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Archives for May 2, 2013

H.I.G. Capital Acquires Caraustar Industries

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H.I.G. Capital has acquired Caraustar Industries, a provider of recycled paperboard and related products, from Wayzata Investment Partners.

“We are very excited about the Caraustar opportunity,” said Tenno Tsai, a Principal of H.I.G. “Caraustar is a market leader with a blue chip customer base, broad geographic footprint and an efficient, high quality manufacturing base. We believe there are numerous market opportunities going forward and we look forward to supporting CEO Mike Patton and his team in achieving continued growth.”

Financing for this transaction was provided by Credit Suisse Securities, Goldman Sachs Bank USA, Jefferies, and Wells Fargo Capital Finance.

Caraustar is one of North America’s largest integrated manufacturers and converters of 100% recycled paperboard and converted paperboard products. Caraustar serves end-use markets in tube and core, folding carton, gypsum facing paper and specialty paperboard products. The company was founded in 1938 and is based in Austell, GA (www.caraustar.com).

In 2009, Wayzata led a group of bondholders in a pre-packaged chapter 11 process in which Wayzata acquired a majority ownership stake in Caraustar. The Wayzata led restructuring reduced Caraustar’s debt burden and improved Caraustar’s balance sheet. Since exiting bankruptcy, Caraustar has used its stronger balance sheet to drive operational improvement and to increase profitability. Wayzata Investment Partners is a private equity firm that focuses on opportunities in undervalued debt, equity and assets. The firm has assets under management of over $7 billion and is based in Wayzata, MN (www.wayzatainvestmentpartners.com).

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. 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).

© 2013 PEPD • Private Equity’s Leading News Magazine • 5-2-13

Arsenal Acquires Pathway Polymers

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Dash Multi-Corp., a portfolio company of Arsenal Capital Partners and a provider of polyurethane systems, vinyl plastisols and recycled rubber products, has acquired Pathway Polymers, a supplier of polyurethane tire fill material and equipment, from Vita Group, a portfolio company of TPG Capital.

Pathway Polymers is a supplier of tire fill for flatproofing products used by mining, construction, rental and OEM customers. The company invented TyrFil, the world’s first polyurethane tire fill material intended to flatproof tires. Pathway Polymers was founded in 1971 and is headquartered in Alpharetta, GA with a manufacturing facility in Chattanooga, TN (www.pathwaypolymers.com).

Pathway Polymers is the second add-on acquisition for Dash Multi-Corp. which was acquired by Arsenal in December 2012. Earlier this week, Dash acquired Arnco, a supplier of polyurethane products used in tire flatproofing products. Arnco was the first add-on acquisition for Dash Multi-Corp. which was acquired by Arsenal in December 2012. According to Arsenal, Pathway Polymers is a highly complementary combination with the tire fill business of Arnco.

Dash Multi-Corp. is a manufacturer of formulated polyurethane, vinyl plastisol, specialty coatings as well as recycled rubber products. Dash is headquartered in St. Louis and has seven production facilities in the U.S. (www.dashmulticorp.com).

“The acquisition of Pathway Polymers fits with our growth strategy in expanding Dash’s global polyurethane capabilities. This acquisition builds on our focus to deliver the best product and service to our customers. We are delighted to partner with the management and employees of Pathway Polymers and support their customers and growth worldwide,” said Andy Harris, Chief Executive Officer of Dash.

Arsenal Capital Partners invests in middle-market specialty industrial and healthcare companies that have $50 million to $250 million in enterprise value. Industries of specific interest include: specialty & fine chemicals; segments of healthcare; transportation and logistics; power generation; aerospace & defense; and process industry components and services. Arsenal Capital Partners recently completed fundraising for Arsenal Capital Fund III with $875 million of committed capital, exceeding its target of $750 million. The firm’s previous fund, Arsenal Capital Partners II, was raised in 2006 with $500 million of committed capital. Arsenal now has over $1.6 billion of committed capital under management. The firm was founded in 2000 and has offices in New York and Shanghai (www.arsenalcapital.com).

“The combination of Dash and Pathway builds on our strategy to create a leading polyurethane business offering a broad portfolio of products and technologies that serve multiple end markets,” said Tim Zappala, a Partner at Arsenal Capital Partners and co-head of the firm’s Specialty Industrials Group.

