Archives for July 16, 2013

Greenbriar Acquires Parkway Aerospace & Defense

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Parkway Products has completed the sale of its Parkway Aerospace & Defense business to EDAC Technologies, a portfolio company of Greenbriar Equity Group which was acquired in March 2013.

“The combination of Parkway Aerospace & Defense and EDAC brings together two rapidly growing and engineering-led aerospace companies focused on serving a common set of customers with world-class manufacturing and design capabilities,” said Noah Roy, Managing Partner at Greenbriar.

Parkway Aerospace & Defense is a provider of polymer-matrix composite engine components and aerostructures. Parkway Aerospace & Defense facilities are located in Erlanger, KY, and Saltillo, Mexico, and focus on injection, compression and resin transfer molding, autoclave production and aerospace-specific assembly (www.aerospace.parkwayproducts.com).

Nick Bitter, President of Parkway Aerospace & Defense, and his management team will continue to lead the business post-sale in a newly formed subsidiary, EDAC Composites, which will be headquartered in Erlanger, KY.

EDAC Technologies is a diversified manufacturing company serving the aerospace and industrial markets. In the aerospace sector, EDAC offers design and manufacturing services for commercial and military aircraft, in such areas as jet engine parts, special tooling, equipment, gauges and components used in the manufacture, assembly and inspection of jet engines. Industrial applications include high-precision fixtures, gauges, dies and molds, as well as the design, manufacture and repair of precision grinders and precision spindles. The company is based in Cheshire, CT (www.edactechnologies.com).

“Parkway’s highly regarded aerospace composite manufacturing and engineering expertise, and decades-long track record of partnership with many of EDAC’s largest customers, will enhance the combined company’s strategic position and significantly broaden the manufacturing, engineering, design and development capabilities available to our customers,” said Dominick Pagano, CEO of EDAC.

Greenbriar Equity Group invests from $50 million to $150 million per transaction in the global transportation industry, including companies in aerospace & defense, automotive, freight & passenger transport, logistics & distribution, and related sectors. The firm manages $2 billion of committed capital and is based in Rye, NY (www.greenbriarequity.com).

Houlihan Lokey served as exclusive financial advisor to Parkway Products in this transaction.

Parkway Products is a provider of custom molded products through two divisions: Aerospace & Defense (now sold to Greenbriar Equity Group) and Enterprise Molded Products. Parkway Products will retain its industrial & automotive Enterprise Molded Products business that is headquartered in Florence, KY; with plants in Atlanta, GA; Marietta, GA; Seneca, SC; Loveland, CO; and a separate location in Saltillo, Mexico (www.parkwayproducts.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 7-16-13

KRG Capital Partners Acquires RiverTech Medical

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Vention Medical, a portfolio company of KRG Capital Partners since May 2008, has acquired RiverTech Medical, a supplier of medical products.

RiverTech Medical is a supplier of polyimide tubing, braided polyimide (products made out of polyimide materials are lightweight, flexible, resistant to heat and chemicals), composite tubing and wire coatings for numerous medical devices and medical device applications. The company is headquartered in Chattanooga, TN (www.rivertechmed.com).

Vention Medical is a designer, manufacturer and assembler of medical devices. The company specializes in components and services used in interventional and minimally invasive surgical products, including medical balloons, catheters, heat shrink tubing, clean room injection molding, finished device assembly and packaging services. Vention Medical is headquartered in South Plainfield, NJ (www.ventionmedical.com).

KRG specializes in acquiring and recapitalizing unique and profitable middle-market companies. Since inception, KRG has invested in 45 platform companies and has completed 136 add-on acquisitions for those platforms. Founded in 1996, KRG has over $4 billion of capital under management and is based in Denver (www.krgcapital.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 7-16-13

Skyview Capital Acquires Mimio

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Skyview Capital has acquired the Teach platform of Newell Rubbermaid which includes the Mimio and Headsprout interactive teaching technology brands.

Mimio is a provider of interactive teaching technologies for K–12 classrooms. Mimio’s technologies include the recently launched MimioMobile app and its MimioStudio classroom software. These two programs give teachers the ability to create collaborative learning environments using mobile devices in their classrooms. The MimioSprout and Mimio Reading online instructional reading programs provide schools and homes lessons to teach reading to students in pre–K through eighth grade. The complete MimioClassroom suite of interactive technologies and instructional software are used in more than 600,000 classrooms worldwide. Mimio was founded in 1997 and is headquartered in Cambridge, MA (www.mimio.com).

