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Archives for May 3, 2013

SK Capital Acquires Antioxidant and UV Stabilizer Business of Chemtura

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SK Capital Partners has closed the acquisition of the antioxidant and UV stabilizer solutions business of Chemtura Corporation. The acquisition was made by Addivant, a new company formed by SK Capital.

Addivant represents the fourth investment from SK Capital Partners III L.P., a $500 million fund raised in 2011, and the fourth corporate carve out among its current portfolio of six companies.

“Having negotiated the transaction directly with Chemtura, Addivant is another example of a corporate carve out we’ve acquired outside of a broad auction. Similar to our other investments, we believe the business can benefit significantly from SK Capital’s industry-specific knowledge and operational experience,” said Jack Norris, a Managing Director of SK Capital.

Addivant is a supplier of a portfolio of additives including antioxidants, antiozonants, inhibitors, polymer modifiers and UV stabilizers used by customers to improve the production and performance properties of polymers, plastics and rubbers. Addivant operates 11 facilities on five continents. The company is headquartered in Middlebury, CT (www.addivant.com).

Peter Smith, a former member of Chemtura’s management team and general manager of the antioxidant and UV stabilizer business unit since 2009, has been named company president and chief executive officer.

“With its unique pedigree resulting from the merger of three leading polymer additives companies, we believe Addivant is an attractive platform with significant growth and performance improvement potential,” said Barry Siadat, a Managing Director of SK Capital. “The transition from a non-core business within a public company to a stand-alone organization will enable improved execution and a renewed emphasis on growth. Management has done an excellent job of redefining the business’ strategy and successfully repositioning it as a strategic partner and solutions provider to customers.”

SK Capital invests equity of $25 million to $100 million in companies operating in the specialty materials, chemicals and healthcare sectors. The firm has offices in New York and Boca Raton (www.skcapitalpartners.com).

Chemtura is a manufacturer and marketer of specialty chemicals, agrochemicals and pool, spa and home care products. Major industries served include transportation, energy, electronics and agriculture. The company had sales in 2011 of $3 billion. Chemtura is headquartered in Philadelphia (www.chemtura.com).

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

Mainsail Partners Invests in Netchemia

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Mainsail Partners has made a $6.5 million investment in Netchemia, a provider of cloud-based talent management software for K-12 school districts and institutions. The majority of the $6.5 million investment will be used to accelerate Netchemia’s growth and expand the company’s product offering.

“We are excited to announce a partnership with Mainsail and the next phase of our company’s growth,” said Netchemia co-founder and CEO Carlos Antequera. “This investment will allow Netchemia to accelerate its product development and team-building plans. It was important for us to find an investor who shared our vision and had extensive company-building experience.”

Netchemia is a provider of cloud-based talent management software specifically developed for K-12 educational organizations. The company’s products are used to recruit, hire, develop and retain teachers and school leaders. More than 1,100 K-12 school districts and institutions in 42 states—ranging in size from fewer than 100 students to those with tens of thousands of students—use Netchemia’s software-as-a-service platform. Netchemia was founded in 2001 and is based in Prairie Village, KS, a suburb of Kansas City (www.netchemia.com).

“Carlos and his team recognized the opportunity to leverage technology to improve the process of managing talent for school administrators,” said Stephen Wolfe, a Mainsail Partners principal. “We have a great deal of respect for entrepreneurs like Carlos who have proven they can grow their businesses rapidly and do so profitably. We look forward to working with the team to build the leading K-12 talent management platform.”

Mainsail Partners invests from $5 million to $15 million in companies that are located in the United States and Canada with revenue of $4 million to $50 million and EBITDA of $1 million to $8 million. The firm was founded by Gavin Turner and Jason Payne in 2003 and is based in San Francisco (www.mainsailpartners.com).

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

Diamond Castle Exits Managed Health Care Associates

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Diamond Castle has sold its portfolio company Managed Health Care Associates, a health care services and technology company, to Roper Industries.

Managed Health Care Associates (MHA) provides health care services to alternate site health care (non-hospital) providers. Services include group purchasing, managed care and payer contracting, reimbursement management, specialty pharmacy, pharmaceutical data analytics, and clinical pharmacy software. MHA is the largest group purchasing organization (GPO) in the non-hospital market, 3rd largest pharmaceutical GPO across all segments, and 6th largest GPO in the U.S. facilitating over $5 billion of annual purchases. The company is based in Florham Park, NJ (www.mhainc.com).