The seller of Pathway Polymers, Vita Group, is a portfolio company of TPG Capital. Vita is a provider of materials used in industrial applications including transportation, construction, furniture & bedding and packaging. The company had revenues in 2012 of approximately €950 million. Vita has 59 facilities operating in 20 countries and is based in London, UK (www.thevitagroup.com). TPG Capital acquired Vita in 2005.

© 2013 PEPD • Private Equity’s Leading News Magazine • 5-2-13

DW Healthcare Partners Invests in Med-Pharmex

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DW Healthcare Partners has made an investment in Med-Pharmex, a provider of animal health products.

Med-Pharmex offers pharmaceutical research, formulation, and manufacturing in the animal health industry. Med-Pharmex’s veterinary pharmaceuticals include products for companion animals, such as dogs, cats, and horses, and food-producing animals, such as cattle, swine and poultry. The company operates three manufacturing facilities and is headquartered in Pomona, CA (www.med-pharmex.com).

“We are very pleased to have this opportunity to partner with Gerald Macedo and his talented team at Med-Pharmex. The company is uniquely positioned within the animal health market. It will provide us with a stable platform that can be further leveraged as new products are added to the portfolio, via internal research and development, product acquisitions, and strategic manufacturing partnerships,” said Andrew Carragher, Co-founder and Managing Director of DW Healthcare Partners.

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 has $265 million of committed capital. The firm is based in Park City, UT (www.dwhp.com).

“Our partnership with DW Healthcare Partners will allow us to take advantage of some exciting growth opportunities,” said Gerald Macedo, CEO of Med-Pharmex. “The financial stability and flexibility now available to us through this investment in our company will enable us to move forward with our acquisition and product development plans.”

© 2013 PEPD • Private Equity’s Leading News Magazine • 5-2-13

Brynwood Acquires Bit-O-Honey

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Pearson Candy Company, a portfolio company of Brynwood Partners, has acquired the Bit-O-Honey confectionery brand from Nestle USA. This acquisition marks the fifth brand that Brynwood Partners has acquired from Nestle. Brynwood acquired Pearson Candy in August 2011.

Bit-O-Honey is a national brand with a 90-year history with U.S. consumers. Bit-O-Honey is available in a variety of formats and is widely distributed in the U.S. through retailers in the food, drug, mass and dollar channels. Bit-O-Honey was acquired by Nestle USA in 1984.

“We are excited to announce the acquisition of the Bit-O-Honey brand,” said Michael Keller, President and CEO of Pearson’s. “We plan to bring renewed focus to the Bit-O-Honey brand by increasing its availability to consumers and by offering customers new and innovative Bit-O-Honey products.”
Pearson Candy Company is a manufacturer and marketer of Pearson’s Salted Nut Roll, Pearson’s Mint Patties, Pearson’s Nut Goodies, and Pearson’s Bun confectionery brands. The company is based in St. Paul (www.pearsonscandy.com).

“The acquisition of Bit-O-Honey will complement our strong Pearson’s business. While management continues to focus on product innovation and expanding the company’s geographic reach, the Bit-O-Honey brand has strong national awareness. We feel this acquisition will be a conduit to expand the reach of all of Pearson’s brands throughout the U.S.,” said Henk Hartong III, Senior Managing Partner of Brynwood and Chairman of Pearson’s.

Brynwood Partners has developed a niche in the corporate carve out sector. In its 29-year history, the firm has acquired 37 corporate brands from 14 different corporate sellers, including the Bit-O-Honey acquisition. Since January 2011, the firm has completed the acquisition of 23 corporate brands in 10 separate transactions.

Brynwood Partners is an operationally-focused private equity firm that makes control investments in lower middle market companies. Sectors of interest include consumer products, light manufacturing with low capital intensity, and business services. Brynwood Partners has $500 million of capital under management. The firm was founded in 1984 and is based in Greenwich, CT (www.brynwoodpartners.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 5-2-13

Shamrock Capital Advisors Invests in Giant Creative

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Shamrock Capital Advisors has made an investment in Giant Creative, a healthcare communications agency.

Giant Creative is a healthcare communications agency specializing in positioning and branding, and strategic and creative development for pharmaceutical, biotech, consumer health, medical device, and diagnostics companies. The company was founded in 2002 and has over 130 employees. Giant Creative is based in San Francisco (www.giantsf.com).

