Archives for January 23, 2013

Caymus Equity Partners and Centerfield Capital Partners Acquire Direct Marketing Solutions

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Caymus Equity Partners and Centerfield Capital Partners have acquired Direct Marketing Solutions in partnership with the company’s management.

Direct Marketing Solutions (DMS) is a vertically integrated direct marketing service provider that develops and executes direct marketing programs on behalf of Fortune 1000 companies.  The company is based in Portland, OR (www.teamdms.com).

TCF Capital Funding provided $8.5 million in senior secured credit facilities in support of the recapitalization of Direct Marketing Solutions.  “We have a long standing relationship with the management team, Mike and Steve Sherman, and DMS.  We are excited by this opportunity to provide senior financing for the recapitalization of DMS and look forward to a long term relationship with Caymus Equity Partners, Centerfield Capital Partners and management,” said Joseph Gaffigan, President of TCF Capital Funding.

TCF Capital Funding provides asset-based and cash flow financing to lower middle market businesses.  TCF Capital provides asset-based loans and private equity sponsor-backed cash flow loans to companies with less than $100 million in revenue and between $2 million and $10 million in EBITDA.  The firm is based in Burr Ridge, IL (www.tcfcapitalfunding.com).

Caymus Equity Partners invests from $3 million to $25 million in middle and lower-middle market companies that have at revenues of $10 million to $100 million and at least $2 million in EBITDA.  Sectors of interest include business services, healthcare, consumer, and media & communications. The firm is based in Atlanta (www.caymuspartners.com).

Centerfield Capital Partners provides subordinated debt and equity financing to middle market companies primarily in the Midwest.  Centerfield invests from $2 million to $15 million in profitable growth companies, generally to facilitate changes in ownership, recapitalizations or growth.  The firm has approximately $200 million in capital under management and is based in Indianapolis, IN (www.centerfieldcapital.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 1-23-13

Albion Investors and Isleworth Capital Acquire S.I. Jacobson Manufacturing

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Albion Investors and Isleworth Capital Partners have acquired S.I. Jacobson Manufacturing Company, a designer and manufacturer of molded cases.

S.I. Jacobson is a designer and manufacturer of fabric, vinyl and compression molded cases supplied to a variety of industries, including hardware, houseware, automotive, electronics and medical applications. The company works with OEM clients to provide customized packaging products to promote brand awareness, improve retail visibility, and increase end user functionality. S.I. Jacobson also offers project management services, including planning and analysis, logistics and marketing support.  The company is headquartered in Waukegan, IL (www.sij.com).

Albion Investors invests in lower middle market companies with EBITDAs from $.5 million to $3 million.  Sectors of interest include specialty manufacturing, business services, value-added distribution, and consumer products. The firm has office in New York and Chicago (www.albioninvestors.com).

Isleworth Capital Partners is a private equity firm founded by Frank Feraco. The firm is located in Schaumburg, IL (no website found).

Mesirow Financial acted as the exclusive financial advisor to S.I. Jacobson Manufacturing Company in this transaction.  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.

“Mesirow Financial was instrumental in identifying a strong group of prospective strategic and financial buyers and conducting an effective transaction process. Our customers and employees will both benefit as Isleworth, Albion and S.I. Jacobson join together and continue to grow the company’s product offering.  Mesirow Financial’s advice and senior level leadership throughout the process resulted in a successful outcome for all parties involved,” said Larry Futterman, president and CEO of S.I. Jacobson.

 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).

“Mesirow Financial was honored to represent the owners and management of S.I. Jacobson in this process. We were happy to leverage our relationships in the specialty packaging and consumer products industries in order to pair S.I. Jacobson with knowledgeable financial sponsors that are committed to growing the Company,” said Jeffrey Golman, vice chairman and head of Mesirow Financial’s Investment Banking group.  “The company’s exceptional senior management team and strong growth opportunities combined with the strategic and financial support from Albion and Isleworth will provide S.I. Jacobson with a platform for future success in the specialty packaging industry.”

