Archives for March 6, 2013

Peterson Partners Closes Fund 8 at $140 Million

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Peterson Partners has raised its eighth fund with $140 million in capital commitments. This is the largest fund ever raised by Peterson Partners.

“This new fund enables us to continue to serve as reliable capital partners to our current and future portfolio companies,” said Dan Peterson, managing partner of Peterson Partners. “We look forward to continuing to help outstanding entrepreneurs build great businesses in the years ahead. We are gratified that our limited partners have trusted us to find and nurture the kinds of leaders and companies that have provided thousands of jobs at home and abroad.”

Peterson Partners will use the proceeds of its latest fund to make private equity investments of between $2 million and $15 million. The firm provides growth and buyout capital for companies with revenue between $10 million and $50 million.

The current Peterson Partners portfolio includes a collection of companies across various industries, including JetBlue Airways and Azul Airlines in the travel industry, Ladder Capital in financial services, QMC in communications infrastructure, CLEO in software, Integra in healthcare services, and Packsize in the supply chain management industry.

Peterson Partners is led by Founder Joel Peterson, and Partners Brandon Cope and Dan Peterson. Joel Peterson, former managing partner at Trammell Crow Company, currently serves as chairman of JetBlue Airways, is a professor at Stanford’s Graduate School of Business, and sits on the Board of Overseers at the Hoover Institution. Dan Peterson, with deep experience investing in a variety of industries, including automotive, financial services and high tech, has served as managing director at Z Capital and partner at Trammell Crow. Brandon Cope, previously with Peterson Ventures and McKinsey & Company, has led several investments in a variety of industries and serves on a number of boards of directors.

Peterson Partners was founded in 1995 and has managed over $350 million in committed capital through seven funds. The firm is based in Salt Lake City (www.petersonpartnerslp.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 3-6-13

MCG Capital Backs Trive’s Acquisition of Huron

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MCG Capital Corporation has closed a $13.0 million subordinated term loan investment in Huron to back the acquisition of the company by Trive Capital from SunTx Capital Partners.

Huron is a supplier of value-added tubular assemblies and precision components used in automotive engine, transmission, fuel and climate control systems. Customers of Huron include some of the world’s largest car manufacturers, as well as key automotive OEM and Tier I suppliers. Huron was founded in 1943 and is based in Lexington, MI (www.huroninc.com).

“MCG is thrilled to partner with both Trive and Huron on this transaction,” said Jordan Walter, Vice President of MCG. “We believe that Trive’s experience in the automotive sector combined with the strength of Huron’s management team and complex tubular product capabilities position the company well to grow as engine designs evolve to meet future efficiency standards.”

Trive Capital invests from $5 million to $40 million in US based middle market companies that have revenues from $30 million to $500 million. Sectors of interest include automotive & transportation; aerospace & defense; building products; construction & infrastructure; consumer goods; energy services; healthcare; manufacturing/industrials; chemicals; distribution; business & professional services; and communications. The firm is based in Dallas (www.trivecapital.com).

“We have a long-term relationship with the MCG Capital team and are always impressed with MCG’s professionalism and responsiveness. We look forward to having MCG as a partner to help fuel Huron’s continued success going forward,” said Blake Bonner, Vice President at Trive.

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 • 3-6-13

ORIX Backs Florida Capital Partners’ Portfolio Company

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ORIX Leveraged Finance has made a junior capital investment in United States Environmental Services, a portfolio company of Florida Capital Partners. Proceeds of the new financing will be used to recapitalize the company and support continuing growth of the business. ORIX Leveraged Finance served as lead arranger, administrative agent and sole lender.

United States Environmental Services (USES) provides specialized industrial, environmental and maritime cleaning and remediation services to various end-market customers including petroleum refineries, chemical and heavy manufacturers, bulk storage facilities, maritime and shipping companies, and power generators in the Gulf States. The company is based in Houston (www.usesgroup.com).

