November 15, 2012
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Archives for November 15, 2012

Babson Capital Backs Stone Arch Portfolio Company Recap

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Babson Capital Management has provided subordinated debt and made an equity co-investment to support Stone Arch Capital’s recapitalization of its portfolio company, Asset Marketing Services, a marketer of high-value collectible coins, jewelry and watches.  Babson Capital served as the lead provider of subordinated debt on the transaction.  Stone Arch Capital acquired Asset Marketing Services in 2009.

“Babson Capital’s deep experience in financing lower-middle-market companies and its longstanding relationship with Stone Arch Capital combined to make the recapitalization of Asset Marketing Services an efficient and seamless transaction,” said Charlie Lannin, Managing Partner of Stone Arch Capital. “The expertise and relationship-oriented approach of Babson Capital’s Mezzanine & Private Equity Group have made them a value-added partner on every investment we have been involved in together.”

Asset Marketing Services (AMS) is a multi-channel direct marketer of high-value collectible coins and proprietary branded jewelry and watches.  The coin division of AMS sources and markets rare and historical coins as well as new releases from government monetary authorities, distributors and wholesale dealers worldwide.  AMS’ jewelry division, known as “Stauer”, designs, sources, brands and markets high-quality jewelry and watches at affordable prices. The company is based in Burnsville, MN (www.amsi-corp.com).

“Babson Capital is grateful for the opportunity to participate alongside Stone Arch Capital in the recapitalization of AMS,” said Bob Erwin, Managing Director and a senior member of Babson Capital’s Mezzanine & Private Equity Group. “As a limited partner in Stone Arch Capital’s funds, we have tracked the significant growth and value created by Stone Arch Capital and AMS’ management since the original acquisition of AMS by Stone Arch Capital in 2009.  AMS is well-positioned to generate additional growth and value going forward.”

Babson Capital had $154 billion in assets under management as of September 30, 2012 and is a member of the MassMutual Financial Group. The firm is based in Boston and Springfield, MA and Charlotte, NC and has six additional offices in the US and one in Sydney, Australia, with subsidiaries in London and Tokyo (www.BabsonCapital.com).

Stone Arch Capital invests from $10 million to $25 million in Midwest-based lower middle-market companies with EBITDA greater than $5 million.  Sectors of interest include manufacturing and service industries, excluding real estate, technology, and commodity industries.  The firm is located in Minneapolis, MN (www.stonearchcapital.com).

© 2012 PEPD • Private Equity’s Leading News Magazine • 11-15-12

Blue Sage Adds to Team with Launch of Fund 2

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To support the launch of its second fund, Blue Sage Capital has added two new members to its investment team with the hiring of Adam Norris and Ali Williford.

Mr. Norris joins Blue Sage as a Vice President.  He will be responsible for evaluating, structuring, due diligence, and financial modeling of new investment opportunities and will have portfolio company monitoring responsibility.  Mr. Norris joins Blue Sage after seven years with Salem Capital Partners, where he served as Vice President with their three SBIC funds. He has a Bachelor of Economics degree from Davidson College.

“At Salem, Adam was part of a team that made 62 investments over the course of three funds and we are excited about the extensive experience he brings to Blue Sage,” said Jim McBride, Blue Sage Co-Founder and Managing Member.

Ms. Williford joins Blue Sage as an Associate and will be responsible for sourcing new investments and assisting with the evaluation, structuring, due diligence, and financial modeling of investment opportunities.

Prior to joining Blue Sage, Ms. Williford was an Analyst with Graham Partners, a middle market private equity firm in Philadelphia, where she provided financial analysis related to Graham Partners’ portfolio.  She earned a Master of Arts in Management and a Bachelor of Arts in Political Science from Wake Forest University, with minors in Spanish and International Studies.

“Ali brings a unique skill set to our team.  We are thrilled to have her valuation and communication experience,” said Peter Huff, Blue Sage Co-Founder and Managing Member.

Blue Sage Capital specializes in growth, recapitalization and buyout financings of smaller middle-market companies based in Texas and the Southwest.  Most of Blue Sage’s investments are in established, profitable companies with $5 million to $100 million of revenue and $2 million to $8 million of cash flow at the time of investment.  Blue Sage invests in a variety of industries, with each initial investment in a company ranging from $10 million to $15 million. The firm was founded by Peter Huff and Jim McBride and is based in Austin, TX (www.bluesage.com).

© 2012 PEPD • Private Equity’s Leading News Magazine • 11-15-12

Blackthorne Partners Acquires Berlon Industries

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Blackthorne Partners has acquired Berlon Industries, a manufacturer of buckets and attachments for tractors.

“Berlon is a 63-year-old company with a very high quality, yet affordable product line that has enabled it to build a strong brand reputation and serve a niche customer base.  Our goal is to build on this foundation by equipping them with the resources they need to grow, but that can be difficult for small companies like Berlon to access,” said Steve Balistreri, a Blackthorne Partners principal.

Berlon Industries is a manufacturer of buckets and attachments for tractors, skid loaders, telehandlers and compact utility tractors. The company serves customers in the agricultural, construction and landscape management industries.  Berlon markets its products through dealers in Wisconsin, Michigan, Minnesota, Illinois and Iowa. Outside of these states the company sells through a combination of dealer, distributor and direct sales.  Berlon Industries is based in Hustisford, WI (www.berlon.com).