© 2013 PEPD • Private Equity’s Leading News Magazine • 1-23-13

Corinthian Capital Exits AVL Digital Group

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Corinthian Capital Group has completed the sale of its portfolio company AVL Digital Group, a self-publishing and distribution platform for independent content creators, to Stephens Capital Partners.

AVL Digital Group is a self-publishing and distribution platform for independent content creators such as musicians, filmmakers and authors, as well as a wide range of institutional clients.  The company’s multi-channel marketing model includes social marketing, web search optimization, email and catalog marketing.  Brands include CD Baby, HostBaby, Disc Makers, and BookBaby. The company is based in Pennsauken, NJ (www.cdbaby.com), (www.hostbaby.com), (www.discmakers.com), and (www.bookbaby.com).

Corinthian Capital supported management’s multi-brand strategy and helped transition a company known for providing CDs and DVDs to its clientele into an integrated provider of both physical media and digital services to a growing market of independent musicians, filmmakers, authors, and corporate clients.  AVL Digital Group accomplished this through strategic acquisitions and through numerous organic growth initiatives.  In 2012 the company released over 60,000 disc titles, and distributed over 110,000 titles digitally, with a total catalog under management of 4.5 million songs.

“Corinthian Capital was a great partner, encouraging us to leverage our leadership position in the independent music market to significantly expand our service offering,” said Tony van Veen, CEO of AVL Digital Group.  “Through their support, we were able to strategically position the company to achieve significant growth, while delivering affordably priced manufacturing and distribution services to hundreds of thousands of musicians and authors.”

Corinthian Capital invests in niche manufacturing, distribution, and service businesses with EBITDAs between $10 million and $30 million located primarily in North America.  Corinthian Capital is based in New York with offices located in Chicago and Boston (www.corinthiancap.com).

“The sale of AVL Digital caps a banner year for Corinthian, during which we completed 11 transactions, including the successful exit of two investments, four platform acquisitions, and five add-on investments to existing portfolio companies,” said Peter Van Raalte, CEO of Corinthian Capital.

The buyer of AVL Digital Group, Stephens Capital Partners, is the private equity arm of financial services firm Stephens, Inc.  The firm is based in Little Rock, AR (www.stephens.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 1-23-13

2013 Middle-Market M&A Outlook Available from Robert W. Baird & Co.

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Robert W. Baird & Co. has released its 2013 Middle-Market M&A Outlook. The new report runs 54 pages and has a significant amount of middle market data.

While not quite living up to high expectations, 2012 was a solid year overall in the global M&A market. The number of transactions was modestly below the all-time high reached in 2011, and announced dollar volume was slightly above the year-ago figure. The bellwether U.S. market, which accounted for 40% of deal activity and nearly half of dollar volume, marked an all-time high for transaction count while witnessing a moderate dollar volume decline. During 2012, positive forces such as well capitalized strategics and financial sponsors coupled with widespread credit availability were largely offset by uncertainties related to the global economy, government fiscal challenges, and Europe’s debt troubles, causing many prospective buyers and sellers to defer decisions on potential deals. However, global dollar volume in Q4 2012 was almost 50% above the average of the first three quarters of the year and reached the highest level since Q4 2007, possibly boding well for increased M&A activity in 2013.

In view of sound market fundamentals, global M&A activity is poised to expand in 2013. Both strategics and sponsors are in position to drive M&A activity based on pressure to deploy immense stores of dry powder. Private equity mandates to sell older holdings will boost the supply of attractive targets, while the appeal of M&A for corporates is enhanced in a growth-constrained economy.

