Archives for September 4, 2013

Riverside Acquires Kyjen Company

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The Riverside Company has acquired Kyjen Company, a designer and distributor of branded dog toys.

Kyjen Company is a designer and distributor of branded dog toys.  Kyjen’s products are differentiated by their focus on promoting mental and physical wellbeing of dogs by encouraging problem solving, mental stimulation and engagement with humans. Kyjen sells its Plush Puppies, Invincibles, Outward Hound and Dog Games products through more than 100 distributors and 1,100 retailers. Kyjen’s products range from high-quality interactive dog toys to outdoor and travel gear for dogs.  The company is based in Centennial, CO (www.shop.kyjen.com).

“As people become more aware of their dogs’ needs for stimulating play, pet accessories are a growing industry, and Kyjen is poised to be able to meet those increasing demands,” said Riverside Partner Joe Lee. “They are outstanding at developing new products and uncovering unmet needs, and we look forward to helping them continue to innovate.”

Riverside will work to increase Kyjen’s market penetration, continuing to strengthen the company’s history of strong product innovation and supporting the sales and marketing functions.

“Kyjen provides a lot more than simple dog toys and accessories,” said Riverside Managing Partner Loren Schlachet. “Their products create fun and interactive experiences that enrich dogs’ lives. We see tremendous upside in this innovative company.”

Assistant Vice President Stephen Rice, Associate Danielle Leimbach and Operating Partner Jeff Goodman worked with Mr. Schlachet and Mr. Lee on the transaction for Riverside. Centralized CFO Dan Stankey served as Finance Director on the deal. Regional Director, Origination Jeremy Holland originated the deal for Riverside and Vice President Dan Haynes worked on financing the transaction for the firm.

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 310 transactions with a total enterprise value of more than $6 billion. The firm’s current portfolio includes more than 70 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).

Deerpath provided the financing, Jones Day advised, and West Monroe provided IT and operational diligence for Riverside on the transaction.

© 2013 PEPD • Private Equity’s Leading News Magazine • 9-4-13

Huntington Capital Exits Vantage Mobility

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Huntington Capital has sold its Fund II investment in Vantage Mobility International, a manufacturer of wheelchair accessible vehicles.

Vantage Mobility International s a manufacturer of wheelchair accessible vehicles, platform lifts for wheelchairs and other accessibility products. VMI has the second largest market share in North America within the personal mobility segment. VMI’s primary product is minivan conversions which are sold through an extensive mobility equipment dealer network operating approx 275 retail locations throughout the US and Canada. The company was founded in 1987 and is based in Phoenix (www.vantagemobility.com).

Huntington Capital provided funding to Vantage Mobility in January 2011 to support the working capital requirements associated with vehicle platform changeovers and product development for three different models including Toyota, Honda and Chrysler/Dodge.  These platform changes have allowed the company to execute its growth plan successfully. Post investment the company has experienced strong growth and was able to pay off Huntington’s mezzanine debt using internal cash flow, resulting in a favorable outcome for Huntington and VMI.

“For the last 2 ½ years Huntington Capital has been an outstanding partner for VMI. They have been instrumental in our growth, both from a revenue and EBITDA performance perspective. Morgan Miller and his team have been there for us at every turn with both capital as well as business acumen support,” said Tim Barone CFO of VMI.  “The best things that I can say about Huntington is that when the need arises for more capital they will be the first phone call that I make and that I have recommended their firm to many people in the financial community”.

 “Our participation in Vantage Mobility’s growth is an excellent example of how Huntington can assist a company with medium term working capital needs to achieve its operating objectives,” said Morgan Miller, Founder and Managing Partner of Huntington Capital.  ”In this case VMI had a need to cover unusually high engineering costs due to new models of both Toyota and Honda mini-vans being introduced in the same year and platform changes by Chrysler. This was a text book case of a company needing more than a commercial bank could provide in a line of credit and not wanting to raise equity.  The results are mostly a reflection of top quality planning and execution by VMI’s management and board, which is one of the best managed middle-market companies that we’ve seen”.