“This is an exciting day for MHA,” said MHA’s President Mike Sicilian. “Having been owned by different private equity companies since the late 1990’s, MHA now has a permanent home within the Roper family of companies. We are confident that being part of Roper will help us continue to expand the scope of services we provide for our members and continue to grow our business. I am looking forward to working with Roper and the rest of the MHA senior leadership team to continue our mission of being the leading service and technology company to alternate site health care providers and to assisting our members manage their businesses as they provide critical services to their patients.”

Roper Industries designs, manufactures and distributes radio frequency products, services and application software, industrial technology products, energy systems and controls and medical and scientific imaging products and software. The company is based in Sarasota, FL (www.roperind.com).

Diamond Castle invests from $50 million to $200 million in companies operating in the energy & power, financial services and healthcare sectors. The firm was founded in 2004 and has $1.8 billion of capital under management. Diamond Castle is headquartered in New York (www.dchold.com).

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

Gridiron Capital Invests in Tokyo Joe’s

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Gridiron Capital has made an investment in Tokyo, Inc. (“Tokyo Joe’s”), a fast casual Asian restaurant chain.

“We are very excited to be partnering with Larry Leith, Greg MacDonald and the rest of the Tokyo Joe’s management team to acquire the business. Their passion, energy and commitment to providing great food and a great dining experience will be the foundation of the business’ growth potential,” said Thomas Burger Jr., Managing Partner of Gridiron Capital.

Tokyo Joe’s is a fast casual modern Asian restaurant chain that serves fresh made-to-order rice and noodle bowls, sushi and salads. The company currently operates 25 locations in the greater Denver metro area. Tokyo Joe’s was founded in 1996 and is based in Denver (www.tokyojoes.com).

“Tokyo Joe’s ability to provide customers with unrivaled fresh and healthy ingredients, coupled with the in store dining experience, makes it a unique and highly scalable platform,” said Greg MacDonald, Chief Executive Officer of Tokyo Joe’s. “With Gridiron’s support and the strength of the core brand, we believe Tokyo Joe’s is positioned for continued growth.”

Gridiron Capital invests in middle-market manufacturing, service and specialty consumer companies in the United States and Canada. The firm is based in New Canaan, CT (www.gridironcapital.com).

“Gridiron’s partnership with Tokyo Joe’s will enable the company to accelerate growth and to expand into new geographies,” said Kevin Jackson, Managing Director of Gridiron Capital. “Larry Leith and his team have built a tremendous concept over 17 years, and we are excited to partner with them to build on their legacy of success.”

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

NewSpring Capital Closes Fund 3 above Target

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NewSpring Capital has closed its third growth equity fund, NewSpring Growth Capital III, L.P. (NSG III), at its hard cap of $250 million and above the target of $200 million. NewSpring’s earlier funds were NewSpring Growth Capital, L.P., a $136 million growth equity fund and NewSpring Growth Capital II, L.P., a $163 million growth equity fund.

“We are extremely pleased with the continued support we receive from our existing investor base and are excited to have attracted a well-diversified group of new highly regarded institutional investors,” said Michael DiPiano, co-founder and Managing General Partner of NewSpring Capital.

Similar to its predecessor funds, NSG III will invest from $5 million to $25 million in growth stage businesses with revenues of $5 million to $50 million. Sectors of interest include business services, enabling technologies, and information technology.

“Since our founding, we have strived to position NewSpring Capital as the preferred partner of the top management teams in the Mid-Atlantic region. We are truly excited about the opportunities that lie ahead for NSG III and its investors,” said Marc Lederman, co-founder of NewSpring.

NSG III completed its first portfolio company investment in the fourth quarter of 2012 with an $8.2 million investment in eXelate, a provider of offline and online data sets used by digital advertisers to improve customer targeting. The company is headquartered in New York (www.exelate.com).

