Archives for September 27, 2013

Catterton Partners Invests in PIADA Italian Street Food

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Catterton Partners has made an investment in PIADA Italian Street Food, a fast-casual Italian eatery.  Catterton’s investment will be used to continue growing the PIADA concept across the country.  PIADA Italian Street Food has 14 locations across the Midwest, with 6 planned to open by the end of 2013.

PIADA is a fast-casual, authentic Italian eatery that serves made to order Piadas (an Italian thin crust dough, baked on a stone grill, then hand rolled with fresh authentic ingredients), Pasta Bowls and Chopped Salads. PIADA restaurants feature a modern Italian design with white Carrara marble, fumed white oak furniture, LED lighting and stained concrete floors. The company was founded by Chris Doody, who co-founded the BRAVO BRIO Restaurant Group in 1992.  PIADA is based in Columbus, OH (www.mypiada.com).

“We are excited to enter into this strategic partnership with Catterton, which has extensive expertise in developing restaurants and expanding brands,” said Mr. Doody.  “We are confident that PIADA’s fresh ingredients, innovative menu and customizable options will translate well to new markets throughout the US and beyond.  With Catterton’s support, we look forward to the continued evolution of our growth strategy as we pursue our goal of building the leading fast-casual Italian restaurant company in the country.”

Catterton Partners focuses exclusively on the consumer industry and invests in all major segments including food and beverage; retail and restaurants; consumer products and services; and media and marketing services. Catterton was founded in 1989 and has more than $4 billion in capital under management. The firm is located in Greenwich, CT (www.cpequity.com).

“We believe PIADA will be one of the great success stories in fast-casual dining,” said Scott Dahnke, Co-Managing Partner of Catterton Partners.  “PIADA is the leading player in the Italian fast-casual space and fits squarely within our investment strategy of finding top companies in great categories.  We have a long history of partnering with exceptionally well positioned restaurant concepts such as Noodles & Company, Mendocino Farms, P.F. Chang’s, Baja Fresh, Bloomin’ Brands, Primanti Brothers, Cheddar’s, and First Watch, and believe that our extensive experience makes Catterton the ideal partner for PIADA.”

PIADA was advised by Piper Jaffray & Co. and its legal counsel was Kegler, Brown, Hill & Ritter.  Catterton was represented by Finn Dixon & Herling.

© 2013 PEPD • Private Equity’s Leading News Magazine • 9-27-13

The Carlyle Group Invests in Beats Electronics

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The Carlyle Group has agreed to make a minority investment in Beats Electronics, the audio brand co-founded by artist and producer Dr. Dre.  Beats will use a portion of the Carlyle investment to reacquire the minority stake in Beats held by HTC Corp. As a result, HTC will no longer have any ownership stake in Beats.

Beats Electronics is the parent company of the Beats by Dr. Dre line of high-quality headphones and speakers, as well as Beats Audio HD-sound systems. The company’s mission is to build quality music experiences for all elements of the digital music ecosystem–including headphones, devices and services–so that fans can hear music the way artists intended it to sound in the studio. This includes partnerships with computer manufacturer HP and automotive manufacturer Chrysler Group. The company was founded in 2008 and is based in Santa Monica, CA (www.beatsbydre.com).

“These transactions represent the evolution of the financial strength and significant growth prospects of Beats. Carlyle is a fantastic investment partner and we look forward to building the next chapter of Beats,” said Beats Co-Founder and Chief Executive Officer Jimmy Lovine.

Carlyle will work with the Beats management team to continue expanding the brand and building the business both domestically and internationally.

“We are confident that Beats will continue to drive innovation and growth in the premium audio accessory market, particularly as the proliferation of smart phones and tablets stimulate increased consumption of digital media. Carlyle has a strong history of helping great brands expand globally, and we are thrilled to partner with Jimmy Lovine, Dr. Dre and their talented management and product teams,” said Carlyle Managing Director and Head of Consumer and Retail Sandra Horbach.

Equity for Carlyle’s investment in Beats will come from affiliates of Carlyle Partners V, Carlyle’s $13.7 billion U.S. Buyout fund.

The Carlyle Group invests in buyouts, growth capital, real estate and leveraged finance in Africa, Asia, Australia, Europe, North America and South America focusing on aerospace & defense, automotive & transportation, consumer & retail, energy & power, financial services, healthcare, industrial, infrastructure, technology & business services and telecommunications & media. The Carlyle Group employs 1,400 people in 34 offices across six continents and is based in Washington, DC (www.carlyle.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 9-27-13

Generation Partners Invests in Captivate Network

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Gannett Co. has agreed to partner with Generation Partners to fund the continued growth and expansion of the Captivate Network, which will be spun out into a separate company co-owned by Gannett and Generation.

