Archives for June 11, 2013

VMG Partners Exits Pirate Brands

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B&G Foods has entered into an agreement to acquire Robert’s American Gourmet Food (DBA Pirate Brands), an all-natural snack foods company, from VMG Partners, Driven Capital Management, founder Robert Ehrlich and other entities and individuals, for approximately $195 million in cash. VMG Partners first invested in Robert’s American Gourmet Food in November 2008.

Robert’s American Gourmet was founded in 1987 and offers a number of natural gourmet snack lines marketed under the Pirate’s Booty, Smart Puffs and Original Tings brand names. The company’s products are sold nationwide in major supermarket chains and specialty stores. Robert’s American Gourmet is based in Sea Cliff, NY (www.piratebrands.com).

“We are delighted to add Pirate Brands, including the iconic Pirate’s Booty, to the B&G Foods family of brands. The acquisition of this business and its collection of growing natural snack foods, marks the second addition to our snack foods portfolio since we entered the category last October,” said David Wenner, President and Chief Executive Officer of B&G Foods.

B&G Foods projects that following the acquisition Pirate Brands will generate net sales of $80 million to $90 million and adjusted EBITDA of $18 million to $20 million on an annualized basis after the business is fully integrated into B&G Foods.

“VMG Partners and Driven Capital Management, under the leadership of Mike Repole, have done an outstanding job with Pirate Brands over the past five years, building upon the fun, innovative, all-natural brand originated by Robert Ehrlich in 1987. We look forward to continuing to bring consumers great-tasting, all natural snack foods they have come to love and expect from Pirate Brands,” said Mr. Wenner.

VMG Partners invests in branded consumer products companies in the lower middle market. Targeted industries include food, beverage, wellness, pet and household products, personal care and lifestyle brands. The firm is has offices in San Francisco and Los Angeles (www.vmgpartners.com).

B&G Foods and its subsidiaries manufacture, sell and distribute a portfolio of branded shelf-stable foods across the United States, Canada and Puerto Rico. Brands include Ac’cent, Baker’s Joy, Brer Rabbit, Cream of Rice, Cream of Wheat, Grandma’s Molasses, Mrs. Dash, Ortega, and Red Devil among others. B&G Foods also sells and distributes two branded household products, Static Guard and Kleen Guard. The company is based in Parsippany, NJ (www.bgfoods.com).

B&G Foods intends to fund the acquisition of Robert’s American Gourmet Food with the remaining net proceeds of its recently completed senior notes offering and revolving credit borrowings under an existing credit agreement.

© 2013 PEPD • Private Equity’s Leading News Magazine • 6-11-13

Veronis Suhler Stevenson Invests in Navtech

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Veronis Suhler Stevenson (VSS) has made an investment in Navtech, a provider of flight operations software and tools for the commercial aviation industry. The VSS investment was made through its second structured capital fund, VSS Structured Capital II.

Navtech provides aeronautical products and services including aeronautical charts, navigational data and flight planning, aircraft performance and crew planning services. Customers include commercial airlines, cargo carriers, general aviation services providers and others. The company is headquartered in Toronto with offices in London and Stockholm (www.navtech.aero).

“We believe that Navtech’s state of the art, SaaS applications are well positioned to help airlines increase safety, maximize efficiency, and reduce operating costs,” said David Bainbridge, Partner, VSS Structured Capital Funds. “With its recently upgraded product portfolio, the company will continue to capture global market share and lead the development of an electronic flight bag solution.”

Current investors in Navtech include Cambridge Information Group which took Navtech private in 2007, and Externalis which first invested in Navtech in 2001. Cambridge Information Group is a family owned management and investment firm, primarily focused on information services, education and technology. The firm is based in New York with an additional office in Bethesda, MD (www.cig.com). Externalis is an industrial holding company owned by Alain Mallart. The company is based in Belgium (www.externalis.be).

“VSS is pleased to partner with Cambridge Information Group, a well-established family business that has years of experience in the information services industry,” said Hal Greenberg, Partner, VSS Structured Capital Funds. “We have very similar investment philosophies and industry focuses and we look forward to helping them expand this platform.”

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 in order to build companies both organically and through add-on acquisition programs. 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 73 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 • 6-11-13

Svoboda Invests in Blake & Pendleton

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Svoboda Capital Partners has made an equity investment in Blake and Pendleton, a provider of compressed air products. Svoboda Capital partnered with Allen King, CEO, and other members of Blake and Pendleton’s management team on this transaction.

Blake and Pendleton (B&P) supplies and services a range of equipment for the compressed air, pumping, heat transfer and mineral processing industries. The company also offers on-site and consultative technical services to industrial customers throughout the Southeast. The company was founded in 1971 and is headquartered in Macon, GA (www.blakeandpendleton.com).

“B&P is a regional market leader in the compressed air market, and Svoboda Capital is excited to partner with Allen and his talented management team to leverage our collective distribution and service experience,” said Rick Harpster, Principal at Svoboda Capital Partners. “We look forward to supporting the company’s plan to expand its service offering and geographic footprint.”

Svoboda Capital Partners has over $300 million of capital under management and invests from $10 million to $25 million in value-added distribution and business services companies that have revenues from $10 million to $100 million and EBITDAs from $3 million to $15 million. The firm was founded in 1998 and is based in Chicago (www.svoco.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 6-11-13

Water Street Acquires Medical Technology Resources

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Medical Specialties Distributors, a portfolio company of Water Street Healthcare Partners, has acquired Medical Technology Resources. Water Street first invested in Medical Specialties Distributors in 2010.

