December 5, 2012
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Archives for December 5, 2012

High Road Capital Partners Hits 49% IRR on Latest Sale

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High Road Capital Partners has sold its portfolio company Accentus, a provider of medical transcription services, to Nuance Communications.  The sale of Accentus generated a 3.1x gross cash-on-cash return and a 49% gross IRR for High Road.  Partners Jeff Goodrich and Bill Hobbs and Principal Ben Schnakenberg led High Road’s investment in Accentus.

“In the three and a half years High Road owned Accentus, revenues and EBITDA increased by 400%,” said Bob Fitzsimmons, High Road’s Managing Partner. “Our investment strategy is to buy niche leaders and work with management to build bigger, more efficient, and qualitatively better businesses.  In partnership with Accentus’s outstanding management team, we were able to execute our value creation plan by expanding service offerings, completing four add-on acquisitions to build a presence in the US acute and ambulatory markets, and broadening technological capabilities.”

Accentus is a provider of medical transcription, document imaging, and remote coding technology and services to hospitals and physician groups in Canada and the United States.  The company is based in Ottawa, Ontario (www.accentusinc.com).

“With High Road’s support, we achieved significant growth in our medical transcription business in Canada while expanding into the United States,” said Steve Rogers, CEO of Accentus.  “Additionally, we made significant investments in our proprietary workflow management platform and in developing medical document imaging and remote coding services. These investments enabled us to broaden and deepen our client relationships.”

The sale of Accentus marks the second exit for the firm’s debut fund, High Road Capital Partners Fund I, LP.  The firm’s first exit was the sale of Milwaukee Gear Company to Regal Beloit Corporation for $80 million.  The sale generated a 2.6x gross cash-on-cash return and a 31.6% gross IRR for High Road. Milwaukee Gear manufactures custom precision gears and drives used in a variety of industrial applications.

Harris Williams & Co. advised High Road Capital Partners on the sale of Accentus.

High Road Capital Partners invests in manufacturing, service, or value-added distribution businesses with revenues of $10 million to $100 million and EBITDA’s of $3 million to $10 million. High Road was formed in 2007 and currently manages over $150 million of committed capital. The firm is based in New York (www.highroadcap.com).

© 2012 PEPD • Private Equity’s Leading News Magazine • 12-5-12

New Private Equity Relationship Director at BDO

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BDO USA, an accounting and consulting organization, has named Todd Kinney as Relationship Director for the firm’s National Private Equity practice.

In his new role, Mr. Kinney will be responsible for implementing BDO’s private equity industry growth strategy by sourcing new private equity clients and opportunities.  He will also work closely with the National Private Equity practice to raise its visibility through market development and branding.

“Todd has a deep understanding of the private equity sector, which has enabled him to establish a strong network of industry influencers and increase the market visibility of BDO,” said Lee Duran, BDO’s National Practice Leader for Private Equity. “Todd has originated many new client relationships to date while building a stable network of prospects and referral partners that we will leverage well into the future. I am confident in Todd’s ability to continue to help us grow this very strategic practice area as he steps into his new role.”

Mr. Kinney has been with BDO since 2003 and most recently served as the Northeast Regional Director of Business Development. In that role, Mr. Kinney focused on business development for BDO’s private equity, venture capital, audit and tax practices in the Northeastern United States.

Prior to joining BDO, Mr. Kinney spent a decade as an investment banker with Oppenheimer & Co., Cowen and Company and Societe Generale.  His banking career included approximately 80 corporate finance transactions with an aggregate deal value in excess of $10 billion. He recently began a three-year term on the board of directors of the Association for Corporate Growth’s New York chapter, including a one-year term as Vice President of Membership. He holds a Bachelor of Science in Business Administration with a finance major from Georgetown University.

BDO is a professional services firm providing assurance, tax, financial advisory and consulting services to a range of publicly traded and privately held companies.  The firm serves clients through 45 offices and more than 400 independent alliance firm locations nationwide (www.bdo.com).

© 2012 PEPD • Private Equity’s Leading News Magazine • 12-5-12

Bertram Capital Invests in Paula’s Choice

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Bertram Capital has made a growth investment in Paula’s Choice, a skin care and cosmetics company.  Paula’s Choice represents Bertram Capital’s third investment in a high-growth consumer brand and the firm’s ninth platform investment overall.

Paula’s Choice is a cosmetics and skin care company that offers proprietary products, skin care research, and online content that empower consumers to find the best products available for their skin.  Paula’s Choice offers over 45,000 product reviews through its Beautypedia platform and its products are sold globally in over 50 countries.  The company was founded in 1995 by Paula Begoun and is based in Seattle (www.paulaschoice.com).

