Archives for March 11, 2013

Arsenal Capital Partners Acquires TP Electrical

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Source Refrigeration & HVAC, a portfolio company of Arsenal Capital Partners, has acquired TP Electrical, a provider of electrical contracting services. The acquisition of TP Electrical builds on the Source’s platform as a provider of commercial refrigeration and HVAC services serving supermarket chains, convenience store chains, and telecom and industrial companies.

TP Electrical is a provider of electrical and energy management system (EMS) contracting services to grocery, commercial, industrial, and retail clients across the Southeastern United States. TP holds electrical licenses in Alabama, Georgia, Florida and North Carolina and is certified in all major brands of grocery-related EMS controllers. The company is based in White, GA (no website found).

“TP is well established in the southeastern US market for refrigeration and HVAC electrical and EMS services and has provided a long history of quality solutions and service to grocery, commercial, industrial, and retail clients,” said Sal Gagliardo, an Operating Partner at Arsenal Capital. “The acquisition of TP strengthens the capabilities of our existing service and installation operations in the southeast and supports our overall strategy of continuing to expand our national footprint while we build an industry-leading independent refrigeration and HVAC company”.

“We are excited to add TP’s capabilities and strong customer relationships to our growing southeast team, and we welcome TP’s employees and customers to the Source family,” said Bruce Buchholz, Chief Executive Officer of Source. “Expansion in the southeastern United States continues to be an important strategic focus for us. The TP acquisition allows us to offer our existing southeast customers expanded service and construction-related electrical and EMS capabilities. It also allows us to provide a broader offering for installation jobs with existing and new customers throughout the entire southeast. TP’s expertise coupled with Source’s existing service and installation operations in Florida.

Source Refrigeration & HVAC was acquired by Arsenal in 2006 and is a provider of commercial refrigeration and HVAC services serving the nation’s top supermarket chains, many of the largest convenience store chains and leading telecom and industrial companies. The company has approximately 1000 employees and is based in Anaheim, CA (www.sourcerefrigeration.com).

Arsenal Capital Partners makes investments in middle-market specialty industrial, healthcare and financial services companies with $50 million to $400 million in enterprise value. The firm invests in niche industry sectors where it has prior experience and where its operating resources can help facilitate incremental growth and margin improvement. Industries of specific interest include: specialty & fine chemicals; segments of healthcare; transportation and logistics; power generation; aerospace & defense; process industry components and services; and financial services. Arsenal currently has $800 million of committed equity capital and is based in New York (www.arsenalcapital.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 3-11-13

KKR Acquires Gardner Denver

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KKR will acquire industrial equipment maker Gardner Denver for $76 per share or $3.7 billion. Gardner Denver had revenues in 2012 of approximately $2.4 billion. The transaction is expected to close in the third quarter and is valued at $3.9 billion including the assumption of Gardner Denver’s debt.

Fully committed debt financing will be provided by UBS Securities, Barclays, Citigroup, Deutsche Bank Securities, RBC Capital Markets, Mizuho Corporate Bank, and KKR Capital Markets, an affiliate of KKR, in the form of senior secured credit facilities. Deutsche Bank Securities, Citigroup, Barclays, UBS Securities, RBC Capital Markets, Mizuho Corporate Bank, and KKR Capital Markets also arranged debt financing in the form of a senior unsecured bridge facility.

Gardner Denver designs, manufactures, and markets engineered industrial machinery and related parts and services. The company operates in two segments: (i) the Industrial Products Group offers rotary screw, reciprocating, and sliding vane air and gas compressors; positive displacement, centrifugal, and side channel blowers; and vacuum pumps for use in manufacturing, transportation and general industry, and original equipment manufacturer (OEM) and engineered system applications; (ii) the Engineered Products Group designs, manufactures, markets, and services pumps, compressors, liquid-ring vacuum pumps, reciprocating pumps, diaphragm vacuum pumps, water jetting systems, and related aftermarket parts used in oil and natural gas well-drilling, servicing, and production, as well as in medical and laboratory, and industrial cleaning and maintenance. Gardner Denver is based in Wayne, PA (www.gardnerdenver.com).