“We feel very fortunate to have a company like Giant in the Shamrock family,” said Will Wynperle, Partner with Shamrock. “Our approach has always been to work with companies with untapped intrinsic value, and those capitalizing on emerging trends. There’s no question that Giant’s position at the epicenter of healthcare, technology, and communications, makes them a great partner for us.”

Shamrock Capital Advisors has over $700 million of capital under management and invests in the media, entertainment, and communications sectors. Originally founded in 1978 as the Roy E. Disney family investment company, Shamrock is currently investing out of Shamrock Capital Growth Fund III, a $400 million fund raised in 2011. The firm is based in Los Angeles (www.shamrockcap.com).

AdMedia Partners, a New York based investment bank (www.admediapartners.com), served as the exclusive financial advisor to Giant.

© 2013 PEPD • Private Equity’s Leading News Magazine • 5-2-13

High Road Capital Partners Acquires Tricore

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Dowden Medical Communications Group, a portfolio company of High Road Capital Partners, has acquired Tricore, a provider of learning products for the pharmaceutical and life sciences sectors. Tricore’s owners, Bruce Haghighat and Omar Shoheiber, made a significant investment in the transaction along side High Road.

Tricore is a provider of educational, marketing, and training products used by pharmaceutical and life science companies. The company was founded in 1994 and is based in Princeton, NJ (www.tricoreinc.com).

“Pharmaceutical companies are increasingly relying on third-party firms for their professional development needs. Tricore’s expertise in creating learning modules in the areas of sales training, marketing and compliance complements Dowden Medical’s content and marketing services that help pharmaceutical companies educate physicians about their products,” said Bruce Guzowski, Chief Executive Officer of Dowden Medical. “We can now offer fully integrated and complementary solutions to broaden and deepen our client relationships across the combined company.”

The acquisition of Tricore is the second add-on acquisition for Dowden Medical. In November 2012, the company acquired QD Healthcare Group, a provider of scientific content development, promotional medical education and marketing services to the pharmaceutical and biotechnology industries.

Dowden Medical provides scientific content development, promotional medical education and related marketing services to the pharmaceutical and biotechnology industries. The company has four operating subsidiaries: Medical Decision Point (www.medicaldecisionpoint.com); Convergent Health Solutions (www.convergent-health.com); eCrossings Media (www.ecrossingsmedia.com); and QD Healthcare (www.qdhealthcare.com). Dowden Medical is headquartered in Montvale, NJ (www.dowdenhealth.com).

“Life sciences companies have increasingly complex therapies in their pipelines, and must navigate complicated and changing regulatory and payer environments. The need for trustworthy, high-quality employee and physician education has never been greater. Dowden Medical and Tricore are well positioned for growth, with cutting-edge, interactive multimedia training modules and medical communications services for pharmaceutical, biotechnology and medical device companies,” said Jeff Goodrich, a High Road Partner.

High Road Capital Partners invests in manufacturing, service, or value-added distribution businesses with revenues of $10 million to $100 million and EBITDAs of $3 million to $10 million. High Road was formed in 2007 and currently manages over $150 million of committed capital. High Road has completed 18 transactions – eight platform investments and eleven add-on acquisitions – for its debut fund, High Road Capital Partners Fund I, LP. The firm is based in New York, NY (www.highroadcap.com).

Working on this transaction from High Road were Partners Jeff Goodrich and Jerry Anderson, Principal Ben Schnakenberg, and Senior Associate Paul Langley.

Financing for this transaction was provided by Fifth Third Bank. Capstone Partners was the financial advisor to advised Tricore.

© 2013 PEPD • Private Equity’s Leading News Magazine • 5-2-13

Sun Capital Combines Packaging Portfolio Companies

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Sun Capital Partners will combine five of its portfolio companies under a new platform holding company called Exopack Holdings. The combined business will have 63 plants, 8,650 employees and total revenues of more than $2.5 billion, making it the sixth-largest plastics packaging company in the world.

“This combination represents a natural next step in a process that began eight years ago to create a global packaging company with a solid foundation for future growth,” said Marc Leder, co-CEO of Sun Capital Partners. “Building on past collaborations between the companies, the combination will immediately achieve synergies and allow the Exopack Holdings to more effectively pursue global business.”

