Archives for August 6, 2013

Sun Capital Partners and Main Street Exit Harry’s Fresh Foods

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Sun Capital Partners and Main Street Capital Holdings have sold their equity interests in Harry’s Fresh Foods to Joshua Green Corporation through its food-focused subsidiary, JGC Foods LLC.

Harry’s is a producer of chef-inspired fresh refrigerated and packaged soups, entrées, sides, sauces and desserts for the retail and foodservice markets. Harry’s customers include wholesale club stores, grocers, national restaurant chains, distributors and select other outlets throughout the U.S. and Canada. The company was founded in 1978 and is headquartered in Portland (www.harrysfresh.com).

Since its purchase by Sun Capital and Main Street in November 2010 from Basic American, Harry’s has successfully transitioned into a standalone business. This has required establishing the infrastructure necessary for operating as an independent entity, the recruitment and hiring of a growth-oriented management team, and the rebuilding of an effective direct sales force. Since evolving into a standalone business, Harry’s has achieved significant growth and increased profitability by broadening its customer base and leveraging its flexible manufacturing platform and innovative culinary team to introduce new products into the market.

“Harry’s emergence as an independent, successful market leader is the direct result of a disciplined commitment to strategic operational improvements, which has enabled the company to achieve excellent sales growth and nearly tripled profitability since our investment,” said Marc Leder, Co-CEO at Sun Capital. “We are confident that these efforts have positioned Harry’s for continued success.”

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 325 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).

Main Street Capital Holdings invests from $3 million to $25 million in companies with EBITDAs of at least $2 million and enterprise values of $10 million to $125 million. Sectors of interest include electronic manufacturing services, food, homeland security, metallic alloy parts, specialty or niche manufacturing, and value added distribution. The firm was founded in 1994 and is based in Pittsburgh (www.mainstcap.com).

“Much of our success at Harry’s can be attributed to the strength and experience of the management team,” said Dennis Prado, Principal of Main Street Capital Holdings. “The team’s commitment to quality and ongoing innovation will allow the company to continue to anticipate and meet consumer demand. The company’s flexibility and responsiveness has led to strong customer relationships that will continue to generate growth.”

© 2013 PEPD • Private Equity’s Leading News Magazine • 8-6-13

Hellman & Friedman Acquires Hub International

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Hub International Limited, a global insurance brokerage, has entered into an agreement to be acquired by funds advised by Hellman & Friedman for $4.4 billion. Hub International has been a portfolio company of Apax Partners since 2007. The transaction is expected to be completed before the end of 2013.

Under the terms of the agreement, Hellman & Friedman will hold a majority interest in the company, while members of Hub’s senior management will continue to have a significant equity position.

Hub International is a global insurance brokerage providing property and casualty, life and health, employee benefits, investment and risk management products and services through offices located in the United States (including Puerto Rico), Canada and Brazil. With more than 6,500 employees, Hub is expected to achieve adjusted 2013 revenue of approximately $1.2 billion. The company is headquartered in Chicago (www.hubinternational.com).

“Partnering with Hellman & Friedman will enable us to build upon our current strategy of enhancing our product and service capabilities and expanding our geographic footprint. We are excited that our new partners share our commitment to investing in our people and are dedicated to working with us to deliver even greater value to our clients,” said Martin Hughes, Hub Chairman and CEO. “By aligning our company with Hellman & Friedman, we are positioning Hub International for continued growth and success within our industry.”

“We have long admired Hub and are delighted to partner with Marty and the entire Hub team,” said David Tunnell, Managing Director of Hellman & Friedman. “Over 15 years, Hub has established itself as a market-leading insurance broker with a clear focus on customer success and growth. Its growing market footprint and capabilities will allow it to capitalize on significant opportunities going forward. Our firm has a longstanding history of investing in insurance businesses and we look forward to working with the Company to support its next phase of growth.”

The company’s existing debt arrangements will be replaced at closing with new debt financing that has been committed to by BofA Merrill Lynch, Morgan Stanley Senior Funding, Inc. and RBC Capital Markets.