In conjunction with the acquisition, Mike Ebben, an experienced manufacturing industry leader, has been hired to serve as Berlon’s president.  Lon Berndt, Berlon’s current owner, will work closely with Mr. Ebben to ensure a smooth transition.

“As the longtime owner of Berlon Industries, I was determined to make sure the next chapter of this company takes good care of our customers as well as our employees,” said Mr. Berndt. “The team of Blackthorne and Mike Ebben offer the experience and commitment it will take to grow the legacy we’ve built over the years.”

Blackthorne Partners invests in small, niche companies across an array of industries.  Investments targeted by the firm typically have less than $1 million in EBITDA and $2 million to $10 million in revenue.  Blackthorne Partners is based in Mequon, WI (www.blackthornepartners.com).

“We believe there are many companies in our market, like Berlon, whose future can be brighter with the right ownership transition,” said Mr. Balistreri. “By focusing on companies with earnings of approximately $1 million, we not only serve an unmet need in the marketplace but have an opportunity to help these smaller businesses become the mid-market companies that are the future of Wisconsin.”

© 2012 PEPD • Private Equity’s Leading News Magazine • 11-15-12

Vicente Capital Partners Acquires Intellectual Technology

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Vicente Capital Partners has acquired a controlling interest in Intellectual Technology, a provider of outsourced services to motor vehicle departments.  This is the firm’s seventh investment out of its $165 million Growth Equity Fund.

Intellectual Technology (ITI) is a provider of technology solutions and outsourced services to state motor vehicle departments across North America.  ITI’s service kiosks allow people to renew their vehicle registrations and renew their driver’s license at locations other than the physical offices of the DMV.  ITI currently provides kiosks to DMV offices in California, Nevada, South Dakota and New York. ITI also offers a fulfillment solution, whereby states can outsource their entire DMV registration operation to ITI’s corporate facility.  The company is based in Carlsbad, CA with a logistics and operations office located in Fort Wayne, IN (www.iti4dmv.com).

ITI’s management team is led by President Craig Litchin and Director of Operations Drew Nicholson. “We are excited to partner with Craig, Drew and their team,” said Jay Ferguson, Managing Partner of Vicente Capital Partners. “For over 20 years, ITI has maintained excellent customer service and developed long-term relationships with some of the largest jurisdictions in North America. We look forward to partnering with management to help the company accelerate its growth and capabilities.”

Intellectual Technology was represented by Imperial Capital, an investment bank servicing institutional investors and middle market companies.  OneWest Bank provided debt financing for this transaction.

Vicente Capital Partners is a private equity firm specializing in both non-control and control investments in businesses that have annual revenues between $5 million and $50 million. Sectors of interest include business services (outsourced services, Internet services, telecom services); consumer services (healthcare services, residential delivery, education); and specialty manufacturing (aerospace & defense, environmental products, networking/telecom equipment).  The firm is based in Los Angeles, CA (www.vicentecapital.com).

“Vicente Capital Partners shares our drive to modernize and improve the customer experience at DMVs across North America.  We are excited about this partnership and believe that together we can continue to grow and expand our offering,” said Craig Litchin, ITI President. “This partnership is a win for our customers, partners, employees, and suppliers.”

© 2012 PEPD • Private Equity’s Leading News Magazine • 11-15-12

Ampersand Acquires Willow Laboratories

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Willow Laboratories, a clinical and forensic toxicology laboratory, has been acquired by Ampersand Capital Partners.

Willow Laboratories is a clinical and forensic toxicology laboratory providing urine, hair, and saliva testing services to a range of healthcare providers including treatment centers, physician practices, and other laboratories.  The company’s services are used by substance abuse rehabilitation providers to aid them in the diagnosis and treatment of drug and alcohol addiction.  Founded in 1995, Willow performs millions of drug tests annually and has clients in 20 states. The company is based in Lynn, MA (www.willowlabs.com).

With the closing of the acquisition, Gail Marcus has joined Willow as president and chief executive officer.  Ms. Marcus has experience building successful healthcare service organizations and was recently CEO of Caris Diagnostics, a national diagnostic pathology laboratory.  Ms. Marcus also serves as president and CEO of Calloway Laboratories, which recently signed an agreement to be acquired by Ampersand.

“I am excited to be working with the Willow and Calloway management teams and look forward to sharing strengths and resources across the companies in order to provide clients the most-complete set of toxicology lab services available in the marketplace,” said Ms. Marcus.

Ampersand Capital Partners makes middle market growth equity investments in the healthcare sector.  The firm is based in Wellesley, MA (www.ampersandcapital.com).

“Willow is another key piece of our strategy to invest in the multi-billion dollar toxicology lab industry.  With the infusion of additional capital and management resources, Willow is well positioned to capitalize on future growth opportunities in the substance abuse market while implementing a zero tolerance compliance policy,” said Jared Bartok, general partner at Ampersand.

© 2012 PEPD • Private Equity’s Leading News Magazine • 11-15-12

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