“We are very excited about adding Mimio to the Skyview portfolio. We see tremendous potential in both the education technology and curriculum segments. Mimio has cutting-edge technologies to enhance the learning experience for students around the world,” said Alex Soltani, chairman of Skyview Capital.

Skyview Capital specializes in the acquisition and management of “systems – critical” businesses in the areas of technology, telecommunications, business services, and niche manufacturing. Target companies will typically be divisions, assets, or subsidiaries of Fortune 1000 companies that have revenues of $10 million to $400 million and that are no longer core to their owner’s overall business strategy. Acquisitions can be geographically located in North America, South America, and Europe. Skyview is headquartered in Beverly Hills (www.skyviewcapital.com).

“Skyview has a deep understanding of and experience in the technology industry and sees the value Mimio has to offer. The firm has a proven track record of helping companies increase in value, and we are confident that the Mimio business will benefit from this expertise as we continue to fulfill our mission of offering innovative and relevant instructional technologies,” said Mimio’s General Manager, Manny Perez.

Newell Rubbermaid (NYSE: NWL) is a marketer of consumer and commercial products with 2012 sales of approximately $5.6 billion. Brands include Sharpie, Paper Mate, Rubbermaid Commercial Products, Irwin, Lenox, Parker, Waterman, Rubbermaid, Levolor, Calphalon, Goody, Graco, Aprica and Dymo. The company is headquartered in Atlanta (www.newellrubbermaid.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 7-16-13

Fireman Capital Partners Exits Hudson Clothing

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Hudson Clothing, a portfolio company of Fireman Capital Partners, has signed an agreement to be acquired by Joe’s Jeans (NASDAQ: JOEZ). The purchase price for Hudson is approximately $97.6 million and will be payable in cash and convertible notes issued by Joe’s Jeans. Fireman first invested in Hudson Clothing in March 2009.

“We are proud of our partnership with Hudson and all that we have achieved together, and are pleased that Hudson has found a perfect home with Joe’s Jeans to take the company to the next stage in its development,” said Dan Fireman, Managing Partner of Fireman Capital Partners.

Hudson is a designer and marketer of women’s and men’s premium branded denim apparel. The company’s products include a core denim line as well as non-denim tops and bottoms. Hudson sells both a core collection and a premium HUDSON Collection, in addition to select collaborations. Hudson’s products are sold through national department stores, and boutique and specialty stores around the country, as well as through retailers in over 30 countries around the world. The company was founded by Peter Kim in 2002 and is based in Los Angeles (www.hudsonjeans.com).

Mr. Kim, who will remain Chief Executive Officer of Hudson, will become a member of the Joe’s Jeans Board of Directors.

Joe’s Jeans designs, develops and markets apparel products worldwide. The company’s products are sold through retailers, specialty stores, distributors and through the Internet. Brands include Best Friend, Chelsea, Cigarette, Ex-Lover, Honey, Icon Muse, Provocateur, Rocker, Socialite, Starlet, Stardust, Twiggy, Visionaire, Brixton, Classic, Outsider and Rebel. Joe’s Jeans was founded in April 1987 and is headquartered in Commerce, CA (www.joesjeans.com).

“We are extremely excited about joining forces with Hudson Jeans. Once the acquisition is complete, we expect to nearly double the size of our business, meaningfully increase our international and e-commerce penetration, and enhance our overall prospects for growth,” said Marc Crossman, President and Chief Executive Officer of Joe’s Jeans. “This deal represents a landmark event in the history of our company and we are committed to capitalizing on the many opportunities this transformative transaction will create in the marketplace.”

Fireman Capital Partners was established in 2008 under Chairman Paul Fireman and Managing Partner Dan Fireman. The firm invests in consumer products companies with revenues between $20 million and $150 million. The firm is based in Boston (www.firemancapital.com).

Threadstone Advisors, an investment bank based in New York (www.threadstonelp.com) served as financial advisor to Joe’s Jeans and investment bank Lazard Middle Market (www.lazardmm.com) served as financial advisor to Hudson Clothing on the transaction.