Hellman & Friedman invests from $200 million to $750 million in companies across a range of industries including energy & industrials, software, business & marketing services, internet & digital media, financial services, insurance, media, and healthcare. Founded in 1984, the firm has raised and managed over $25 billion of committed capital and invested in over 60 companies. The firm is currently investing its sixth fund, with $8.4 billion of capital commitments. Hellman & Friedman is based in San Francisco with additional offices in London and New York (www.hf.com).

Apax Partners invests in the technology & telecom; retail & consumer; media; healthcare; and financial & business services sectors. The firm recently closed on its 8th fund with $7.5 billion of capital commitments. Apax is based in London and New York (www.apax.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 8-6-13

Huron Capital Acquires Dynamic Dental Partners

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Huron Capital Partners has completed the first in a series of planned investments in the dental services industry with an investment in Dynamic Dental Partners.

Dynamic Dental Partners (DDP) is a dental services organization that provides operational support to a network of dental practices located in Florida, Arizona and Virginia. The company is based in Sarasota (www.ddpfl.com).

“We are thrilled to be partnering with Huron Capital,” said Dr. Alex Giannini, DDP’s CEO. “We see a significant opportunity to continue building DDP and are grateful to have a like-minded partner in Huron who can provide the capital and operational expertise necessary to help us do so. We anticipate making several more acquisitions to continue expanding our footprint and partnering with dentists to provide exceptional quality of care to as many patients as possible.”

Huron aligned with DDP’s management team to provide the investment necessary to bring together the current network of practices with capital reserved to fund future acquisitions. The transaction marks Huron’s second investment in the dental industry, having acquired a majority interest in short-term cosmetic orthodontics provider Six Month Smiles in January 2013. The dental market is a $119 billion industry and growing steadily according to IBISWorld. DDP was the first investment made through The Huron Fund IV, LP, a $500 million private equity fund which closed in January 2013.

“Huron identified the DSO market as an industry of focus nearly two years ago, and we have found an ideal platform on which to build in DDP,” said Huron Partner Nick Barker. “DDP has a deep and experienced management team with a long track record of successfully identifying and executing acquisitions in the dental market, and we are excited to be partnering with them to continue growing the business.”

Huron Capital Partners invests up to $70 million per transaction in middle market companies that have revenues up to $200 million and EBITDAs of $5 million or more. Sectors of interest include education & training, healthcare, specialty chemicals, specialty packaging, consumer products, home decor, business services, industrial manufacturing, food & beverage, and marketing services. Since its founding in 1999, Huron has acquired or invested in 62 companies with aggregate revenues in excess of $1 billion. The firm currently manages over $1.1 billion in committed equity through four private equity funds, and has offices in Detroit and Toronto (www.huroncapital.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 8-6-13

Hastings Equity Partners Exits CP Energy Services

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Hastings Equity Partners has sold Fluid Management Holdings and CP Well Testing (collectively CP Energy Services) to Prospect Capital Corporation for approximately $105 million.

Fluid Management Holdings provides water hauling, disposal and acid services for oil & gas exploration and production companies in the Texas Panhandle and Western Oklahoma. The company operates under the names of ProHaul Transports and Foster Testing. The company is headquartered in Weatherford, OK (www.prohaul.us).

CP Well Testing provides flowback and well testing services in support of oil & gas exploration and production companies in the Granite Wash, Permian and Cana-Woodford plays. The company is headquartered in Elk City, OK (www.cpwelltesting.com).

“We appreciate the contributions that the Hastings team has made to CP Energy Services over the past two years and look forward to our new partnership with Prospect Capital,” said Craig Wright, Chief Executive Officer of CP Energy Services.

“Hastings couldn’t be more appreciative of the hard work and energy exhibited by the CP Energy Services leadership team and the impressive achievement of integrating five separate companies over the past two years,” said Ted Patton, Managing Director of Hastings Equity Partners. “This has led to the creation of the leading full service provider of water management solutions in Western Oklahoma and the Texas Panhandle, a vision we set out to achieve when we made our first investment in this region two years ago. Prospect Capital is the right partner to help grow this business to the next level.”

