Archives for July 19, 2013

Trive Raises First Fund

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Trive Capital has held a final closing of Trive Capital Fund I LP (Fund I) with $300 million of capital commitments. Fund I reached its hard-cap in five months and was oversubscribed from its initial $250 million target.

“We are humbled by the strong support and interest we have received from investors globally and are proud to have partnered with world class public and private pension funds, endowments, foundations, fund of funds and family offices,” said Conner Searcy, Managing Partner of Trive. “The success of the fundraise was a testament to our deep value investing approach, quality of the Trive team and prior success deploying an operationally-focused investment strategy.”

Trive Capital invests from $5 million to $40 million in North America headquartered companies with revenues of $30 million to $500 million. Sectors of interest include automotive & transportation; aerospace & defense; building products; construction & infrastructure; consumer goods; energy services; healthcare; manufacturing and industrials; chemicals; distribution; business & professional services; and communications. The firm as founded in 2012 by Conner Searcy, Managing Partner, and Chris Zugaro, Partner. Trive Capital is based in Dallas (www.trivecapital.com).

Trive Capital has already acquired three companies for its first fund. In September 2012 the firm acquired Southern Towing, an inland tank barge operator based in Memphis (www.southerntowing.net). In December 2012, Trive acquired Precise Packaging, a manufacturer of pressurized spray products based in Fall River, MA (www.precisepackaging.com). In February 2013, Trive acquired Huron, a supplier of tubular assemblies and other machined products for the automotive industry based in Lexington, MI (www.huroninc.com).

“Trive’s hands-on operational approach brings a skill set absent in many lower middle market businesses, substantially increasing the velocity of upside achievement and enterprise improvement,” said Mr. Zugaro. “The close of Fund I caps a very busy year for Trive during which we completed three platform investments and significantly grew the team.”

MVision Private Equity Advisers acted as the exclusive fundraising advisor for Trive Capital.

© 2013 PEPD • Private Equity’s Leading News Magazine • 7-19-13

Blue Wolf Closes Fund 3 at Hard Cap

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Blue Wolf Capital Partners has closed on $300 million in capital commitments for its latest fund, Blue Wolf Capital Fund III, LP. The Fund was oversubscribed and closed at its hard cap of $300 million. Fund III’s investors, which are primarily located in the United States and Europe, include foundations, endowments, fund of funds and public, corporate, and Taft-Hartley pension funds.

Blue Wolf invests in companies in which effective management of relationships with complex constituencies, such as government and labor, can change organizations and create value. The firm’s investment criteria are minimum revenues of $25 million; minimum transaction size of $20 million; and a minimum investment size of $10 million. Blue Wolf focuses its efforts on companies based in and doing the bulk of their business in the United States and Canada. With the closing of Fund III, Blue Wolf now manages over $460 million in capital. The firm is headquartered in New York (www.blue-wolf.com).

To date, Fund III has already made two investments. In May 2013, Blue Wolf acquired Twin Rivers Paper Company, a manufacturer of packaging, label and publishing products, based in Portland, ME (www.twinriverspaper.com), and in July 2013, Blue Wolf acquired Suwannee Lumber Company, a manufacturer of softwood lumber based in Cross City, FL (www.suwanneelumber.com).

“We are delighted with the global, high quality investor base which has joined us in Fund III. My partners, Michael Ranson and Charlie Miller, and I, along with our growing team, value their support,” said Adam Blumenthal, Managing Partner of Blue Wolf. “We are pleased with the first two portfolio companies Fund III has acquired, and we look forward to continuing to use our operational and financial resources to transform and revitalize companies and ensure their competitive future.”

Stanwich Advisors acted as the exclusive placement agent for Blue Wolf. Stanwich provides advisory and fundraising services to private equity partnerships globally. The Stanwich team has raised in excess of $17 billion for more than 40 funds from institutional investors based in North America, Europe, Asia, Australia, and the Middle East. The firm was founded in 2003 by Charles Daugherty, Managing Partner, and is based in Stamford, CT (www.stanwichadvisors.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 7-19-13

PEGCC Performance Update: PE Continues Outperformance of S&P 500

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Private equity returns significantly outperformed the S&P 500 in the most recent analysis from the Private Equity Growth Capital Council’s Performance Update.  Private equity returns (net of fees) outperformed the S&P 500 (including dividends) over the 3-year, 5-year and 10-year horizons as of December 31, 2012 by 4.3%, 5.1% and 7.0%, respectively. Private equity performance is based on the Cambridge Associates US Private Equity Index, which indicated private equity IRR returns of 15.2%, 6.7% and 14.1% during the respective periods.