Huntington Capital is a mezzanine capital provider to lower middle market companies throughout California and the Southwestern United States. Huntington is operating three limited partnerships and is currently seeking new investments for its recently formed Huntington Capital Fund III.  Huntington invests in businesses generating between $10 million and $75 million in revenues across a range of industries. Investments are typically structured in the form of growth capital, buyout or acquisition financing ranging between $2 million and $7 million. The firm was founded in 2000 and is based in San Diego (www.huntingtoncapital.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 9-4-13

Crestview Partners Acquires DS Waters

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Crestview Partners has completed its previously announced acquisition of DS Waters of America, a provider of direct-to-consumer beverage services.

DS Waters of America is a diversified beverage company providing bottled drinking water, brewed beverages and water filtration systems to more than 1.4 million homes, offices, restaurants, food service organizations, convenience stores, and retail locations. The company’s bottled water products are sold under the brand names Alhambra, Athena, Belmont Springs, Crystal Springs, Deep Rock, Hinckley Springs, Kentwood Springs, Mount Olympus, Nursery Water, Sierra Springs, and Sparkletts. DS Waters also sells brewed coffee and tea beverages under the Standard Coffee brand and provides water filtration systems, equipment and services under the Relyant brand. The company supplies its products through 30 company-owned manufacturing sites across 40 US states and through 10 supplier-managed facilities. DS Waters of America is headquartered in Atlanta (www.water.com) (www.nurserywater.com) (www.coffeeservice.com) (www.myutapia.com).

“We are very pleased to have the opportunity to participate alongside a highly experienced management team in the growth of one of the true market leaders in the beverage services industry.” said Jeffrey Marcus, a Partner at Crestview.

Crestview Partners invests from $100 million to $250 million in companies with enterprise values up to $3 billion. Sectors of interest include media, financial services, healthcare and energy. The firm was founded in 2004 and is based in New York (www.crestview.com).

“As a result of this new partnership with Crestview, we are more confident than ever in our ability to expand our product and service offering and geographic reach while maintaining our outstanding customer service in metropolitan markets throughout the United States,” said Tom Harrington, President and Chief Executive Officer of DS Waters.

Evercore acted as financial advisor to DS Waters, and Proskauer Rose LLP was the company’s legal advisor.  Barclays and Jefferies LLC acted as M&A advisors to Crestview Partners, and Paul, Weiss, Rifkind, Wharton & Garrison LLP was the legal advisor.

© 2013 PEPD • Private Equity’s Leading News Magazine • 9-4-13

Fortress Investment Group Acquires Dow Jones Local Media Group

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News Corp has sold the Dow Jones Local Media Group, which operates 33 publications, including 8 daily and 15 weekly newspapers, to Fortress Investment Group.

The Dow Jones Local Media Group daily newspaper franchises include the Times Herald-Record (Middletown, NY); Cape Cod Times (Hyannis, MA); The Record (Stockton, CA); The Standard-Times (New Bedford, MA); The Pocono Record (Stroudsburg, PA); The Herald (Portsmouth, NH); The Mail Tribune (Medford, OR), and The Daily Tidings (Ashland, OR).  In addition to daily and weekly newspapers, the Dow Jones Local Media Group operates other print and online community media, including web sites, magazines as well as news and advertising niche publications. Then group is based in Middletown, NY (www.dowjoneslmg.com).

“These newspapers share a strong tradition of service in their communities and a highly talented staff,” said Robert Thomson, Chief Executive of News Corp. “We are confident that the papers will prosper under the new owners, but they were not strategically consistent with the emerging portfolio of the new News.”

The Dow Jones Local Media Group operations will be managed by GateHouse Media, one of the largest publishers of locally based print and online media in the United States with a portfolio of products that includes over 400 community publications and approximately 350 related websites.