“We are pleased to continue our relationship with USES to support the significant growth of the business executed by the proven ownership group and management team. The cleaning solutions and services provided by USES are a critical component in keeping key industrial facilities clean and well maintained, as well as helping to keep our environment clean and safe following environmental adversities,” said Ted Thorp, co-head of ORIX Leveraged Finance.

ORIX Leveraged Finance, a business unit of ORIX USA Corporation, provides from $5 million to $50 million of debt and equity capital to small and mid-sized businesses that have from $5 million to $30 million of EBITDA. ORIX Leveraged Finance is based in Dallas (www.orixleveragedfinance.com)

“We’re excited to once again partner with ORIX Leveraged Finance. They provided the ability to structure an attractive junior capital investment to further support our continued success in the business,” said Felix Wong, managing director at Florida Capital Partners.

© 2013 PEPD • Private Equity’s Leading News Magazine • 3-6-13

Texas Public Employee Pensions Exceed Assumptions in 2012

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Texas public employee pensions invested heavily in U.S. and international stocks in 2012 to exceed the long-term investment rate of return assumptions needed for the retirement benefits of retiring police, firefighters and municipal workers, according to a report released today at the 24th Annual Conference of the Texas Association of Public Employee Retirement Systems. A link to the TEXPERS’ “Report on the Asset Allocation and Investment Performance of Texas Public Employee Retirement Systems” is available at the end of this article.

The TEXPERS report shows that the average asset allocation of respondents to its annual survey was 26.0% percent in U.S. equity, 17.5% in non-U.S. equity, 26.1% in fixed income, 10.2% in real estate, 7.7% in private equity and 12.5% in other asset classes. The 52 survey respondents had $23.8 billion in total market value in 2012, compared to $21.4 billion for 54 reporting respondents in 2011.

And two key long-term measures for the success of pension system investments – the 10- and 20-year average rates of return – came in at composite averages of 8.9% and 8.3% respectively compared to the average actuarial investment return assumption of 8.1%. Overall, Texas’ local pensions beat the 8.1% composite average assumption rate in the one-, three-, ten- and 20-year return periods. The five and 15-year returns came in below the assumption rate, reflecting the bear markets of 2008 and 2002.

“Texas pension systems are doing a great job of staying focused on long-term investment horizons, reflecting their effective handling of financial markets, economies, and the manner in which benefits are paid out over time to public sector retirees,” said Max Patterson, the executive director for TEXPERS, an organization with more than 80 pension plans and representing nearly 300,000 individuals. “These long-term returns are good indicators of the overall positive health of Texas’ local public pensions.”

Mr. Patterson acknowledged the following standout systems for their average yearly performance over the 20-year period ending September 2012:

  • Dallas Police and Fire Pension System 9.11 percent
  • El Paso Firemen and Policemen’s Pension Fund 8.81 percent
  • Houston Municipal Employees Pension System 8.79 percent
  • Austin Police Retirement System 8.77 percent

The Texas Association of Public Employee Retirement Systems (TEXPERS) is a statewide voluntary nonprofit association to provide quality education to trustees, administrators, professional service providers and employee groups and associations engaged or interested in the management of public employee retirement systems. Today, TEXPERS’ member systems represent approximately 300,000 active and retired participants and approximately $22 billion in assets. The organization is based in Houston (www.TEXPERS.org).

To download a free copy of the TEXPER’s report, “Asset Allocation and Investment Performance of Texas Public Employee Retirement Systems”, click HERE.

© 2013 PEPD • Private Equity’s Leading News Magazine • 3-6-13

AUA Private Equity Acquires Associated Foods

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AUA Private Equity Partners has completed a recapitalization of Associated Foods Holdings in partnership with the company’s owners, Harry Laufer and Ira Gober. Messrs. Laufer and Gober, Associated’s co-Chief Executive Officers, will continue to lead the company through its next stage of growth with AUA Equity.

“We are pleased to partner with Harry Laufer and Ira Gober who are true icons in the New York City supermarket industry. Associated has an outstanding business model and Harry and Ira have done a tremendous job building the company over the past thirty years. We look forward to partnering with them to help grow the company and increase its profitability,” said Andy Unanue, Managing Partner of AUA Equity.