Corporates Capitalizing on Opportunities.
Strategic acquirers are set for a busy 2013, as M&A is still high on the agendas of any corporate boards that have taken a wait-and-see approach of late. Corporates are looking to make appropriate use of large cash hoards (exceeding $2 trillion for U.S. companies) currently drawing a meager return. In addition, the credit markets have recently provided capital at historically low rates to both investment grade and speculative grade issuers. As usual, the middle market should see most of the M&A action, with companies less willing to place major strategic bets in a challenging economic environment. Due to muted growth expectations in developed markets, acquisitions will be a high priority for strategics seeking increased sales, scale economies, and operating leverage. A stabilizing economic outlook puts U.S. companies in position to follow through on planned M&A, while corporate leaders in Europe may remain cautious until GDP growth returns.

Private Equity in Prime Position. After heightened economic and policy uncertainty put many deals on hold late in 2012, financial sponsors have the means and motivation to buy and sell actively in 2013. Private equity firms seeking new platforms as well as bolt-on deals for existing holdings have access to debt capital at attractive terms in addition to more than $400 billion in uninvested committed capital, which has been supported by an improving fundraising environment. The expanding group of portfolio companies held by sponsors includes a large proportion near the end of their investment windows, resulting in sharp focus on achieving exits in 2013. Relative to the equity markets, M&A should remain an appealing means of realizing liquidity, as dollar volume for sponsor-backed IPOs dropped over 50% in 2012.

Tepid Economic Climate.
After slowing in 2012, global economic growth appears to be stabilizing at low levels entering 2013, pointing to a satisfactory backdrop for M&A activity. In the U.S., firming housing fundamentals and gradual labor market progress are likely to be offset by the impact of tax hikes on consumer spending. With austerity programs continuing in Europe, the European Central Bank projects a slight decline for the euro zone output in 2013, although a gradual recovery is seen beginning in the second half of the year. Faced with another year of weak economic conditions, Japan’s government is planning stimulus measures, while its corporates could remain aggressive outbound acquirers. Growth is expected to pick up in developing markets such as China and India after deceleration weighed on M&A trends in 2012. As in recent years, divergent outlooks for regional economies should fuel cross-border activity in 2013.

Favorable Credit Markets
Based on impressive issuance and fund flow data throughout 2012, the leveraged finance markets brought positive momentum into 2013. With central banks committed to maintaining low benchmark interest rates in 2013, liquidity should continue to flow across the credit markets. Furthermore, demand for yield should remain strong, particularly as global high yield default levels are again expected to track far below historical averages. As in 2012, terms in the leveraged loan market are likely to be more issuer-friendly for deals involving larger companies. In Europe, lagging credit market activity would benefit from better economic trends as well as greater confidence that sovereign debt issues are under control.

© 2013 PEPD • Private Equity’s Leading News Magazine • 1-23-13

Tamarix Capital Implements DealCloud’s Private Equity and Debt Modules

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Tamarix Capital has selected DealCloud’s Private Equity SaaS module to support its fund operations.  DealCloud is a provider of M&A software that supports the entire transaction process.  “Our day-to-day execution has become streamlined; DealCloud keeps us all in sync on execution activity and portfolio company updates. The platform’s industry and sector specific approach to sourcing and managing deal flow helps us organize our firm’s core activities,” said Tamarix Managing Principal Mark Hauser.

Tamarix diligenced a number of CRM and deal management solutions but selected DealCloud because, according to Principal Peter Rothschild, “DealCloud provided what we needed out of the box. We didn’t have to undergo a huge customization and implementation effort.” After a brief trial, the Tamarix team worked with DealCloud to quickly import historical data and learn their firm’s customized user interface.

“We’re thrilled to have Tamarix ramped up on our platform. I believe current and prospective investors in Tamarix’s funds will be impressed with the granular data and quick reporting that DealCloud provides,” said DealCloud President Ben Harrison.

Private equity groups, venture capital firms, corporate M&A departments, and family offices use DealCloud CRM systems to support daily operations in real time. DealCloud’s other products are Investment Banking DealCloud CRM, DealCloud DataRoom powered by SmartRoom, and the namesake DealCloud.com interactive networking and deal sourcing platform. The company is based in Charlotte, NC (www.dealcloud.com).

