Archives for March 5, 2013

Lion Acquires Pitney Bowes Mail Services Division

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Lion Equity Partners has acquired the International Mail Services – U.S. Division from Pitney Bowes. The business, which has been renamed IMEX Global Solutions, is a provider of international mail logistics and distribution services to Fortune 1000 corporations and global e-commerce companies.

“This transaction paves the way for IMEX to offer the most comprehensive international mailing services in the industry,” said Jim Levitas, Partner of Lion Equity. “As a former division of Pitney Bowes, IMEX has benefitted greatly from substantial investments in human capital, infrastructure and technology and also inherits an unparalleled network of global carrier relationships.”

IMEX consolidates and distributes over 40 million pounds of parcels, print media and communications to over 220 countries every year. This is accomplished through strategically located consolidation centers, state-of-the-art equipment, and long-term relationships with the world’s leading carriers, including the United States Postal Service, Canada Post and an exclusive alliance with the Royal Mail. IMEX is headquartered in Newark, NJ with additional facilities in Itasca, IL; Elk Grove Village, IL; and Corona, CA (www.imexglobalsolutions.com).

Lion Equity Partners specializing in acquiring controlling interests in small- to middle-market businesses across multiple industries. Typical transaction values for the firm are between $5 million and $50 million. Lion Equity’s investment strategy is centered on creating value in its portfolio companies through a combination of organic growth and add-on acquisitions. The firm is based in Denver (www.lionequity.com).

“We are very excited about our future,” IMEX Chief Executive Officer, Brian Fleisher said. “Our commitment to excellence and our reliable and accurate service to our clients have allowed IMEX to differentiate itself in the marketplace. The combination of IMEX’s deep industry expertise along with strategic direction and capital from Lion Equity, positions our company extremely well for success.”

© 2013 PEPD • Private Equity’s Leading News Magazine • 3-5-13

Blue Point Capital Partners Acquires Shnier

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Blue Point Capital Partners has acquired Shnier-Gesco (Shnier), a Canadian distributor of floor coverings. Shnier represents the 15th platform company for Blue Point II, a 2006 vintage middle-market buyout fund with $400 million in committed capital.

Shnier is the largest distributor of floor coverings in Canada. The company sells proprietary and branded products and programs spanning all flooring categories through an established base of independent retailers. Shnier, founded in 1938, operates 5 warehouses across Canada and is headquartered in Brampton, Ontario (www.shnier.ca).

“Shnier is a demonstrated leader in the Canadian floor covering marketplace with an impeccable reputation for quality,” said Ed duDomaine, president and chief executive officer of Shnier. “Blue Point’s strategic and operational focus made it the obvious choice and ideal partner to execute this next phase of growth for the company. We remain focused on serving our customers with high-quality flooring solutions and unsurpassed levels of service. The best is yet to come for Shnier.”

Blue Point Capital Partners is a lower-middle-market private equity firm that invests in manufacturing, distribution and service businesses generating $20 million to $200 million in revenue. The firm has over $800 million in committed capital and has offices in Charlotte, NC; Cleveland, OH; Seattle, WA and Shanghai, China (www.bluepointcapital.com).

“We believe Shnier’s proven management team and strong legacy in the flooring market create a dynamic platform with actionable organic and strategic opportunities,” said Sean Ward, a partner with Blue Point. “We look forward to a successful and rewarding partnership together.”

© 2013 PEPD • Private Equity’s Leading News Magazine • 3-5-13

The Gores Group Acquires GE Healthcare Strategic Sourcing

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The Gores Group has completed the acquisition of GE Healthcare Strategic Sourcing from GE Healthcare. Post acquisition, the company will operate under the name Meridian Medical Management.

GE Healthcare Strategic Sourcing is a provider of electronic billing and electronic medical records outsourcing services to the healthcare industry. The group was founded nearly ten years ago and is based in Wilbraham, MA (no website found).