Medical Technology Resources (MTR) specializes in providing infusion pumps and related products, as well as biomedical and billing services, to alternate-site health care providers. The company is based in Columbus, OH (www.mtrhealth.com).

Medical Specialties Distributors (MSD) is a provider of infusion products, supplies, biomedical and distribution services, and technology services to the home infusion and oncology markets. MSD serves a base of 2,500 customers, including specialty pharmacies, home infusion companies and oncology clinics. The company is based in Stoughton, MA (www.msdonline.com).

“We identified MTR as an ideal acquisition for MSD several years ago. MTR builds on MSD’s core capabilities in product distribution and biomedical services and increases its presence in the Midwest geography. Longer-term, it expands MSD’s unique position as the leading national distributor dedicated to serving the growing numbers of home infusion providers,” said Rob Womsley, a partner with Water Street and chairman of MSD.

Water Street Healthcare Partners targets investments ranging from $50 to $500 million in four health care sectors: distribution, medical products, health care services, and pharmaceutical products and services. The firm has particular expertise in corporate divestitures from healthcare companies. Water Street has more than $1 billion of capital under management and is based in Chicago (www.waterstreet.com).

“MTR’s unique product offerings and strong presence in the Midwest enhances our leadership position in the growing home infusion and oncology markets,” said James Beck, president and CEO, MSD. “Over the past three years, we have grown our national footprint through partnerships with multi-site health care providers and strategic relationships with leading manufacturers. This acquisition is one more step toward our goal of creating a stronger growth platform for MSD.”

© 2013 PEPD • Private Equity’s Leading News Magazine • 6-11-13

Enhanced Equity Acquires The Pain Management Center

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Prospira PainCare, a provider of pain management services and a portfolio company Enhanced Equity, Webster Capital, and Pulse Equity, has acquired The Pain Management Center, a pain treatment center serving southern New Jersey and the Philadelphia metropolitan area.

The Pain Management Center was founded by practicing physician Dr. Adam Sackstein and is headquartered in Hamilton, NJ (www.painmanagementctr.com).

Prospira PainCare is an operator of physician practices in California and the Southeast U.S. focused on the pain management sector. The company was co-founded in August 2012 by Pulse Equity Partners and Barry Karlin (formerly Chairman & CEO of CRC Health Group, the nation’s largest behavioral healthcare company). The acquisition of The Pain Management Center follows the recent acquisition by Prospira PainCare of pain management and treatment centers in the southeast and western United States, including The National Pain Institute located throughout Florida, The Bay Area Pain & Wellness Center serving the San Francisco area and The Spine Center of Southeast Georgia. Prospira PainCare is headquartered in Mountain View, CA (www.prospirapc.com).

“Prospira PainCare is pleased to welcome The Pain Management Center into our existing portfolio of world-class pain management and treatment centers,” said Barry Karlin, Chairman & CEO of Prospira PainCare. “This partnership represents Prospira PainCare’s entrance in serving patients suffering from acute, chronic or intractable pain throughout the Northeastern United States.”

Enhanced Equity invests from $10 to $50 million in healthcare companies with annual revenues typically less than $100 million. The firm manages approximately $600 million of committed capital across two funds with the most recent raised in 2010. Enhanced Equity was founded in 2005 and is based in New York (www.enhancedequity.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 6-11-13

Onex Completes Dividend Recap of Carestream

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Carestream Health, a portfolio company of Onex Corporation, has raised approximately $2.4 billion of new debt to fund a $725 million distribution to shareholders, refinance existing debt facilities and pay fees and expenses associated with this recapitalization.

The Onex Group will receive a distribution of approximately $673 million, of which Onex’ share will be approximately $295 million, including carried interest of $48 million. Combined with prior distributions, the Onex group will have received approximately $1.2 billion, representing a 2.6x gross multiple of invested capital and a 22% cash-on-cash rate of return. Following the completion of this transaction, Onex will continue to own approximately 91% of Carestream.

Carestream Health is a provider of dental and medical imaging systems and healthcare IT services; X-ray film and digital X-ray systems for non-destructive testing; and materials for the precision films and electronics markets. Carestream Health has annual revenues of approximately $2.4 billion and is based in Rochester, NY (www.carestream.com).

The Onex Group acquired Carestream in April 2007 in a corporate carve-out from its parent, the Eastman Kodak Company. Over the past six years, Onex has worked with management on various initiatives that have resulted in a stronger and faster-growing digital platform and increased cash flow generation from its film operations. In 2013, Carestream is expected to generate $457 million of EBITDA and approximately $190 million in free cash flow.

“This is an excellent outcome for Onex and Carestream,” said Robert Le Blanc, a Senior Managing Director at Onex. “Carestream is truly an outstanding company led by a terrific CEO, Kevin Hobert, and deep and talented management team. We look forward to our continued partnership to further build on Carestream’s success.”

Onex Corporation makes private equity investments through the Onex Partners and the ONCAP families of funds. Onex has more than $16 billion of assets under management and is based in Toronto with additional offices in New York and London (www.onex.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 6-11-13