“Gardner Denver is an outstanding business with a rich heritage of manufacturing excellence, innovation and quality that spans well over 100 years. The company has an impressive group of talented and dedicated employees, and we look forward to working closely with them to drive future growth and value. The long-term future of Gardner Denver is bright,” said Pete Stavros, head of the KKR’s industrials investment team.

Goldman, Sachs & Co. is serving as financial advisor to Gardner Denver and Skadden, Arps, Slate, Meagher & Flom is serving as legal advisor. UBS Securities and Simmons & Company International are serving as financial advisors to KKR and Simpson Thacher & Bartlett is serving as legal advisor.

KKR makes private equity, fixed income and other investments in companies in North America, Europe, Asia and the Middle East. The firm has $66 billion in assets under management. In addition to its New York headquarters the firm has offices in Menlo Park, San Francisco, Houston, Washington DC, London, Paris, Hong Kong, Tokyo, Beijing, Mumbai, Dubai and Sydney (www.kkr.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 3-11-13

Thomas H. Lee Acquires iParty

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iParty Corp., a party goods retailer with a strong presence in New England, has entered into an agreement to be acquired by Party City, a portfolio company of Thomas H. Lee Partners. The transaction is expected to close during the second quarter of 2013.

iParty Corp. is a party goods retailer that operates 54 iParty retail stores in New England and Florida and an internet site for costume and related goods and party planning. The company is based in Dedham, MA (www.iparty.com).

“We are excited to add iParty’s strong platform of retail stores to our vertically integrated business model,” said Gerald Rittenberg, Party City’s Chief Executive Officer. “By joining forces, we enhance our leadership position and accelerate our growth throughout New England, a densely populated region where we currently do not have a market presence. We have maintained a relationship with iParty for many years and have long admired their strong management team and well-recognized brand. We look forward to working together to expand our combined geographic footprint and brand presence on a national scale.”

Party City designs, manufactures, contracts for manufacture and distributes party goods, including paper and plastic tableware, metallic balloons, accessories, novelties, gifts, stationery and Halloween costumes, and is North America’s No. 1 party retailer with more than 750 company-owned and franchise locations throughout the United States, Canada and Puerto Rico. The company is headquartered in Rockaway, NJ (www.partycity.com). Thomas H. Lee Partners acquired a majority stake in Party City in June 2012.

“Party City is a leading player in our industry and we could not be more pleased with this outcome of the strategic review we initiated last year and the return it affords to all of our stockholders, both Common and Preferred,” said Sal Perisano, iParty’s Chairman and Chief Executive Officer. “The Party City network with their Amscan distribution platform will benefit our stores and products by significantly increasing our scale and broadening our geographic presence. We look forward to working with Party City and its management team as we integrate our companies.”

Thomas H. Lee Partners, founded in 1974, is one of the oldest private equity investment firms in the United States. Industries of interest include business and information services; consumer products and retail; financial services; health care; industrial; and media & communications. Since its founding, Thomas H. Lee Partners has raised approximately $20 billion of equity capital and invested in more than 100 businesses with an aggregate purchase price of more than $150 billion. The firm is based in Boston (www.thl.com).

Raymond James & Associates acted as financial advisor to iParty on this transaction.

© 2013 PEPD • Private Equity’s Leading News Magazine • 3-11-13

Linsalata Capital Partners Announces Promotions

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Linsalata Capital Partners has promoted Michael Faremouth to Managing Director and Murad Beg to Principal.

Mr. Faremouth joined the firm in 2005 and serves as Chairman of Stag Parkway Holding Company and is a director of Harden Manufacturing, Hospitality Mints Holding Company, and Transpac Holding Company. Prior to joining Linsalata Capital Partners, he spent two years at the Matco Tools subsidiary of Danaher Corporation. Mr. Faremouth began his professional career at Ernst & Young where he spent six years in Audit then the Litigation Advisory Services practice working with manufacturing and distribution companies rising to the level of Manager. He has a Bachelor of Business Administration degree in Accounting from the University of Michigan and an MBA from the Darden School of Business at the University of Virginia.