“GE Healthcare Strategic Sourcing occupies a unique position in the market, with the ability to provide top-tier electronic medical record and outsourced revenue cycle management to very large multispecialty physician groups. The existing management team’s expertise and state of the art technology provides an exciting opportunity for growth,” said Rob Gontarek, the company’s newly appointed CEO.

The Gores Group makes control investments in non-core, underperforming or undervalued businesses in the United States and Europe. The firm maintains an in-house team of over 60 M&A and operations professionals in the US and Europe. The Gores Group was founded in 1987 and has offices in Los Angeles, CA; Boulder, CO and London, UK (www.gores.com).

“The Gores Group is excited about the acquisition of GE Healthcare Strategic Sourcing,” said Victor Otley, Managing Director for The Gores Group. “We believe this platform offers great opportunity to continue the delivery of quality services using the GE Healthcare technology platform. We look forward to working with management and employees as we build on the services and capabilities as an independent platform.”

© 2013 PEPD • Private Equity’s Leading News Magazine • 3-5-13

KRG Capital Acquires FetterGroup’s Paint & Coatings Label Business

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Fort Dearborn Company, a supplier of cut & stack, pressure sensitive, roll-fed and shrink sleeve labels, and a portfolio company of KRG Capital Partners, has completed the acquisition of FetterGroup’s paint & coating labels business.

KRG made its initial investment in Fort Dearborn Company in August 2010 and the acquisition of FetterGroup’s paint & coatings label business represents the 179th investment for KRG since its inception.

Fetter’s paint & coating labels business is one of the largest label providers to the paint and coatings industry. The business is based in Louisville, KY (www.fettergroup/paint).

Fort Dearborn Company is a supplier of high-impact decorative labels for the beverage, food, household products, nutraceutical, paint and coatings, personal care, private label/retail and spirits markets. The company provides cut & stack, pressure sensitive, roll-fed and shrink sleeve labels across multiple print technologies including digital, flexographic, offset lithographic and rotogravure. Headquartered in Elk Grove, IL the company has ten operating divisions in North America and approximately 1,200 employees (www.fortdearborn.com).

KRG specializes in acquiring and recapitalizing unique and profitable middle-market companies. Since inception, KRG has invested in 45 platform companies and has completed 134 add-on acquisitions for those platforms. Founded in 1996, KRG has over $4 billion of capital under management and is based in Denver (www.krgcapital.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 3-5-13

Salt Creek Capital Acquires Warne Scope Mounts

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Salt Creek Capital has acquired Warne Scope Mounts, a supplier of riflescope accessories. Co-investing with Salt Creek on this transaction are new CEO Dan Goetz and C3 Capital.

“We are very pleased to have partnered with our executive partner, Dan Goetz and C3 Capital, to complete the acquisition of Warne”, said Dan Mytels, Managing Director of Salt Creek Capital. “Warne represents an industry leading company with attractive growth potential and strong market leadership.”

Warne is a supplier of riflescope accessories to the OEM and retail channels, including the sporting, hunting, and tactical-law enforcement firearms markets. The company designs and manufactures scope mounting systems, including bases, mounts, rings and accessories. Warne was founded in 1991 and is based in Tualatin, OR (www.warnescopemounts.com).

“We are all excited about the opportunity at Warne. The company has a dedicated and passionate team in place and a strong reputation for producing premium products. I look forward to working with the Salt Creek team to position the business for continued growth,” said Dan Goetz who will become the new CEO of the company.

Salt Creek Capital invests in lower middle market companies located anywhere in the US that have $3 million to $50 million in revenue. Sectors of interest include business services, distribution, energy services, franchising, logistics and specialty finance. The firm is based in Menlo Park, CA (www.saltcreekcap.com).