Associated is a specialty distributor of grocery products to branded independent (predominately Hispanic owned) retail supermarkets in the New York metropolitan area. Associated provides grocery distribution, financing, marketing and promotional services to approximately 250 independently owned and operated grocery stores, which typically carry the “Associated” or “Compare” trade name. The company was founded in 1954 and is based in Hewlett, NY (www.associatedsupermarkets.com).

“This is a quintessential investment that fits squarely within AUA Equity’s wheelhouse – a Hispanic-oriented and family-owned business. Our investment team’s complementary skill set and appreciation, understanding, and know-how of the industry allowed us to successfully consummate this recapitalization. I am proud to be connected to a company that has done so much for the New York City Hispanic supermarket community,” said Mr. Unanue.

In addition to Mr. Unanue, the AUA Equity deal team was led by Partners Steven Flyer and David Benyaminy, Vice Presidents Kyce Chihi and Nancy Rocha and Associate Jack Lin.

AUA Equity’s strategic partnership with Associated’s owners and management team will allow the company to accelerate its growth by adding new stores to its existing network and increase its financing capacity to its customers for remodeling and expansion.

“Over the past few years we have been thinking about bringing in a strategic investor and I believe that we have now found the right partner to help accelerate our growth plans. We are excited to be in partnership with the AUA Equity team. They understand our Hispanic customer base and their collaborative approach has shown me that they will add true value,” said Ira Gober.

“We have known Andy and his father Joe for many years and we believe that Andy’s experience in the Hispanic market will allow Associated to continue to successfully expand our presence in New York City and other markets,” said Harry Laufer.

AUA Private Equity Partners makes equity investments in companies in the consumer, media and business services sectors with a particular focus on Hispanic-oriented companies and family-owned businesses located in the United States. The firm invests from $10 million to $30 million of equity in companies that generate $3 million to $15 million in EBITDA. AUA Equity makes control and significant minority investments in a variety of transactions and structures including: traditional leveraged buyouts; growth equity; recapitalizations; and roll-up strategies. The firm is based in New York (www.auaequity.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 3-6-13

Entrepreneur Partners Invests in Northern Brewer

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Entrepreneur Partners has made an investment in Northern Brewer, a retailer of home brewing and home wine making supplies.

Northern Brewer is a multichannel retailer of home brewing and home wine making supplies. The company operates three retail locations in Minneapolis, Saint Paul, and Milwaukee and operates a 36,000 square foot fulfillment center to fulfill orders sourced through its catalogs and website. Northern Brewer was founded in 1993 and has over 100 employees. The company is based in Roseville, MN (www.northernbrewer.com).

Entrepreneur Partners makes control and minority investments of $3 million to $40 million in business-to-business and business-to-consumer multi-channel direct marketers that have revenues from $10 million to $250 million and EBITDAs of $2 million or more. The partners of the firm include veteran private equity professionals, experienced operating executives and successful entrepreneurs from the direct marketing field. The firm is based in Philadelphia (www.entrepreneurpartners.com).

Golub Capital was the Sole Bookrunner and Administrative Agent on a debt facility to support the growth financing of Northern Brewer by Entrepreneur Partners.

“Golub Capital provided a compelling financing solution and exhibited a deep understanding of Northern Brewer, which provided us with the confidence they would deliver a sound execution,” said Salem Shuchman, Managing Partner at Entrepreneur Partners. “Golub Capital exceeded our high expectations for a financing partner.”

Golub offers buy-and-hold products ranging from $10 million to $75 million and includes one-loan financings, senior, 2nd lien and subordinated debt, preferred stock and co-investment equity. The firm also underwrites and syndicates first lien loans up to $250 million. Golub Capital will hold up to $200 million per transaction. Industries of interest include consumer products, business and consumer services, defense, manufacturing, value-added distribution, media, healthcare services and restaurants. In addition to its New York headquarters, Golub also has offices in Atlanta and Chicago (www.golubcapital.com).