The five companies now under the Exopack Holdings umbrella are as follows:

  1. Exopack is a producer of flexible paper and plastic packaging, and advanced coatings. The company was acquired by Sun in July 2005 and is based in Spartanburg, SC (www.exopack.com).
  2. Britton Group is a flexible plastic packaging manufacturer. The company was acquired by Sun in April 2011 and is based in Winsford, UK (www.brittongroup.com).
  3. PACCOR is a provider of rigid plastic packaging products. The company was acquired by Sun in December 2010 and is based in Zell, Germany (www.paccor.com).
  4. Kobusch is a producer of flexible and rigid packaging systems. The company was acquired by Sun in December 2011 and is based in Warburg, Germany (www.kobusch.com).
  5. Paragon Print & Packaging is a provider of private label packaging products. The company was acquired by Sun in December 2012 and is based in Lincolnshire, UK (www.paragonprintandpackaging.com).

Exopack Holdings will be led by Jack Knott, who will serve as the company’s Chief Executive Officer, and Mike Alger who will serve as Chief Financial Officer.

“By joining together to form this new entity, we will be better able to serve the needs of our global customers through a manufacturing base spanning North America, Europe, the Middle East and China that enhances our ability to deliver outstanding service,” said Mr. Knott. “The larger scale will enable us to accelerate the development and commercialization of new and differentiated products that offer our customers a competitive advantage.”

Sun Capital Partners is a private investment firm focused on leveraged buyouts, equity, debt, and other investments in companies that can benefit from its in-house operating professionals and experience. Sun Capital has invested in and managed more than 315 companies worldwide with combined sales in excess of $45 billion since the firm’s inception in 1995. The firm has offices in Boca Raton, Los Angeles, and New York as well as affiliates with offices in London, Paris, Frankfurt, Luxembourg, Shanghai and Shenzhen (www.SunCapPart.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 5-2-13

Capital Royalty Closes Fund 2 at $805 Million

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Capital Royalty has held the final closing of its second fund, Capital Royalty Partners II L.P., with $805 million in equity commitments. The fund was oversubscribed and exceeded its initial fund raising target.

“The high level of investor demand for this fund reflects Capital Royalty’s consistent performance and differentiated investment strategy. Our unique strategy provides our funds with the most attractive risk-adjusted returns and current cash yields, while maintaining considerable downside protection and minimal correlation to other asset classes. Capital Royalty remains well positioned to meet the growing demand for alternative financing structures in the healthcare industry,” said Charles Tate, Chairman and Founder of Capital Royalty.

Total investable capital for the new fund is expected to exceed $1 billion including available debt financing facilities. The limited partners of the new fund include pension funds, endowments, institutional investors, funds of funds, family offices, and sovereign wealth funds.

Capital Royalty provides from$20 million to $200 million in non-dilutive growth financings to healthcare companies, research institutions, and inventors to support product commercialization, pipeline development and other growth opportunities. The firm focuses on credit-oriented investments in approved and commercialized healthcare products and technologies. Capital Royalty’s investments take the form of secured debt, royalty bonds, revenue interests, and traditional royalty monetizations. The firm was founded in 2003 and is headquartered in Houston with additional offices in Boulder, CO and New York (www.capitalroyalty.com).

“The fund is off to an excellent start, having already made several investments that are producing cash distributions for our limited partners. We have developed a robust pipeline of new financing opportunities and will continue our focus on working collaboratively with healthcare companies, research institutions, and inventors to develop non-dilutive structured financing solutions that support growth opportunities and deliver returns to our limited partners,” said Nathan Hukill, Managing Director of Capital Royalty.

© 2013 PEPD • Private Equity’s Leading News Magazine • 5-2-13

CIT Refinances Harvest Partners’ Portfolio Company

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CIT Group has provided a $96 million senior secured credit facility to Harvest Partners to support its refinancing of TruckPro, a distributor of aftermarket parts and accessories for heavy duty vehicles. Harvest Partners acquired TruckPro in November 2011.

“CIT played an integral role in our efforts to streamline TruckPro’s capital structure. CIT’s deep industry knowledge and their flexible and competitive financing structures, coupled with our long-standing relationship made them the perfect partner for this transaction,” said Chris Whalen, Managing Director at Harvest Partners.