“We couldn’t be more pleased about investing in Warne and its management team. Dan Goetz brings a new set of talents and experiences to the organization, and we are confident that this will take Warne, which already has a great brand and makes industry-leading products, to the next level,” said Steve Swartzman, a C3 partner,

C3 Capital provides capital for businesses to finance later stage growth, strategic acquisitions, ownership transitions, and recapitalizations. The firm makes investments of $2 million to $10 million in the form of subordinated debt or preferred equity. C3 manages three funds with approximately $430 million in assets. The firm was founded in 1994 and is based in Kansas City, MO with additional offices in Dallas, TX and Phoenix, AZ (www.c3cap.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 3-5-13

Investcorp Exits IPH Group

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Investcorp has sold its portfolio company IPH Group, a distributor of industrial supplies, to PAI Partners, a Paris-based European private equity firm in a transaction that generated in excess of €210 million of realization proceeds for Investcorp and its clients.

Investcorp first invested in the IPH Group in 2006 and during the term of its ownership IPH Group tripled its sales from €293 million to €860 million and grew EBITDA from €12 million to over €62 million in 2012.

IPH Group distributes a range of industrial supply products and is represented in Europe by the following national networks: Orexad and Anfidis in France; Zitec in Germany; Biesheuvel Techniek in the Netherlands; D’hont in Belgium; and Novotech in Romania.  The company has approximately 3,000 employees and was founded in 1987. IPH Group is based in Lyon, France (www.group-iph.com).

“IPH Group is an excellent example of how we can add value in our portfolio companies and transform a business from being a domestic champion to a successful pan-European leader. From the outset, we worked closely with the management team to build IPH Group’s presence in France,” said Maud Brown, a Principal on Investcorp’s corporate investment team. “Since its acquisition of IPH Group in June 2006, Investcorp has supported three major add-on acquisitions by the company enabling it to build its leadership position and expand its international footprint. To achieve such growth despite the challenging economic conditions experienced across Europe is testament to the strength of our corporate investment team.”

Investcorp invests in mid-size companies operating in an array of industry sectors that have total enterprise values of between $200 million and $1 billion and are located in North America or Western Europe. The group has offices in London and New York (www.investcorp.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 3-5-13

Kayne Anderson Completes Fundraise for Senior Fund

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Kayne Anderson Capital Advisors has completed fundraising for Kayne Senior Credit Fund, L.P. (“KSCF”) at $350 million. KSCF is the newest addition to Kayne’s Middle Market Credit Platform which focuses on providing debt capital for traditional middle market companies. The KSCF team is based in Chicago and is led by Al Ricchio, Andy Marek, Ken Leonard and Doug Goodwillie.

“The successful completion of our inaugural fundraise for senior credit will allow us to renew our focus in 2013 on what we’ve always done, provide financing flexibility and certainty to private equity sponsors and stand-alone companies in the middle market,” said Al Ricchio, Managing Partner, KSCF.

The new fund will provide senior secured credit facilities to sponsored and non-sponsored middle market borrowers with $10 million to $50 million in EBITDA and seeks to hold $10 million to $50 million positions in senior, unitranche, split-lien and last-out loans. To date, KSCF has completed four transactions totaling $71 million.

The managing partners of KSCP joined Kayne Anderson as a unit in September 2011. The team has an extensive history (over two decades) of working together in the North American senior credit middle market, most recently as the co-founders of Dymas Capital and prior to that at GE Capital/Heller Financial. They have more than 70 years of combined lending experience and have collectively completed over 500 transactions representing over $10 billion in underwritten middle market bank loan commitments over multiple credit cycles.

Kayne’s Middle Market Credit Platform is led by co-managing partners Ed Cerny and Dave Petrucco. In addition to KSCF, the platform manages other credit funds all focused on companies in the traditional middle market.

“We are very pleased to have expanded our platform to include senior secured lending for our clients. Al, Andy, and Ken are pioneers in the world of middle market lending and this team represents one of the most talented and respected group of professionals in the marketplace. Their presence in Chicago expands our platform’s geographic footprint, which includes New York City, Los Angeles and Houston. Our platform can solve for the borrowing needs of our clients in a way we believe very few competitors can match across senior, junior secured and unitranche loans, mezzanine securities and equity co-investments,” said Ed Cerny, Managing Partner, Kayne Anderson Middle Market Credit Platform.