“Our most recent Performance Update demonstrates that private equity continues to provide strong and reliable returns to our investors – pension funds, university endowments and charitable foundations,” said PEGCC President and CEO Steve Judge. “With private equity investing $347 billion in more than 2,000 US-based companies last year, these investments strengthen companies and lead to economic growth.”

The PEGCC Performance Update’s analysis of pension funds’ private equity performance also revealed impressive returns. Median private equity returns earned by the public pension funds (net of fees) studied outperformed the S&P 500 over the 3-year, 5-year and 10-year horizons by 3.0%, 3.0% and 5.9%, respectively. A recent PEGCC whitepaper analyzing public pension investments found that private equity is the only asset class that has produced annualized 10-year returns over the average pension target return of 8 percent.

“The long-term trend shows that private equity investments yield higher returns for public pension funds than other asset classes,” said Bronwyn Bailey, PEGCC vice president of research. “These returns are invaluable to pension recipients and translate into stronger retirement security for police officers, fire fighters, public school teachers and more.”

The Private Equity Growth Capital Council is an advocacy, communications and research organization, and resource center established to develop, analyze and distribute information about the private equity and growth capital investment industry and its contributions to the national and global economy. Established in 2007, the PEGCC is based in Washington, DC (www.pegcc.org).

Click HERE for a free copy of the 29-page Private Equity Growth Capital Council’s quarterly performance analysis.

© 2013 PEPD • Private Equity’s Leading News Magazine • 7-19-13

Babson Backs Silver Oak’s Buy of Tranzonic

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Babson Capital Management has provided subordinated debt and made an equity investment to support Silver Oak’s acquisition of The Tranzonic Companies from Linsalata Capital Partners. Babson Capital was the sole provider of subordinated debt on the transaction.

Tranzonic is a distributor of away-from-home disposable absorbent and non-absorbent maintenance, cleaning and safety products. Products include a suite of janitorial and sanitation products, including industrial wipers, toilet seat covers, gloves, feminine hygiene products, air care products, restroom supplies, sorbents and other safety products. Tranzonic was founded in 1933 and is headquartered in Richmond Heights, OH, with distributions facilities in Knoxville, Reno, and Miami (www.tranzonic.com).

Babson Capital has $183 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, and nine other offices in Europe, Asia and Australia (www.BabsonCapital.com).

“Babson Capital is excited to build on our previous relationship with Silver Oak through our participation in the Tranzonic investment,” said Michael Klofas, Managing Director and Head of the U.S. Mezzanine & Private Equity Group for Babson Capital. “As the incumbent lender, Babson Capital knows Tranzonic’s business and management team well, and we look forward to participating in the company’s success as Silver Oak and management implement their growth strategy in the years ahead.”

Silver Oak makes control investments of $10 million to $30 million in companies with revenues from $15 million to $150 million and EBITDAs from $4 million to $20 million. Sectors of interest include business services, healthcare services, and consumer services. The firm recently closed its newest fund, Silver Oak Services Partners II, LP, with total commitments of $206 million. Silver Oak is based in the Chicago suburb of Evanston (www.silveroaksp.com).

“Silver Oak is pleased to join with Babson Capital on our investment in Tranzonic,” said Greg Barr, Managing Partner of Silver Oak. “Babson Capital’s expertise and commitment to responsive, reliable, and flexible service made it an invaluable partner on this transaction.”

© 2013 PEPD • Private Equity’s Leading News Magazine • 7-19-13

Providence Acquires Corporate Training Businesses

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Providence Equity Partners has acquired five corporate training businesses from Informa, an academic publishing and business information company, for $180 million consisting of $100 million in cash, $65 million in seller financing, and up to an additional $15 million in earn-out payments based on 2013 revenues. This transaction is expected to close in the third quarter of 2013.

