Archives for January 18, 2013

American Capital Acquires Airline Career Academy

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Pan Am International Flight Academy, a portfolio company of American Capital, has acquired the assets of Airline Career Academy, a pilot training academy.  American Capital acquired Pan Am International Flight Academy in July 2006.

Airline Career Academy is certified to provide Federal Aviation Administration and European Aviation Safety Agency flight training courses and trains approximately 250 pilots annually.  The company provides private, instrument and commercial multi-engine training with a fleet of 50 aircraft.  The company was founded in 1995 and is based in Kissimmee, FL with additional training facilities in Merritt Island, FL and Fort Lauderdale, FL and maintains relationships with organizations in Costa Rica, UK, Italy and Spain (www.flyoft.com).

“Pan Am International Flight Academy is a well-known brand name in the flight training industry, recognized worldwide for its high quality training,” said Myung Yi, American Capital Managing Director, Special Situations Group.  “With the acquisition of Airline Career Academy, Pan Am will now offer customers a complete flight training program, ranging from zero flight time through commercial airline type ratings.”

Pan Am International Flight Academy is a provider of simulator-based flight training to commercial airlines and professional pilots. The company grew out of the flight simulation and training center of the former Pan Am Airways and offers airlines and individuals training on over 60 full-flight simulators with courses for pilots, cabin crew, mechanics and aircraft dispatchers.  Its principal customers are commercial passenger airlines and air freight carriers, which are primarily regional carriers in North and South America, and air traffic control authorities worldwide.  The company has training facilities in Miami, FL; Memphis, TN; Minneapolis, MN; Las Vegas, NV; and Cincinnati, OH. Pan Am International Flight Academy was founded in 1992 and is based in Miami (www.panamacademy.com).

“The timing of this acquisition is excellent as the demand for pilots is expected to significantly increase,” said Andrew Flesch, American Capital Principal, Special Situations Group.  “The industry faces an acute pilot shortage in the coming decade as senior pilots are forced to retire at age 65 and new federal regulations require a higher level of experience for new pilots. Furthermore, the global increase in air travel and larger commercial aircraft fleet will contribute to the increased demand for pilots.”

American Capital is a publicly traded private equity firm and global asset manager that originates, underwrites and manages investments of $10 million to $750 million in middle market private equity, leveraged finance, real estate and structured products. Founded in 1986, American Capital has $118 billion in total assets under management and has eight offices in the US, Europe and Asia. The firm is headquartered in Bethesda, MD (www.AmericanCapital.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 1-18-13

Calvert Street Acquires JC Inspection and Xxtreme Pipe Services

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Inspection Oilfield Services, a Calvert Street Capital Partners portfolio company, has acquired JC Inspection and Xxtreme Pipe Services.

“The acquisitions of JC Inspection and Xxtreme represent important strategic additions to the Inspection Oilfield Services platform, further diversifying the company’s capabilities, customer base, and growth opportunities while adding significant scale,” said Brian Guerin of Calvert Street.

JC Inspection (JCI) is a provider of drill tool inspection and repair services.  JCI was founded in 2001 and has more than 90 employees and maintains offices in Houston and Midland, TX (www.jcinspection.com).

Xxtreme is a provider of inspection, threading, repair and storage services for oil country tubular goods companies.  The company was founded in 2003 and is based in Houston, TX (www.wolfpackenergy.com/xxtreme_companies).

“JCI and Xxtreme represent two very strong companies, both of whom we have known and admired for a number of years, and we are very excited to welcome them to the IOS team. With shared cultures focused on safety, quality, and customer service, both JCI and Xxtreme will greatly enhance IOS’s overall service offering, footprint and talent.”

Inspection Oilfield Services provides non-destructive testing, inspection, threading, storage, cleaning and repair services for tubular products and tools used in oil and gas drilling and production. The company has 28 fixed locations across Louisiana, Texas, New Mexico, Kansas, Nebraska, North Dakota, West Virginia, Pennsylvania, New York and Ohio, and significant mobile inspection operations.  Inspection Oilfield Services is headquartered in Lafayette, LA (www.iosinspection.com).

Calvert Street makes control investments in niche manufacturing and business service companies that have a minimum of $5 million of EBITDA and are located in the US or Canada. The firm is based in Baltimore, MD (www.cscp.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 1-18-13

Latest Education Industry M&A Report Published by Berkery Noyes

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Media investment bank Berkery Noyes has published its full year 2012 mergers and acquisitions trend report for the Education Industry. The report analyzes M&A activity in the sector during 2012 and compares it with data covering 2010 and 2011. This market includes information and technology companies servicing the Education Industry, including the K-12, Post-Secondary, Childcare Services, and Corporate and Professional Training segments.

Berkery Noyes’ research showed that transaction volume remained nearly constant on a year-to-year basis. However, aggregate transaction value fell 44 percent, from $11.9 billion in 2011 to $6.7 billion in 2012. The median revenue multiple between 2011 and 2012 stayed the same at 1.6x, while the median EBITDA multiple declined from 12.0x to 10.3x.

There was an uptick in private equity activity in the Education Industry over the past twelve months. Financial sponsors accounted for 30 percent of transaction volume and 63 percent of value in 2012, compared to 25 percent of volume and 51 percent of value in 2011. Providence Equity Partners was one of the most active private equity firms in 2012, completing three industry transactions.

The two highest value education deals in 2012 both occurred in the fourth quarter. This consisted of the announced sale of McGraw-Hill Education to Apollo Global Management for $2.6 billion and Pearson’s acquisition of Embanet Compass for $650 million. Higher-Ed Media and Tech was the segment with the most notable rise in transaction volume, improving 59 percent since 2011. One of the segment’s largest deals over the course of 2012 was John Wiley & Sons’ acquisition of Deltak.edu for $220 million, which was announced in the fourth quarter as well.