“Through our operational backgrounds, we strive to deliver value added insights and guidance while maintaining a consistent, long term view of each investment,” added Glenn Rieger, General Partner of NSG III. “We are looking forward to building out NSG III’s portfolio and rewarding the faith our LPs placed in us by providing them with strong returns.”
NewSpring Capital has offices in Radnor, PA; Short Hills, NJ; Baltimore, MD and Washington, DC (www.newspringcapital.com).

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

Solis Capital Partners Closes Second Fund

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Solis Capital Partners has held a closing of its second fund, Solis II, L.P., with $61 million in capital commitments.

“Solis’ consistent top quartile performance and fundamentals-based approach were essential for our fundraise success,” said Craig Dupper, Partner at Solis. “In Solis II, we will continue our proven method of generating superior returns through growth and improvement of lower middle-market businesses.”

Solis completed the first investment for its second fund in March of last year, acquiring an interest in gen-E, an information technology process automation software and services company based in San Clemente, CA (www.gen-e.com).

Solis Capital Partners invests from $2 million to $25 million in companies with revenues between $15 million and $150 million that operate in the business services, niche manufacturing, and software sectors. Target companies are typically headquartered in the Western United States. The firm has offices in Newport Beach and San Diego (www.soliscapital.com).

“We are pleased with the success of Solis II, especially in this challenging fundraising environment,” said Daniel Lubeck, Managing Director and Founder of Solis. “We are encouraged by the support and strong interest from new institutional investors, and are gratified that so many of our Solis I investors have committed to Solis II. This is great validation of our team, strategy and processes which have consistently created value independent of economic cycles.”

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

Mesirow Financial Leads Sale of IGI to Wingate

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Mesirow Financial was the exclusive financial advisor to IGI Corp. in its recent sale to Nekoosa Coated Products, a portfolio company of Wingate Partners. 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 Nekoosa, Wingate and IGI join forces and continue to deliver innovative products and programs to the company’s valued global channel partners. Mesirow Financial’s advice throughout the process resulted in a successful outcome for all parties involved,” said Bud Philbrook, president and CEO of IGI.

Wingate Partners acquired Nekoosa Coated Products, a manufacturer of specialty paper products, from Dunsirn Partners and PS Capital Partners in October 2012. The acquisition of IGI Corp by Nekoosa is the company’s first add-on acquisition since being acquired by Wingate.

IGI is the parent company of RTape Corp. and CET Films Corp. RTape is a manufacturer of application tapes and specialty pressure sensitive materials for the sign, screen print and digital printing markets. The company is based in South Plainfield, NJ (hwww.rtape.com). CET Films manufactures custom cast-extruded films for a range of niche graphic arts and ancillary markets. The company is headquartered in Lakewood, NJ (www.cetfilms.com).

“We were honored to represent the shareholders of IGI in this process. Based on the strong financial performance that Bud Philbrook and his management team delivered at IGI, Mesirow Financial was able to create a highly competitive process that provided an attractive valuation for the shareholders and a strong, long-term partner for the company,” said Rocky Pontikes, managing director of Mesirow Financial.

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’s strong experience and relationships within the specialty paper and plastics sector allowed us to pair IGI with an established and knowledgeable strategic partner that is committed to furthering the company’s long-term growth objectives. IGI is representative of the type of transaction and M&A process that has made our firm a leading investment bank within the middle-market paper, plastics and packaging sector,” said Louis Mitchell, managing director of Mesirow Financial.

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

Babson Capital Backs Swander Pace Acquisition of gloProfessional

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Babson Capital Management has provided subordinated debt and made an equity co-investment to support Swander Pace Capital’s recent acquisition of Caleel + Hayden, which does business under the name gloProfessional. Babson Capital was the sole provider of mezzanine capital on the transaction.

gloProfessional is a developer and marketer of mineral-based cosmetics and other skin care products. Brand names include “glominerals” and “glotherapeutics”. The company serves over 5,000 dermatologists, cosmetic surgeons, aestheticians, spas, salons, and specialty retailers. gloProfessional is based in Denver (www.gloprofessional.com).

“Swander Pace Capital is delighted to partner with Babson Capital’s Mezzanine & Private Equity Group on the acquisition of gloProfessional, and we look forward to working together again on future transactions,” said Swander Pace Managing Director Mo Stout. “As with several previous portfolio investments, all parties to this transaction benefited from Babson Capital’s experience and expertise in the lower middle market, its highly collaborative approach, and its reliability and responsiveness.”