Captivate Network is a digital media company that operates an IP-enabled digital place-based media network with over 10,000 office elevator displays across more than 1,000 commercial office buildings in the US and Canada. The company was founded in 1997 and acquired by Gannet in 2004.  Captivate Network is headquartered in Chelmsford, MA (near Boston) with additional offices in New York, Chicago, Los Angeles, and Toronto (www.captivate.com).

“Captivate is one of the most established brands in the digital place-based industry, with the largest network in North America to reach a highly desirable consumer demographic in a captive office environment,” said Andrew Hertzmark, managing partner of Generation Partners. “The company has strong, long-term relationships with both advertisers and property owners and our goal through this partnership is to continue to build on Captivate’s 16-year history of providing a valuable experience for viewers, building owners and advertising customers.”

Captivate also announced that Marc Kidd has been named Chief Executive Officer. Mr. Kidd is a marketing, media and entertainment executive who has been on the forefront developing communications platforms to connect branded content with clients wanting to engage their consumers. Having started his career at Host Communications in the early 1980s, Mr. Kidd pioneered the corporate sponsorship business for college and high school sports.  In 2004, he joined Winnercomm, which was the leading provider of third-party produced content to ESPN. Mr. Kidd was named COO of Winnercomm in 2006 and became its President in 2007.  Outdoor Channel Holdings acquired Winnercomm in 2009, at which point Mr. Kidd became President, Media Sales of Outdoor Channel Holdings.  Outdoor Channel enjoyed record sales growth under Kidd’s leadership.

“It is an honor to be given the opportunity to lead Captivate,” said Mr. Kidd. “As a leader in the digital place-based media industry, Captivate is perfectly positioned to take advantage of the growing industry trend of reaching audiences on the go, on the path to purchase.  With over 10,000 screens reaching 5.6 million upscale professionals each month in both the U.S. and Canada, Captivate delivers a highly compelling value to advertisers seeking to target a very affluent, but difficult-to-reach, audience.  I am thrilled to partner with Generation, Gannett, and the entire Captivate management team and look forward to building on Captivate’s success.”

In addition, Mark Shapiro has been named Captivate’s Chairman and is an investor alongside Generation.  Mr. Shapiro has extensive experience and contacts in the advertising, television, sports and entertainment industries and also has a strong track record in the digital place-based media industry. Mr. Shapiro was most recently the CEO of Dick Clark Productions (“DCP”), an entertainment and production company that produced the Golden Globes, the American Music Awards, the Academy of Country Music Awards and many other hit shows.  DCP was sold in 2012 for over $370 million, more than double the acquisition price just four years earlier. Prior to Dick Clark Productions, Mr. Shapiro was the CEO of Six Flags after a highly successful career at ESPN, where he was the Executive Vice President of Programming and Production responsible for the development, acquisition and scheduling of all programming.

“The idea of contributing to a company at the epicenter of content, technology, eyeballs and advertising is extremely appealing and very exciting,” said Mr. Shapiro.  “Partnering on this opportunity with Generation and Marc Kidd, both of whom I have known for nearly a decade, combined with the strength and track record of Gannett, provides Captivate with outstanding strategic, financial and execution resources.”

Generation Partners is a private equity firm with over $350 million of capital under management.  Generation provides equity capital to growth companies and pursues both majority and minority investments.  Over the past 25 years, the firm’s principals have invested in more than 50 companies in three primary industry groups: Media & Communications; Healthcare Services & Software; and Business & Information Services.  Generation has offices in Greenwich, CT, Los Angeles, CA, and Austin, TX (www.generation.com).

Gannett (NYSE: GCI) is an international media and marketing services company that informs and engages more than 100 million people every month through its network of broadcast, digital, mobile and publishing properties. The company is based in McLean, VA (www.gannett.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 9-27-13

Arbor Investments Exits Trudeau Foods

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United Natural Foods has entered into an agreement to acquire Trudeau Foods, a portfolio company of Arbor Investments.

Trudeau Foods is the largest Minnesota-based distributor of natural, organic and specialty food products.  Trudeau Foods serves over 600 customer locations, including chain and independent grocers, wholesalers and meat markets in Minnesota, North Dakota, Wisconsin and Michigan’s Upper Peninsula. Trudeau Foods carries a full range of specialty gourmet meats, frozen foods, dairy, bakery, deli, seafood and dry grocery items under national, regional and private label brands. The company is based in Burnsville, MN (near Minneapolis) (www.trudeaudistributing.com).

“This acquisition is the latest step in our strategy to grow our market share and deliver a complete basket of specialty, natural and organic products to our customers,” said Steve Spinner, UNFI’s President and Chief Executive Officer. “We are excited to welcome Trudeau Foods to our organization. Both companies have a tremendous history of commitment to servicing their customers, and we are enthusiastic about the growth prospects for this market.”