Fortress Investment Group is a global investment firm with over $53 billion in assets under management. Fortress manages assets on behalf of over 1,400 institutional clients and private investors worldwide across a range of investment strategies — private equity, credit, liquid hedge funds and traditional fixed income. The firm was founded in 1998 and is based in New York (www.fortress.com).

Waller Capital Partners, an independent investment bank focused on the telecommunications, media and technology sectors, advised Dow Jones on the sale of the Local Media Group.

© 2013 PEPD • Private Equity’s Leading News Magazine • 9-4-13

Triton Pacific Capital Partners Sells Alegis Care to Cigna

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Triton Pacific Capital Partners has sold its portfolio company Alegis Care to Cigna.  During Triton Pacific’s ownership period, Alegis Care increased in value by more than 2.6 times.

Alegis Care (previously known as Home Physicians) is a Chicago-based Chronic Care Management, Health Risk Assessment and Medicare Fee for Service organization that was acquired by Triton Pacific in March of 2006. Focused on providing comfortable in-home care for chronically ill and elderly patients, Alegis Care’s services are particularly timely with respect to the Affordable Care Act (www.alegiscare.com).

“We are pleased to have Cigna recognize the value created in Alegis Care. We achieved our strategic positioning of the company to capitalize on the Affordable Care Act’s stated goal of combining cost containment with quality of care,” said Craig Faggen, CEO of Triton Pacific. “Cigna is in an excellent position to build and guide Alegis Care through the next phase of growth.”

Triton Pacific Capital Partners acquires controlling interests in profitable entrepreneurial companies.  The firm seeks to partner with management of established, profitable companies that have compelling, differentiated business propositions.  Triton Pacific currently maintains a controlling investment in 16 private equity companies with an enterprise value in excess of $170 million.  The firm was founded in 2001 and is headquartered in Los Angeles, CA, (www.tritonpacific.com).

Raymond James Financial served as exclusive financial advisor to Alegis Care.

© 2013 PEPD • Private Equity’s Leading News Magazine • 9-4-13

GSO Capital Partners Closes Fund II at $5 Billion

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GSO Capital Partners (GSO), the credit division of Blackstone, has held a final closing of its second capital solutions fund, GSO Capital Solutions Fund II LP (the “Fund”), with total commitments of $5 billion, an increase of over 50% from GSO’s first capital solutions fund raised in 2010.

GSO received strong support from both existing and new investors, with demand well surpassing the Fund’s $5 billion hard cap. Investors in the Fund include a group of US state pension funds, corporate pension funds, sovereign wealth funds, insurance companies, endowments, foundations and family offices.

This is GSO’s second fund to provide “rescue financing” to distressed companies facing liquidity issues, including pending debt maturities, covenant violations, liquidity shortfalls and cyclical challenges, needing capital to avoid imminent bankruptcy, or seeking assistance in their exit from bankruptcy. GSO has deployed over $4 billion in the strategy to date across a broad range of sectors and geographies, with a focus on North America and Western Europe.

“We are very appreciative of the significant investor demand for our second capital solutions fund. A fund of this size uniquely positions GSO as one of few firms that can provide companies in the U.S. and Europe with large commitments to solve their balance sheet and liquidity challenges,” said Tripp Smith, Co-Founder of GSO.

Blackstone is one of the world’s leading investment and advisory firms. The firm’s alternative asset management businesses include the management of private equity funds, real estate funds, hedge fund solutions, credit-focused funds and closed-end funds. Blackstone also provides various financial advisory services, including financial and strategic advisory, restructuring and reorganization advisory and fund placement services. Blackstone is based in New York (www.blackstone.com).

GSO, a division of Blackstone, is a credit-focused alternative asset manager, with approximately $62 billion of assets under management as of June 30, 2013. GSO has a global footprint with approximately 235 professionals among its offices in New York, Dublin, London and Houston (www.blackstone.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 9-4-13

New Private Equity Firm Scronce & Associates Formed in Winston Salem

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A new private equity firm has been formed to invest in small to mid-size privately owned entrepreneurial companies located in the southeast United States with revenues from $1 million to $15 million that are in transition and need both financial and business support.