“We were approached by a number of firms over the past year and were looking for a financial and strategic partner that shared our vision and enthusiasm for the Paula’s Choice brand,” said Ms. Begoun.  “We were impressed with Bertram Capital’s unparalleled ability to leverage their own technology team as well as their commitment to build the brand responsibly. This partnership will enable us to re-invest in our business so we can continue to pursue our mission to help consumers around the world take brilliant care of their skin. We are excited to join forces with the Bertram Capital team as we move forward in the evolution of our company and brand.”

The Bertram Capital team was introduced to Paula’s Choice by Partnership Capital Growth Advisors (PCGA), a San Francisco-based full-service investment bank focusing exclusively on the healthy, active and sustainable living marketplace.  “We are grateful to Janica Lane and the PCGA team for bringing an exceptional investment opportunity to our attention,” said Ryan Craig, Partner at Bertram Capital.  “Paula’s Choice represents the type of growth and business-building opportunity we search for every day at Bertram.  PCGA distinguished itself with the quality of its client and adept management of the process.”

Bertram Capital invests in middle-market business services, consumer, healthcare, industrial and technology companies. Bertram is currently investing out of its $500 million second fund and typically allocates $25 million to $100 million to each investment. Since the firm’s inception, Bertram has managed in excess of $850 million in committed capital and has completed 8 platform investments and 14 follow-on acquisitions. The firm is located in San Mateo, CA (www.bertramcapital.com).

“Paula and her team have built an impressive organization around a brand that stands for excellence and efficacy, and have differentiated themselves in a highly competitive consumer category,” said Jeff Drazan, Bertram Capital’s Managing Partner. “We are honored that Paula selected Bertram Capital as her partner to further build Paula’s Choice as both a brand and a premier online destination.”

© 2012 PEPD • Private Equity’s Leading News Magazine • 12-5-12

ICV Partners Acquires SAFE Security

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ICV Partners has acquired SAFE Security, a provider of residential and commercial security alarm systems, monitoring services, and support services.

SAFE Security provides alarm monitoring services, installation, maintenance and other related services to homeowners and businesses across the nation.  The company was founded in 1988 by CEO Paul Sargenti and is based in San Ramon, CA (www.safesecurity.com).  SAFE sources new accounts primarily by purchasing existing security alarm contracts from other security alarm companies and develops new accounts from a network of dealers nationwide.  Among the nation’s 12,000 security dealers, SAFE’s portfolio generates gross revenues that put it consistently in the top 25 U.S. alarm companies.

“Paul Sargenti has built SAFE into a strong company that today provides a valuable and compelling service to a broad and growing customer base.  The security alarm industry is highly fragmented and stable and has demonstrated resilience through the last recessionary period. We are confident that with a stable source of capital and additional expertise from ICV we can work with Paul and his strong management team to further grow the company,” said Cory Mims, a Managing Director of ICV.

ICV Partners invests in family-owned and closely-held businesses as well as corporate divestitures with revenues from $25 million to $250 million and EBITDAs from $5 million to $30 million. The firm has $440 million in capital under management and has offices in New York and Atlanta (www.icvpartners.com).

“The security alarm industry has 20 years of stable growth and our exciting new partnership with ICV will help accelerate our growth initiatives in existing and new markets.  ICV has a long history of successfully partnering with founder-owned companies and we look forward to working with them,” said Mr. Sargenti.

© 2012 PEPD • Private Equity’s Leading News Magazine • 12-5-12

Prospect Partners Invests in Irrigation Components International

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Prospect Partners has made an investment in Irrigation Components International, a provider of agricultural irrigation equipment. This is Prospect Partners’ fourth platform investment for its third fund.

Irrigation Components International (ICII) manufactures and distributes irrigation equipment parts to original equipment manufacturers and after-market customers, primarily dealers. The company’s products include mechanical and electrical components to make center pivots, including power transmissions, flow meters, sprinklers, controls, wires and cables, and fittings. ICII is based in Daphne, AL (www.irricomp.com).

Prospect Partners focuses exclusively on management-led leveraged recapitalizations and acquisitions of niche market leaders with revenues typically between $10 million and $75 million. Since 1998, Prospect Partners has invested nationwide in more than 86 companies in a range of niche manufacturing, distribution, and specialty service markets.  The firm has $470 million of capital under management and is based in Chicago (www.prospect-partners.com).

The other portfolio companies in Prospect Partners’ $200 million third fund are: Landmark Irrigation Holding Services, a designer and installer of custom micro-irrigation systems for Central California farmers; Prospect Water Co., a provider of water treatment products and services through independently franchised dealers; and SurePoint Holdings, a nationwide provider of direct-to-consumer diabetes-care supplies and services.

© 2012 PEPD • Private Equity’s Leading News Magazine • 12-5-12

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