Tamarix Capital invests from $5 million to $15 million in middle market companies that have revenues of $10 million to $100 million and EBITDAs        from $3 million to $12 million.  Sectors of interest include business services, industrial and niche manufacturing, consumer products and services, distribution and logistics, and health care services. The firm is based in New York (www.tamarixcapital.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 1-23-13

Alvarez & Marsal Adds Senior Healthcare Executive

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Alvarez & Marsal has added Steve Geringer, a senior healthcare executive, to lead the firm’s private equity services efforts within A&M’s Healthcare Industry Group.  Mr. Geringer assumes the title of managing director and is based in New York.

“Steve’s addition underscores our focus on providing an integrated service offering to the private equity community,” said Michael Cole, healthcare industry leader of A&M’s Transaction Advisory Group. “The combination of A&M’s operational advisory capabilities and leading financial and accounting transaction advisory services has been embraced by healthcare private equity investors and we continue to invest in the growth of our healthcare private equity services practice.”

Mr. Geringer brings significant experience working with organizations focused on hospital management, outpatient services, managed care, pharmaceutical benefits, behavioral health and social services, and healthcare information technology.  He also serves as chairman of Amsurg Corp. and a director of Addus Homecare, both public corporations; chairman of Qualifacts Systems, and a director of Woundcare Specialists.

“We are excited to have someone with Steve’s qualifications and track record join us,” said Guy Sansone, head of A&M’s Healthcare Industry Group. “Private equity is a growing area of A&M’s healthcare business and Steve is an important addition to serving the full range of needs of private equity groups and their healthcare portfolio companies. His C-suite experience and his board service at private equity sponsored companies add to our appreciation of these groups’ investment considerations and performance objectives.”

Mr. Geringer’s past roles include serving as: chief executive officer of Infuscience (acquired by Bioscript); chairman and operating partner of CredenceHealth (acquired by Midas+ Solutions, a division of ACS, a unit of Xerox Corporation); director of CCRx Pharmaceutical Services (acquired by Omnicare); co-founder and chief executive officer of Clinical Pharmaceuticals (acquired by PCS Health Systems), and chief executive officer and president of PCS (later acquired by Eli Lilly & Co).

Alvarez & Marsal is a global professional services firm that specializes in turnaround management, operational performance improvement and business advisory services.  Within the healthcare sector, A&M works with management, boards of directors and stakeholders of not-for-profit and investor-owned healthcare providers, biopharmaceutical companies, payors, suppliers and others to improve operational, financial and clinical performance. The firm was founded in 1983 and is based in New York (www.alvarezandmarsal.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 1-23-13

Kristin Gilbert Promoted to Principal at Pine Brook

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Pine Brook Road Partners has promoted Kristin Gilbert to Principal on its financial services investment team. Ms. Gilbert, an investment professional with nine years of experience, joined Pine Brook’s financial services team in March 2010.

“Kristin has been a great addition to Pine Brook, and has worked on a number of our investments, including AloStar Bank of Commerce, Community Trust Financial Corporation and United PanAm Financial Corp.,” said William Spiegel, a managing director of Pine Brook. “I am pleased to recognize her contributions with this promotion.”

Prior to joining Pine Brook, Ms. Gilbert served as an investment director and a founding member of CVC Partners’ financial services team.  Previously she held positions at Madison Dearborn Partners and in Morgan Stanley’s Financial Institutions Group.  Ms. Gilbert holds a BA in Economics and Political Science from the University of North Carolina.

Pine Brook Road Partners invests in the energy and financial services sectors. Within the energy sector areas of particular interest include: exploration and production; oilfield services; crude oil, natural gas and petroleum products; transportation and storage; power generation; distribution and transmission; and bio fuels and renewable resources. Within the financial services sector areas of particular interest include: property, casualty and specialty Insurance and reinsurance; life and health insurance; depository Institutions; asset management; specialty finance; servicing, distribution and origination.  The firm was founded in 2006 and is based in New York (www.pinebrookpartners.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 1-23-13