The new firm is called Scronce and Associates and was founded by Tim Scronce.  “With revenues in this range, many banks and private equity companies are reluctant to provide capital due to size or insufficient assets to raise debt,” said Mr. Scronce.  “In today’s uncertain economic environment, banks have tightened their lending criteria and many private equity firms will only invest in larger ventures.”

According to Mr. Scronce, companies experience several critical phases in their life cycle. Scronce and Associates focuses on supporting businesses during the small to mid-size transition. Entrepreneurs who have built businesses know there is that unique moment in the growth of a company where it becomes too small to be big and too big to be small. This phase can often be “make or break” for business owners due to a number of challenges occurring simultaneously when a company may not have the resources to advance to the next level. Business owners may have an idea in mind of where they want to take their company, but lack adequate direction and capital to get there.

Through a combination of small business financing and advising, the Scronce and Associates team enables previously undiscovered companies to get where they want to go without tying on the risk that can often be a part of that process.

“At Scronce and Associates, we are not interested in participating in the day-to-day operations of businesses. Rather, we work with current management to refine the existing business strategy and create actionable, realistic plans to help small business owners to build upon best practices and develop a blueprint for the future,” said Mr. Scronce.

Prior to forming Scronce and Associates, Mr. Scronce worked in several private and public businesses of all sizes. Scronce and Associates is headquartered in Winston Salem, NC (www.scronceandassociates.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 9-4-13

Karl Knapp to Join Blackstone Advisory Partners

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Blackstone Advisory Partners has hired Karl Knapp as a new Senior Managing Director based in New York.  Mr. Knapp will head up the Group’s Global Industrials practice. He brings to Blackstone his extensive expertise, particularly in the paper and packaging, building products and diversified industrials sectors.

Mr. Knapp brings over 20 years of dedicated industry experience, most recently as the Head of the Global Industrials Group at UBS and a Vice Chairman of UBS’ Investment Banking Division. Transactions led by Mr. Knapp include: advising Anglo-American Corporation on its $8 billion demerger of its paper and packaging subsidiary, Mondi; Stora-Enso on the sale of its North American Papers Division for $2.5 billion; International Paper on its $4.3 billion acquisition of Temple-Inland; and, most recently, advising Koch Industries’ Georgia-Pacific division on its $1.5 billion acquisition of Buckeye Technologies.

Mr. Knapp started his career at Donaldson, Lufkin and Jenrette and E. F. Hutton and Company, and worked as a senior banker at Morgan Stanley until 2002, when he joined UBS Investment Bank. He holds an MBA from Harvard Business School and an MA from Oxford University, where he was a Rhodes Scholar.

“Karl’s long experience and track record advising CEOs, companies and Boards will enable Blackstone’s Advisory practice to operate at another level within the industrial space; his strong industry knowledge in the areas of paper and packaging, building products and diversifieds will also allow us to make further inroads in these important industrial sectors,” said John Studzinski, Global Head of Blackstone Advisory Partners.  “There is no question that Karl’s addition will make a material impact on our commercial and strategic platform.”

“I am delighted to join Blackstone, a firm with an unparalleled reputation for providing objective and differentiated advice to its clients on their most complex strategic assignments. I look forward to working with the talented team at Blackstone Advisory Partners and helping the group grow its industrials practice in the years ahead,” said Mr. Knapp.

Blackstone is one of the world’s leading investment and advisory firms. The firm’s alternative asset management businesses include the management of private equity funds, real estate funds, hedge fund solutions, credit-focused funds and closed-end funds. Blackstone also provides various financial advisory services, including financial and strategic advisory, restructuring and reorganization advisory and fund placement services. Blackstone is based in New York (www.blackstone.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 9-4-13