Hastings Equity Partners invests from $5 million to $15 million in niche manufacturing, distribution, and business services companies with EBITDAs from $2 million to $10 million. The firm is based in Waltham, MA (www.hastingsequity.com).

“CP Energy is led by a strong management team that we have gotten to know well over the past year through our involvement as a lender to CP Well,” said Mark Hull, a Principal with Prospect Capital Management. “The integration of flowback services with fluid hauling and disposal is highly compelling and expected to enhance the overall service offering to customers. Prospect is enthusiastic about supporting the management team in its investment and is pleased to provide Hastings Equity Partners, a valued sponsor relationship, with a monetization opportunity to support their fund raising.”

Prospect invests from $10 million to $75 million in private and micro-cap public businesses located in the US and Canada that have from $3 million to $30 million of EBITDA. Investment structures include: senior debt; unitranche debt; 2nd lien and mezzanine debt; and “one stop” debt and equity. The firm invests in wide array of industries and is effectively industry agnostic. T Prospect is located in New York (www.prospectstreet.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 8-6-13

Wingate Partners Closes Fund V at $255 Million

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Wingate Partners has held a final closing of Wingate Partners V, LP on July 31, 2013. The fund closed at its hard cap of $255 million.

“We were very pleased with the response of the limited partner community towards Wingate V. We are grateful for the continuing support of many of our longest tenured Limited Partners, some of whom have been our partners for over 25 years,” said Jim Johnson, the Fund’s Managing Partner. “We also added multiple new Limited Partners who understand and appreciate our investment approach and have potential to grow with Wingate over time,” added Mr. Johnson.

Wingate V will employ the same investment strategy it has followed in it four prior funds and will be managed by the same core group of investment professionals who have worked at Wingate an average of 15 years.

Wingate Partners makes control equity investments in manufacturing, distribution and service businesses, typically with revenues between $50 million and $250 million. Since founding in 1987, Wingate has managed five funds with total capital of approximately $755 million. The firm is based in Dallas (www.wingatepartners.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 8-6-13

GE Capital Finances Roark Capital’s Acquisition of Miller’s Ale House

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GE Capital’s Franchise Finance business has provided financing to Roark Capital Group for the acquisition of Miller’s Ale House. GE Capital served as administrative agent, with GE Capital Markets serving as joint lead arranger and joint bookrunner.

Miller’s Ale House is a 65-unit casual dining restaurant chain with approximately $300 million in system-wide sales. The menu offers steaks, seafood, pasta, salads, sandwiches and desserts. The chain’s full-service bar features more than 75 beers, plus wine and liquor. The company was founded in 1988 by Jack Miller (CEO) and is headquartered in Jupiter, FL (www.millersalehouse.com).

“Based on GE Capital’s experience in the restaurant industry and its dedicated resources, it was clear that they were the right choice to team up with on this transaction. As expected, they were able to deliver a seamless execution,” said Ezra Field, a partner at Roark Capital. “We were pleased with the expertise and commitment of the entire deal team.”

Roark Capital Group invests in consumer and business services companies, with a focus on the franchise, food and restaurant, specialty retail, environmental services, waste management, and marketing services sectors. The firm has $3 billion in equity capital under management and is based in Atlanta (www.roarkcapital.com).

GE Capital, Franchise Finance is a lender to the US franchise finance market via direct sales and portfolio acquisitions. With more than 30 years of experience and over $7 billion in served assets, it provides financing to more than 2,000 customers. The business specializes in financing mid-market operators with multiple stores in the restaurant and hospitality industries (www.gecapital.com).

“We’re pleased to participate in this acquisition with Roark Capital, one of the largest restaurant-focused private equity sponsors in the US,” said Bill Kraus, a managing director at GE Capital, Franchise Finance. “Although M&A in the restaurant business was relatively slow in the first half of this year, we’ve been able to sustain our momentum. The ability to leverage multiple co-investment programs in this transaction — in addition to our capital markets successes earlier in the year — helped us deliver for our customer.”

© 2013 PEPD • Private Equity’s Leading News Magazine • 8-6-13