Kayne Anderson, founded in 1984, is an alternative investment firm with $19.4 billion in assets under management. The firm focuses on niche investing in energy, energy infrastructure, growth equity, specialty real estate and middle market credit. Kayne Anderson is entirely owned by its investment professionals and management. The firm is headquartered in Los Angeles with offices in Houston, New York, Chicago, Denver, Dallas and Atlanta (www.KayneCapital.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 3-5-13

H.I.G. Capital Hits Hard Cap of Fund 5

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H.I.G. Capital has closed H.I.G. Capital Partners V at its $1 billion hard cap. The fund will continue the strategy of H.I.G. Capital’s four predecessor funds, focusing on private equity, buyout and equity-related investments in lower middle-market companies primarily in the United States.

“We are very happy with how quickly we were able to raise H.I.G.’s fifth buyout fund and, in particular, that the fund was significantly over-subscribed from existing H.I.G. investors,” said Sami Mnaymneh and Tony Tamer, co-founders and Managing Partners of H.I.G. Capital.

H.I.G. Capital specializes in providing capital to small and medium-sized companies and invests in management-led buyouts and recapitalizations of manufacturing or service businesses. Since its founding, H.I.G. has invested in and managed more than 200 companies and the firm’s current portfolio includes companies with combined revenues in excess of $8 billion. H.I.G. Capital has more than $11 billion of equity capital under management. The firm was founded in 1993 and is based in Miami with additional offices in Atlanta, Boston, Chicago, Dallas, New York, San Francisco, London, Hamburg, Madrid, Paris, and Rio de Janeiro (www.higcapital.com).

“The new fund will allow us to continue our successful strategy of investing in privately-held companies and non-core subsidiaries of larger companies that present significant opportunities for earnings improvement and value creation,” said Doug Berman, Executive Managing Director of H.I.G. Capital.

© 2013 PEPD • Private Equity’s Leading News Magazine • 3-5-13

Steve Judge Explains Why Carried Interest Is a Capital Gain

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Steve Judge, the president and chief executive of the Private Equity Growth Capital Council, has written a new article for The New York Times, “Why Carried Interest Is a Capital Gain”.  A link to the entire article is available below.

Here’s an excerpt: “’In order to understand why carried interest is a capital gain, we should first examine what private equity does. Private equity is an industry of investors with management expertise and vision who form partnerships with pension funds, university endowments and charitable foundations to buy companies. It is the epitome of patient capital, investing in promising companies poised for growth and those in need of a turnaround.”

Click HERE to read the entire article in The New York Times.

The Private Equity Growth Capital Council is an advocacy, communications and research organization and resource center established to develop, analyze and distribute information about the private equity and growth capital investment industry and its contributions to the national and global economy. Established in 2007, the PEGCC is based in Washington, D.C. (www.pegcc.org).

© 2013 PEPD • Private Equity’s Leading News Magazine • 3-5-13

CPPIB Completes $606 Million Secondaries Transaction

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Canada Pension Plan Investment Board (CPPIB) has completed a secondary transaction to acquire a portfolio of food assets through a special purpose vehicle from the HM Capital Sector Performance Fund and related co-investors for $468 million.

CPPIB will also commit $138 million to a newly-formed private equity fund, Kainos Capital Partners. The Food and Consumer Products team of HM Capital, led by Andrew Rosen, will manage both the assets that CPPIB has acquired as well as manage the Kainos Capital fund, focusing on investments in the food sector.

“We are excited to complete another significant and innovative transaction in the secondary private equity market,” said André Bourbonnais, Senior Vice-President, Private Investments, CPPIB. “This was a unique opportunity for us to partner with one of the most successful food investment franchises and purchase a portfolio of well-managed quality food companies, each with market-leading positions. We look forward to partnering with Kainos Capital in creating value over the long term for these assets and the new Kainos fund.”

The Canada Pension Plan Investment Board invests in public equities, private equities, real estate, inflation-linked bonds, infrastructure and fixed income instruments. The board is governed and managed independently of the Canada Pension Plan and at arm’s length from governments. The CPPIB is headquartered in Toronto, with offices in London and Hong Kong (www.cppib.ca).