“Northern Brewer is the top retailer within the home brewing industry, and we are excited to support the company as it enters its next phase of growth. Entrepreneur Partners has proven to be a strong partner through their expertise within the direct marketing sector,” said Andy Steuerman, Head of Middle Market Lending at Golub Capital. “We are excited to partner with this exceptional senior management team and sponsor.”

© 2013 PEPD • Private Equity’s Leading News Magazine • 3-6-13

Veronis Suhler Stevenson Acquires Incentives Advisors

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Tax Credit Co. (“TCC”), a provider of tax incentive consulting, administration and technology and a portfolio company of Veronis Suhler Stevenson, has acquired Incentives Advisors (“IA”), a government incentives technology and services provider, from Workstream, Inc.

The acquisition of IA is the first transaction since TCC received an investment in November 2012 from Veronis Suhler Stevenson to accelerate organic growth and pursue add-on acquisitions in a highly fragmented industry. “We are very pleased to complete this acquisition, which extends TCC’s leadership position in the tax credit and incentive solutions industry,” said Michael Kessler, Managing Director of Veronis Suhler Stevenson.

Incentives Advisors is a provider of services to assist businesses in maximize available government incentives. IA’s programs include hiring-related tax credits and incentives, cash training grants, negotiated incentives, cost segregation studies and green incentives. The company is headquartered in Los Angeles (www.incentivesadvisors.com).

Tax Credit Co. is a national provider of tax incentive consulting, administration and technology, serving clients from the Fortune 100 to small businesses. Tax Credit Co. helps clients increase earnings by optimizing the process of obtaining state and federal tax incentives, including state and federal research and development tax credits, state enterprise zone tax credits, national hiring incentives such as the Work Opportunity Tax Credit and other state and federal programs. Tax Credit Co.’s proprietary, next-generation software platform manages national tax credit screening and compliance for large, complex organizations. The company is headquartered in Los Angeles (www.taxcreditco.com).

The acquisition of IA strengthens TCC’s position as an industry leader by adding IA’s programs in training grants, negotiated incentives, and other government programs, expanding TCC’s market penetration and enhancing its growing Work Opportunity Tax Credit business for national employees.

“Together, Tax Credit Co. and Incentives Advisors create a uniquely positioned business in the tax incentives market,” says Bill Becker, President, CEO and co-founder of IA, based in Phoenix, Arizona. “The combination of TCC’s market leadership in research & development credits, WOTC, and California incentives, with IA’s comprehensive hiring incentive screening technology and expertise in nationwide incentive programs establishes our leading market position. Businesses become more profitable by taking advantage of available government dollars, and we have been delivering these valuable incentives through seamlessly integrated solutions with valued partners such as Oracle/Taleo, HRsmart and Snagajob. We now are excited to join forces with TCC to help employers maximize these benefits with an even broader solution.”

Veronis Suhler Stevenson is a private equity and debt capital fund management company that invests in the media, information and education industries in North America and Europe. The firm provides capital for buyouts, recapitalizations, growth financings and strategic acquisitions to companies and management teams with a goal to build companies both organically and through a focused add-on acquisition program. Since the closing of the first VSS buyout fund in 1987, VSS has managed four buyout funds and two structured capital funds with aggregate committed capital in excess of $3.1 billion. The six funds have to date invested approximately $2.8 billion in 72 portfolio companies which have in turn completed over 320 add-on acquisitions. Veronis Suhler Stevenson is based in New York (www.vss.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 3-6-13

DW Healthcare Partners Invests in Health & Safety Institute and Summit Training Source

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DW Healthcare Partners has made an investment in Health & Safety Institute, an emergency care and response training organization. The investment was made through the firm’s third investment fund.

“Health & Safety Institute focuses on providing high quality health and safety training products and solutions to its customers worldwide. Now collaborating with DW Healthcare Partners, we have the expertise and strategic corporate guidance to transform our traditional publishing and training company into a technology-powered solutions provider in the occupational safety, health and compliance industry,” said Bill Clendenen, CEO of Health & Safety Institute.