TruckPro is a distributor of heavy duty truck & trailer products. Through a network of 65 locations in 17 states, TruckPro distributes a range of products in the areas of brake systems, engines, electrical, drivetrain, and suspension to its customer in the commercial and government sectors. The company was founded in 1952 and is based in Memphis (www.truckpro.com).

“We’re pleased to put our industry expertise to work for Harvest Partners,” said Jay Baldinelli, Managing Director, CIT Sponsor Finance. “This transaction demonstrates our ability to provide innovative, cost effective debt solutions and further supports our clients’ growth objectives.”

CIT Corporate Finance provides lending, leasing and other financial and advisory services to the small business and middle market sectors with a focus on specific industries, including: chemicals, commercial real estate, communications, energy, entertainment, gaming, healthcare, industrials, information services & technology, restaurants, retail, and sports & media (www.cit.com/corporatefinance). The corporate finance group is part of CIT, a bank holding company with more than $35 billion in assets. CIT was founded in 1908 and is based in New York (www.cit.com).

Harvest Partners invests in management buyouts and growth financings. Sectors of interest include business and industrial services, manufacturing and distribution, healthcare, midstream energy, and consumer products and retail. The firm was founded in 1981 and is based in New York (www.harvpart.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 5-2-13

Harris Williams Promotes Nine Senior Professionals

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Harris Williams & Co. has promoted nine senior professionals from the firm’s London, Minneapolis, Richmond and San Francisco offices. The promotions include Brian Lucas to managing director; Ryan Budlong, Jeff Cleveland, Andy Dixon, Darwin Olympia and Brent Spiller to director; and Marshall Croft, Brad Morrison and Alex Murrill to vice president.

Mr. Lucas has been promoted to managing director in the firm’s Richmond office. He has advised manufacturing and service businesses in various segments of the energy and power industry, including oilfield products and services, industrial/infrastructure services and power equipment and services. Prior to focusing on energy and power, Mr. Lucas worked in numerous industries, including industrial manufacturing, business services and consumer.

Mr. Budlong has been promoted to director in the firm’s Minneapolis office. He has advised companies providing products and services to a variety of segments within the consumer industry including branded and enthusiast consumer products, food and beverage, restaurant and retail, and consumer services. In addition, Mr. Budlong has experience in industrial manufacturing, outsourced business services, energy services and technology industries.

Mr. Cleveland has been promoted to director in the firm’s Minneapolis office. He has advised clients across a variety of consumer segments, including food and beverage, restaurant and retail, consumer products and consumer services. In addition, Mr. Cleveland has experience in the technology, distribution, business services, building products and financial services industries.

Mr. Dixon has been promoted to director in the firm’s San Francisco office. He has worked on transactions across a variety of healthcare segments, including alternate site care, outsourced clinical services and physician practice management, health and wellness, medical and life science devices and products, payor and provider services, and healthcare information technology.

Mr. Olympia has been promoted to director in the firm’s Richmond office. He has advised a diverse group of clients across a wide range of industrial segments, including specialty materials, chemicals, packaging and advanced manufacturing, among others. In addition, Mr. Olympia has experience in the aerospace and defense, business services, financial services, healthcare, technology and transportation industries.

Mr. Spiller has been promoted to director in the firm’s Richmond office. He spent nearly two years as a founding member of Harris Williams & Co.’s London office and is actively involved with the firm’s international efforts. Mr. Spiller has worked on merger and acquisition transactions across a range of industries including consumer products, consumer services, distribution, business services and industrial manufacturing, among others.

Mr. Croft has been promoted to vice president in the firm’s Richmond office. He has worked on merger and acquisition, strategic advisory and corporate financing assignments across numerous industries including business services, specialty distribution, environmental and industrial services and healthcare, among others.

Mr. Morrison has been promoted to vice president in the firm’s Richmond office. He has advised on a variety of assignments across several industries, including energy and power, chemicals, building products, manufacturing and specialty distribution, among others.

Mr. Murrill has been promoted to vice president in the firm’s London office. He has advised clients across the advanced manufacturing, industrials, oil and gas, technology and consumer and retail sectors.

Harris Williams & Co. provides sell-side and acquisition advisory, restructuring advisory, board advisory, private placements and capital markets advisory services. The firm is part of the PNC Financial Services Group (NYSE:PNC). Harris Williams & Co. is headquartered in Richmond, VA (www.harriswilliams.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 5-2-13

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