“As one of the largest and most active participants in the secondary private equity market, CPPIB has invested over $5 billion in the past five years. We expect to deploy significant amounts of additional capital in this market over the next five years,” said Mr. Bourbonnais. “We will continue to leverage our comparative advantages as a long-term investor with deep internal capabilities to provide solutions to complex transactions.”

© 2013 PEPD • Private Equity’s Leading News Magazine • 3-5-13

Chicago Growth Partners Completes Dividend Recapitalization of Advanced Pain Management

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Chicago Growth Partners has completed a dividend recapitalization of Advanced Pain Management (APM), one of the largest pain management groups in the country. Chicago Growth Partners acquired APM in December 2010. Since CGP’s acquisition the company has experienced strong growth in the demand for its services which enabled this dividend recapitalization.

The recapitalization was funded with excess cash from the company’s balance sheet and a third party debt facility. Proceeds from the transaction were used to refinance the company’s existing debt and pay a dividend to shareholders. This transaction was structured to provide the company with additional operating flexibility as well as expand the capital available to support APM’s organic growth and fund potential acquisitions.

APM has 30 board certified physicians performing interventional pain management procedures on patients suffering from chronic neck and back pain. The company designs custom treatment regiments that include interventional procedures, medication management, and complementary services such as psychotherapy, massage and acupuncture. APM’s treatment programs are designed to delay or eliminate the need for invasive and expensive back surgery, reduce a patient’s reliance on Schedule II drugs, and improve the patient’s overall quality of life. In 2012, the company had approximately 180,000 patient encounters at over 40 ambulatory surgical center and clinic locations across Wisconsin and Minnesota. APM was founded in 1999 and is based in Greenfield, WI (www.apmhealth.com).

Chicago Growth Partners invests from $15 million to $75 million of equity in companies with revenues from $15 million to $150 million. The firm targets four primary sectors: education; healthcare products and services; tech-enabled services; and industrial technology. CGP is currently investing its second fund, Chicago Growth Partners II, with $500 million of capital commitments. The firm is based in Chicago (www.cgp.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 3-5-13

DealCloud Selected by Brinkmere to Handle CRM

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Brinkmere Capital has selected DealCloud as its CRM platform to track key relationships, transaction flow and business development activities of the firm.

Brinkmere, which provides investment capital to small businesses to support long-term growth and operational initiatives, will leverage DealCloud’s ability to sort data and connect contacts through multiple relationships and activities to source new investment opportunities.

“The DealCloud platform has made all of Brinkmere’s daily initiatives easier to track and reference,” said Brinkmere Founder and Managing Director Russell Beard. “It allows me to capture the value of business development activities and maximize operational efficiency in real time from any device.”

DealCloud also allows Brinkmere to manage potential sources of partner capital and report on portfolio activity. Selecting a partnership with DealCloud was a key decision for Mr. Beard in building Brinkmere, as he recognized implementation of a powerful CRM to be essential to business processes. “I see DealCloud CRM as a crucial component to success for the firm in the long term,” he said.

A key differentiator for Brinkmere was the fact that the PE DealCloud solution was built from the ground up for the principal investing industry and can easily be customized to each firm’s unique processes. The DealCloud and Brinkmere teams have worked hand in hand to put in place configurations that are tailored to the firm’s operations.

“Every client is different,” said Ben Harrison, president of DealCloud. “Adapting DealCloud to those differences is a constant reminder to our team of the need for a highly flexible yet industry-specific solution. A CRM system that helps sell widgets needs to be structured very differently from a CRM platform that supports the entire private equity investment cycle.”

Brinkmere is a Southeastern-based private investment firm specializing in acquiring and developing small businesses. The firm is based in Jacksonville, FL (www.brinkmere.com).

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 full suite of product offerings includes the DealCloud CRM, DealCloud DataRoom powered by SmartRoom, and the DealCloud.com interactive networking and deal execution platform. The company is based in Charlotte, NC (www.dealcloud.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 3-5-13