Health & Safety Institute (HIS) is an emergency care and response training organization. The company was founded in 1978 and is based in Eugene, OR (www.hsi.com).

“We are very pleased to be partnering with Health and Safety Institute. Bill Clendenen and his team have positioned the company well with technically-superior and highly-relevant training platforms so that together, we can take advantage of the significant growth opportunities ahead of us in this technology-driven arena of healthcare compliance and education,” said Andrew Carragher, co-founder and Managing Director of DW Healthcare Partners.

After completing the HIS acquisition, DW Healthcare Partners immediately made an add-on acquisition for the company with the purchase of Summit Training Source, a provider of environmental, health and safety compliance training materials. Summit Training Source was founded in 1981 and is based in Grand Rapids, MI (www.safetyontheweb.com).

DW Healthcare Partners is a private equity firm focused exclusively on the healthcare industry. The firm manages over $500 million in committed capital and invests in profitable healthcare companies with proven management teams. DW Healthcare Partners is currently seeking investment opportunities for its third fund which represents $265 million of committed capital. The firm is based in Park City, UT (www.dwhp.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 3-6-13

GCP Capital Partners Exits Acrisure

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GCP Capital Partners, a middle market private equity firm, has sold its interests in Acrisure to Genstar Capital. The sale was a successful outcome for GCP following its $20 million investment in Acrisure in 2010 in order to support the company’s acquisition growth plan.

Acrisure’s product lines include property & casualty, employee benefits and related third party administrator services, human resource outsourcing, loss & claims management, surety bonding and personal lines coverage. The company was co-founded in 2005 by CEO Greg Williams to acquire independent insurance agencies across the Midwest and since then has completed 26 acquisitions. The company is based in Grand Rapids, MI (www.acrisure.com).

“I am very pleased with the partnership we developed with GCP and the confidence they demonstrated in our team over the course of their investment. Having initially built Acrisure with primarily individual and personal capital, GCP was our first institutional capital partner. We are grateful for GCP’s strategic guidance and hands-on involvement, which allowed us to grow our sales and operating infrastructure more rapidly and to position Acrisure today to enter its next phase of growth with its new investment partner,” said Mr. Williams.

“Greg Williams is a highly capable manager and leader who has built an exceptionally strong team and culture at Acrisure. There are a limited number of insurance brokerage platforms in the U.S. that have grown to a significant scale. Since our investment three years ago, we have worked closely with Acrisure’s management to achieve its growth plans and create a strong operating platform through complementary acquisitions, organic growth and development of key sales and management talent. Through these efforts, Acrisure has become a leading retail insurance platform in the Midwest, and we believe the company is capable of continuing to generate substantial future growth,” said Boris Gutin, a Managing Director at GCP Capital.

GCP Capital Partners manages three private equity funds that have invested $1.4 billion in 50 portfolio companies. The funds have made significant investments in the business services, education, energy, financial services, insurance and telecommunications industries. GCP generally makes controlling or influential minority investments of $10 million to $50 million in companies with enterprise values of $20 million to $250 million. GCP Capital Partners was formed as the successor to Greenhill Capital Partners, the merchant banking business of Greenhill & Co., Inc. (NYSE: GHL), which was founded in 2000. With the support of Greenhill & Co., the founders and senior investment professionals of Greenhill Capital Partners founded GCP Capital in December 2009 to manage the existing Greenhill Capital Partners funds and to raise successor funds. The firm is headquartered in New York (www.greenhillcapitalpartners.com).

“Our investment strategy is to partner with strong management teams in industries having long-term growth prospects and a high degree of fragmentation. GCP has completed seven investments in the insurance industry. We evaluated a large number of insurance brokerage platforms before choosing to back Greg and his team at Acrisure. We are delighted to have provided support to management over the last several years as Acrisure significantly grew its earnings and to have completed a successful realization for our investors,” said Robert Niehaus, Chairman of GCP Capital.

© 2013 PEPD • Private Equity’s Leading News Magazine • 3-6-13