Babson Capital has $180 billion in assets under management and is a member of the MassMutual Financial Group. The firm has offices in Boston and Springfield, MA, New York, Chicago, Charlotte and Los Angeles (www.BabsonCapital.com).

“Babson Capital is excited about the opportunity to extend our successful partnership with Swander Pace through our participation in the gloProfessional investment,” said Michael Klofas, Managing Director and head of Babson Capital’s Mezzanine & Private Equity Group. “The management team of gloProfessional has built a strong position in a growing market, and we believe Swander Pace, with its reputation and track record in the beauty and personal care categories, is the perfect partner to help grow the gloProfessional brand.”

Swander Pace Capital invests in middle-market consumer products companies including branded and non-branded, manufacturers, marketers, and distributors that sell through a range of retail and institutional channels. The firm generally targets companies that have up to $300 million in revenues. Swander Pace manages over $1 billion in equity capital and has offices in San Francisco, CA and Bedminster, NJ (www.spcap.com).

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

Robert Haas to Head A.T. Kearney’s Private Equity Practice

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Management consulting firm A.T. Kearney has announced that Robert Haas will lead A.T. Kearney’s Private Equity Practice in the Americas. Mr. Haas is based in A.T. Kearney’s New York office.

Mr. Haas began his career with A.T. Kearney in 1996 and was elected a partner in 2003. In addition to his expertise in private equity, he has served clients in the consumer goods, healthcare, high-tech and financial services industries on issues such as corporate strategy, M&A, and enterprise transformation and restructuring.

In addition to his new responsibilities in private equity, Mr. Haas also has responsibility for A.T. Kearney’s Mergers & Acquisitions Practice in the Americas.

“Bob is uniquely qualified for this role based on his vast experience driving profit growth for companies in a wide variety of industries, as well his expertise in private equity and corporate M&A,” said Daniel Mahler, A.T. Kearney’s lead partner for the Americas.

A.T. Kearney’s private equity practice works with private equity firms through the entire investment process—from supporting the deal flow, 100-day planning, and restructuring operations, to building up assets, creating value, and exiting the deal (www.atkearney.com/private-equity).

“The changing dynamics of the private equity industry fit well with A.T. Kearney’s unique capabilities. A.T. Kearney’s deep industry knowledge and operations transformation experience deliver an unmatched combination of strategic insights and tangible EBITDA improvements to our clients,” said Mr. Haas.

A.T. Kearney’s industry specialties include aerospace and defense, automotive, chemicals, communications media and technology, consumer products and retail, financial institutions, health, metals and mining, oil and gas, private equity, public sector, transportation travel and infrastructure and utilities. A.T. Kearney was founded in 1926 and is headquartered in Chicago with additional offices in major business centers in 39 countries (www.atkearney.com).

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

Riveron Adds Director of Business Development

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Tony Cord has joined Riveron Consulting’s Washington DC office as its newest director of business development. In this role, Mr. Cord will focus on building strategic and corporate client relationships in the Mid-Atlantic region.

“Tony is a key hire for our DC office, as he is a native of the area with a demonstrated ability to envision, plan, implement and lead business growth initiatives,” said Riveron Founder Landon Smith.

Riveron is a financial consulting firm serving middle-market private equity funds and companies growing through acquisitions. Riveron Consulting is not a CPA firm; however, most of Riveron’s principals have large firm public accounting experience. Riveron helps clients maximize the value of strategic and financial transactions through buy-side financial due diligence, sell-side services and post-transaction special projects. Founded in 2003, Riveron is headquartered in Dallas and has additional offices in Washington, DC, Chicago and Houston (www.riveronconsulting.com).

Mr. Cord joins Riveron with more than 20 years of business development, acquisition, advisory, management and operating experience. Most recently he served as director for Navigant Consulting, where he rebuilt a business development platform with internal clients in the DC market. Prior to Navigant, Mr. Cord was with accounting firm Clifton Gunderson as regional managing director of growth services. He has also served as regional business development director for BDO Seidman and VP of Mergers and Acquisitions within American Express’s Tax and Business Services. Mr. Cord earned his Bachelor of Science degree in business management from the University of Maryland and his MBA from Southern Illinois University.

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

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