $6.6 billion in committed capital and makes equity investments in enterprise software businesses and technology-enabled solutions companies.  The firm was founded in 2000 and has over 50 investment professionals operating out of Austin TX, Chicago, IL and San Francisco CA (www.vistaequitypartners.com).

“We are long-term investors in enterprise application software companies that are committed to being leaders in their markets.  We are impressed with the compelling value proposition the Taxware products and services offer their customers, the impressive list of marquee clients and their history of being a leader in the markets they serve.  We look forward to working with them to allow them to reach their full potential,” said Robert Smith, managing principal of Vista Equity Partners.

Mooreland Partners, based in Greenwich, CT (www.moorelandpartners.com), acted as the exclusive financial advisor to Automatic Data Processing for this transaction.

Automatic Data Processing (Nasdaq: ADP), with more than $10 billion in revenues and approximately 600,000 clients, is one of the world’s largest providers of business outsourcing services including human resource, payroll, tax and benefits administration. The company is based in Roseland, NJ (www.ADP.com).

© 2012 PEPD • Private Equity’s Leading News Magazine • 11-13-12

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