The five corporate training businesses include Achieve Global, a provider of customer service training based in Tampa (www.achieveglobal.com); ESI International, a provider of project management training based in Arlington, VA (www.esi-intl.com); Forum, a provider of leadership and sales performance training based in Boston (www.forum.com); Huthwaite, a provider of sales and marketing performance training based in Arlington, VA (www.huthwaite.com); and Omega, a provider of lending and loan portfolio management training based in Arlington, VA (www.omega-performance.com).

Providence Equity Partners invests in the media, entertainment, communications and information industries and has approximately $28 billion of capital under management. The firm was founded in 1989 and is based in Providence, RI with additional offices in New York, Los Angeles, London, Hong Kong, and New Delhi (www.provequity.com).

Informa is a multinational publishing and conference company with offices in more than 43 countries and more than 8,500 employees. The company is headquartered in Zug, Switzerland (www.informa.com).

Moelis & Company is acting as Informa’s financial advisor on this transaction.

© 2013 PEPD • Private Equity’s Leading News Magazine • 7-19-13

H.I.G. Capital Invests in Creme Mel Sorvetes

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H.I.G. Capital has made an investment in Creme Mel Sorvetes, a Brazilian ice cream company. The current shareholders of Creme Mel Sorvetes, Antonio Santos and Group Odilon Santos, will remain shareholders in the company.

Creme Mel is the largest ice cream producer in the Mid-West of Brazil. The company has over 900 employees and sells ice cream in 9 Brazilian states. The company was founded in 1987 by the Antônio Santos and is headquartered in Goiás, Brazil (www.crememel.com.br).

H.I.G.’s investment will be used to expand production capacity with the construction of a new plant and will provide capital for a faster expansion throughout Brazil.

“We are very pleased to have the opportunity to help Creme Mel’s management team continue its tremendous success story of rapid growth. Creme Mel produces top-of-class products and is very well positioned to expand its sales throughout Brazil. With a team of skilled and seasoned professionals already in place, we will work together with management to bring additional talent needed to support the company’s growth,” said Fernando Marques Oliveira, Managing Director and Head of H.I.G. Brazil.

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 $13 billion of 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).

“We are very excited to have H.I.G. as a partner. Their ability and experience in helping companies grow all over the world will help accelerate the expansion of Creme Mel into new markets. We’ll be able to take Creme Mel ice creams to even more clients, always keeping our high quality standards,” said Mr. Santos.

© 2013 PEPD • Private Equity’s Leading News Magazine • 7-19-13

J.W. Childs Exits Joseph Abboud

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The Men’s Wearhouse has signed an agreement to acquire JA Holding, Inc., the parent company of American clothing brand, Joseph Abboud and a portfolio company of J.W. Childs Associates, for $97.5 million in cash. J.W. Childs Associates first invested in Joseph Abboud in March 2004.

Joseph Abboud is a men’s apparel company that designs, merchandises, sources, manufactures, markets and distributes a range of products, including suits, sport coats and trousers. The company is a supplier to Saks, Neiman Marcus, Nordstrom, Bloomingdale’s and Macy’s West. The company manufactures its suits, sport coats and trousers at a company-owned factory dedicated exclusively to Joseph Abboud in New Bedford, MA. Joseph Abboud was founded in 1986 and is headquartered in New York (www.josephabboud.com).

“We are proud of the progress that we have made during our nine-year partnership with J.W. Childs in building Joseph Abboud into a modern, sophisticated menswear and lifestyle brand. We look forward to continued growth in the brand at Men’s Wearhouse,” said Anthony Sapienza, President and CEO at JA Holding.

J.W. Childs Associates invests in middle market companies based in North America. Sectors of interest include consumer products, specialty retail and healthcare. The firm was founded in 1995 and is based in Waltham, MA (www.jwchilds.com).

Men’s Wearhouse (NYSE: MW) is a specialty retailer of men’s apparel with 1,141 stores. The company was founded in 1973 and is headquartered in Houston (www.menswearhouse.com).
Men’s Wearhouse expects to finance this acquisition with cash on hand and/or from availability under its existing credit facilities.

J.P. Morgan Securities is serving as financial advisor to Men’s Wearhouse, and Willkie Farr & Gallagher is serving as legal advisor. Kaye Scholer is serving as legal advisor to JA Holding and North Point Advisors is serving as financial advisor.

The transaction is expected to close in the third quarter of 2013.

© 2013 PEPD • Private Equity’s Leading News Magazine • 7-19-13