“As the migration to digital formats and delivery continue, the potential for transformation in the education industry that is succeeding at the post secondary level will continue to be substantial in all the education subsectors,” said Peter Yoon, Managing Director at Berkery Noyes. “In particular, the digital subscription model that is becoming more prevalent across the entire education spectrum, from K12 to professional/corporate training, is especially attractive to acquirers due to the visibility and recurring nature of the revenues.”

Meanwhile, the number of transactions in the K-12 Media and Tech segment declined 15 percent in 2012, following a 28 percent rise from 2010 to 2011. Deal volume in the Professional Training Institutions segment experienced a 14 percent yearly increase, edging past both the K-12 and Higher-Ed Media and Tech segments as the industry’s most active market sector.

“Acquirers are increasingly interested in e-learning solutions that will both complement and build upon their existing products,” said Mary Jo Zandy, Managing Director at Berkery Noyes. “With the implementation of the common core state standards and the related digital infrastructure, the value of e-learning will be enhanced.”

A free copy of the full year 2012 mergers and acquisitions trend report for the Education Industry is available by clicking HERE.

© 2013 PEPD • Private Equity’s Leading News Magazine • 1-18-13

Mesirow Advises Kamylon Capital on Sale of Label World

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Mesirow Financial acted as the exclusive financial advisor to Label World, a digital and flexographic printing company and a portfolio company of Kamylon Capital, in its recent sale to WS Packaging Group.  Kamylon acquired the assets of Label World in January 2006.

“We are pleased to have worked with Kamylon Capital and the Label World team during the sale process. Label World’s strong management team and custom label capabilities complement WS Packaging’s label converting operations nicely,” said Bill Hornell, managing director at Mesirow Financial.

The transaction represents another successful assignment completed by Mesirow Financial’s Investment Banking group. Mesirow Financial is one of the most active advisors in the paper, plastics, packaging and specialty printing sectors, having completed over 90 transactions in recent years.

Label World employs digital and flexographic printing technologies to manufacture custom labels and packaging products for end markets such as food, industrial, health and beauty, nutraceuticals, wine and specialty beverage. The company is based in Rochester, NY (www.labelworldusa.com).

“Mesirow Financial was a valuable partner throughout the sale process. Their knowledge and experience in packaging, combined with their execution expertise, helped us generate a competitive process and ultimately drive a positive outcome,” said John McDermott, president and CEO of Label World.

The buyer of Label World, WS Packaging Group, is one of the largest printing and label converting operations in North America. The company has more than 1,900 employees and offers an array of printing and flexible packaging across 22 manufacturing facilities in the US and Mexico. WS Packaging Group is based in Green Bay, WI (www.wspackaging.com).

Mesirow Financial’s Investment Banking group focuses exclusively on middle-market transactions and serves middle-market companies and large corporations, both public and private, in merger and acquisition advisory, capital markets advisory, restructuring and special situations, fairness and solvency opinion, board of directors advisory and special committee representation.  Overall, Mesirow Financial is a diversified financial services firm with particular expertise in investment management, global markets, insurance services and consulting.  Founded in 1937, Mesirow is an independent, employee-owned firm with more than 1,200 employees in offices across the US and in London, UK. The firm is headquartered in Chicago (www.mesirowfinancial.com).

Kamylon Capital makes control equity investments in lower middle market businesses. The firm is based in Wellesley Hills, MA (www.kamylon.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 1-18-13

MCG Capital Backs Sentinel Portfolio Company Add-on Acquisition

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MCG Capital has closed a $16.8 million subordinated term loan investment in Chase Doors, a manufacturer of specialty door systems and a portfolio company of Sentinel Capital Partners. The new capital from MCG was used to support a recent add-on acquisition by Chase Doors.

Chase Doors, acquired by Sentinel in December 2010, manufactures specialty door systems used in a variety of industrial and commercial settings.  Products include corrosion resistant doors used for hazardous material handling; cold storage doors used in walk-in freezers and refrigerators; double impact traffic doors used in supermarkets and restaurants; and strip and roll-up doors used in warehouses. The company serves an array of end markets, including retail, industrial, pharmaceutical, food processing, distribution, postal and institutional.  Chase Doors has more than 300 employees and five vertically integrated manufacturing facilities.  The company was founded in 1932 and is based in Cincinnati, OH (www.chasedoors.com).

MCG Capital is a commercial finance company providing capital and advisory services to middle-market companies throughout the United States. The firm typically invests in companies with $20 million to $200 million in revenue and $3 million to $25 million in EBITDA. MCG Capital is based in Arlington, VA (www.mcgcapital.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 1-18-13

Grey Mountain Promotes New Managing Director

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Grey Mountain Partners has promoted Ben Ault to Managing Director.  Since joining Grey Mountain in 2004, Mr. Ault has been active in building the firm’s presence in the lower middle market.

Mr. Ault is involved in all areas of Grey Mountain with a particular emphasis on deal sourcing and the firm’s Executive Sponsorship Program which involves working in tandem with high potential, C-level leaders in order to acquire businesses and create long-term value.

Prior to joining Grey Mountain, Mr. Ault was with the mergers & acquisitions group of Goldman Sachs in New York.  He has a BA in economics and management from Indiana University and a master’s degree from The London School of Economics.

Grey Mountain Partners invests in middle market companies with enterprise values between $30 million and $150 million. The firm is based in Boulder, CO (www.greymountain.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 1-18-13