Mr. Beg joined Linsalata Capital Partners in 2008 and his primary responsibilities include acquisition searches, due diligence, negotiations and portfolio company oversight. He serves as a director of Whitcraft Holdings and is a member of the Eatem Foods Company’s oversight team. Mr. Beg’s prior experience includes 13 years of practicing law, ultimately co-heading the M&A practice as a partner with Calfee, Halter & Griswold in Cleveland counseling privately-held, public company and private equity clients with a primary focus on mergers, acquisitions, divestitures, capital raising and other transaction activities. Prior to joining Calfee, Mr. Beg was associated with the law firm of Cummings & Lockwood. Mr. Beg received a Bachelor of Arts in Political Science from Kenyon College, and he earned a JD from The Pace University School of Law.

Linsalata Capital Partners invests from $10 million to $50 million of equity in middle market companies in an array of industries that have $7 million to $50 million of EBITDA and at least $300 million in enterprise value. The firm is currently investing from its seventh fund, Linsalata Capital Partners Fund VI, L.P., with $427 million in committed equity capital. Linsalata Capital Partners was founded in 1984 and is based in Mayfield Heights, OH (www.linsalatacapital.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 3-11-13

Adam Holt to Join Qatalyst Group as Partner

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Qatalyst Group, a technology-focused independent investment bank, has added Adam Holt to the firm as a Partner. Mr. Holt, most recently a Managing Director and Head of Global Software Research at Morgan Stanley, will be based at Qatalyst’s San Francisco headquarters and will advise technology companies and private investment firms on mergers & acquisitions and strategic investments in the software sector globally.

“We expect substantial growth in both new company formation and strategic activity in the software sector in the years ahead, and believe Adam will add significant new dimensions to our ability to provide differentiated, high impact advice to established and emerging leaders,” said Frank Quattrone, Chief Executive Officer of Qatalyst Group. “As the perennial #1 ranked software analyst, Adam brings world class domain expertise and immense credibility with his vast network of contacts among the senior management teams, board members and investors in the sector. We are delighted to welcome him to Qatalyst.”

Mr. Holt, 39, has 16 years of experience covering the technology industry at Morgan Stanley and JP Morgan. He was ranked as the #1 software analyst on the Institutional Investor All-American Team in 2010, 2011 and 2012, and ranked #1 for five years in the Greenwich Institutional poll. Mr. Holt has covered a wide range of software sectors including applications, cloud computing, data technologies, infrastructure, security, storage, and systems management, and had previously covered e-commerce, internet and services companies. Mr. Holt has participated in more than 50 IPOs and other equity offerings for companies including Advent, Bazaarvoice, Jive Software, Palo Alto Networks, Qliktech, Responsys, ServiceNow, ServiceSource, SolarWinds, Splunk, SuccessFactors, Taleo, VMware and Workday.

Qatalyst Group is a technology-focused independent investment bank. Qatalyst Partners, its advisory business, provides strategic and financial advice to senior management and boards of established and emerging technology companies. Qatalyst is headquartered in San Francisco (www.qatalyst.com).

Since its founding in March 2008, Qatalyst has advised on more than 40 M&A assignments with total transaction volume of approximately $70 billion, including advising Motorola Mobility on its $12.5 billion sale to Google; Autonomy on its $11.7 billion sale to Hewlett-Packard; National Semiconductor on its $6.5 billion sale to Texas Instruments; NetLogic on its $3.9 billion sale to Broadcom; Atheros on its $3.6 billion sale to Qualcomm; Isilon on its $2.6 billion sale to EMC; 3PAR on its $2.4 billion sale to Hewlett-Packard; Data Domain on its $2.4 billion sale to EMC; Taleo on its $2.1 billion sale to Oracle; Acme Packet on its $2.1 billion pending sale to Oracle; Netezza on its $1.9 billion sale to IBM; Ancestry on its $1.6 billion sale to Permira; Alcatel-Lucent in the $1.5 billion sale of its Genesys business to an investment group including Permira and Technology Crossover Ventures; Nicira on its $1.26 billion sale to VMware; and Yammer on its $1.2 billion sale to Microsoft.

© 2013 PEPD • Private Equity’s Leading News Magazine • 3-11-13