© 2013 PEPD • Private Equity’s Leading News Magazine • 7-16-13

Riverside Acquires ProSites

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The Riverside Company has acquired ProSites, a medical and dental website designer. ProSites will be merged with Riverside portfolio company CPASiteSolutions (CPASS), a provider of websites for the accounting industry. Riverside acquired CPASS in November 2011.

ProSites is a medical and dental website designer and Internet marketing services provider that serves over 6,000 doctors nationwide. The company is based in Temecula, CA (www.ProSites.com).

CPASS provides products and services that are used by CPA firms to develop online marketing tools. CPASS offers its software-as-a-service, web design and support to help establish a CPA firm’s online presence through which a firm can interact with existing and prospective customers. The company is based in Winooski, VT (www.cpasitesolutions.com).

The merger of ProSites and CPASS will combine technology and design expertise of both companies to provide online marketing services for dental, medical, and accounting professionals. “This represents a great opportunity to leverage synergies between both organizations while focusing on customer needs to extend market reach,” said Riverside Managing Partner Loren Schalchet.

ProSites Founder and CEO Lance McCollough will serve as the CEO of the combined company, and Brian O’Connell of CPASiteSolutions (CPASS) will remain involved with the merged companies as a consultant.

“We are very pleased to combine CPASS with a company as strong as ProSites,” said Dan Haynes, Riverside Vice President. “We look forward to enhancing the company both organically and through add-on acquisitions.”

Working with Mr. Schlachet and Mr. Haynes on the transaction for Riverside were Associate Elaine Ho, Operating Partner Jeff Tobin, and Operating Executive – Finance, Kim Katzenberger.

Fifth Street Capital provided financing for the transaction and Deloitte & Touche advised Riverside on financial due diligence.

The Riverside Company is a private equity firm focused on the smaller end of the middle market (“SEMM”). Riverside specializes in investing in SEMM companies (those valued up to $250 million) and partners with management teams to build companies through acquisitions and value-added growth. Since 1988, the firm has invested in more than 311 transactions with a total enterprise value of more than $6 billion. The firm’s current portfolio includes more than 75 companies. The Riverside Company is headquartered in New York with additional offices in Atlanta, Chicago, Cleveland, Dallas, Los Angeles, San Francisco, and London (www.riversidecompany.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 7-16-13

CalSTRS PE Portfolio Hits 13.9% Return in 2012–13

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Steady growth in the global equity market fueled a 13.8 percent investment return at the California State Teachers’ Retirement System to close the 2012–13 fiscal year. Despite this performance, CalSTRS still faces long-term funding challenges as a result of setbacks the System incurred during the financial crisis of 2008.

The CalSTRS Investment Portfolio’s market value for the fiscal year ending June 30, 2013 was $165.8 billion. Investment holdings were allocated as follows: 53.3 percent in US and non-US stocks (global equity); 16.8 percent in fixed income; 13.2 percent in private equity; 13.8 percent in real estate; 1.1 percent in inflation sensitive assets; and 1.6 percent in cash.

Returns for this fiscal year shows investment returns well above the actuarial assumed rate of 7.5 percent but just under the System’s policy benchmark of 13.3 percent. Returns by asset class are as follows:

On a long-term, portfolio-wide basis, CalSTRS returns are as follow: 12.6 percent over three years; 3.7 percent over five years; 7.5 percent over 10 years; and 7.5 percent over 20 years.

“These numbers are very encouraging,” said CalSTRS Investment Committee Chairman Harry Keiley. “While we take great pride in the dedication and acumen of our investments staff at CalSTRS, the reality is that even good investment performance addresses only part of the long-term needs of the fund, which suffered a severe setback in the financial crash of 2008.”

Investment returns have been erratic over the past several years. The current performance followed a lackluster year with the fund returning only 1.8 percent in 2011–12, preceded by a 23.1 percent return in 2010–11. As of June 30, 2012, CalSTRS was 67 percent funded with an unfunded actuarial obligation—or funding gap—of $70 billion.

“This year reminds us that a pension fund measures its health over the long term and no single year can take us from underfunding to funding adequacy,” said CalSTRS Chief Executive Officer Jack Ehnes.

The California State Teachers’ Retirement System is the largest teacher pension fund and second largest public pension fund in the United States (www.calstrs.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 7-16-13