United Natural Foods (NASDAQ: UNFI) carries and distributes more than 65,000 products to more than 27,000 customer locations throughout the United States and Canada. The company serves a variety of retail formats including conventional supermarket chains, natural product superstores, independent retail operators and the food service channel. The company is based in Providence, RI (www.unfi.com).

Arbor invests in the food, beverage and related industries. The firm has acquired or invested in over 32 food and beverage companies in North America and currently has $600 million of assets under management across three funds. Arbor was founded in 1999 and is based in Chicago (www.arborpic.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 9-27-13

Parallax Capital Partners and Stepstone Group Acquire IdenTrust

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Parallax Capital Partners and StepStone Group have acquired a majority interest in IdenTrust, a security and identity software and services provider.  This is Parallax’s second acquisition in the identity and access management sector in the past several months.

IdenTrust enables organizations to secure applications and networks, streamline electronic workflows, and provide online fraud protection and regulatory compliance by using a single digital identity that can authenticate, encrypt, and create electronic signatures for every type of transaction or activity where identity is a necessary component.  IdenTrust digital certificates are deployed across 60 nations worldwide. IdenTrust is the largest provider of digital identities for the Department of Defense’s External Certificate Authority program, and the General Service Administration’s program and provides identity management solutions for ten of the world’s largest financial institutions. In the UK, IdenTrust digital certificates secure more than 6 billion payment transactions annually, with an aggregate value exceeding $7 trillion. IdenTrust is based in San Francisco (www.IdenTrust.com).

“IdenTrust’s experience and expertise in providing identity management for many of the world’s largest banks, its role as a major identity provider to the US Federal and State Governments, and its growing emergence as an identity solution for the corporate sector make it the perfect company for us to invest in.  We see significant potential in building upon the company’s infrastructure, management strengths and its ability to provide interoperability across borders, industry delineations, and application silos,” said John Baldwin, Partner at Parallax.

Parallax Capital Partners invests in software and computer related technology companies that have annual revenues between $5 million and $100 million and that are based in the US, Canada, Europe and Asia-Pacific.  Parallax has acquired over 16 companies since its inception. The firm is headquartered in Laguna Hills, CA (www.parallaxcap.com).

StepStone provides investment services to institutional investors through a combination of private equity fund investments, co-investments and secondary purchases.  The firm oversees more than $55 billion of private equity allocations and has offices in San Diego, New York, Beijing, and London (www.stepstonellc.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 9-27-13

Egis Capital Partners Adds Bill Polk as Managing Partner

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Egis Capital Partners has hired Bill Polk as a new Managing Partner.  Mr. Polk has more than 25 years of debt and equity investment experience and has been involved in more than $6 billion of middle-market security financing transactions. He will be responsible for origination and fundraising at Egis.

Prior to joining Egis Capital Partners, Mr. Polk served as Managing Director of the Security, Defense, and Technology Finance practice at Capital One where he and his team provided financing to companies who protect life, property, and information serving the commercial, residential, and government security markets. Particular areas of Mr. Polk’s focus include physical security products and services, information security, public safety and corrections, the national intelligence contracting community, and the federal, state and local homeland security marketplace.  Prior to joining Capital One, Mr. Polk served as Managing Director of CapitalSource Finance’s Security Lending Group and served on CapitalSource’s Executive Committee. Before his tenure at CapitalSource, Mr. Polk was a co-founder and President of SLP Capital, a specialty finance company focused on security industry lending which was acquired by CapitalSource in 2004.  He holds a Bachelor of Arts degree from the University of Virginia and a Master in Business Administration degree from Harvard University.

“Bill is a rare individual who has significant capabilities in business strategy and M&A — and a deep understanding of the security industry.  His breadth of skills, experience and insight will be extremely valuable in helping our firm achieve superior returns,” said Robert Chefitz, Managing Partner of Egis.  “I also know that Bill and his colleagues at Capital One have been incredibly active in the security space over the past two years and we look forward to working closely with them as we target new opportunities.”

Egis Capital Partners is focused on middle-market buyout and late-stage growth investments in the security & homeland defense sector. Egis targets companies primarily located in North America with enterprise values ranging between $30 million and $200 million that require a total investment between $10 million and $40 million. Egis Capital Partners was founded by Robert Chefitz in 2007.  The firm is based in New York (www.egiscapitalpartners.com).

“The global security business is now a $250 billion industry being shaped by very powerful market forces.  In certain respects, the industry today is almost unrecognizable from the one I entered more than 20 years ago,” said Mr. Polk.  “The developments that have taken place the past eight to 10 years have opened up immense opportunities for firms like Egis.  I am thrilled to be joining Robert and starting this new chapter in my investment career.”

© 2013 PEPD • Private Equity’s Leading News Magazine • 9-27-13

Global Automotive M&A Deal Value Increasing

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Global automotive industry merger and acquisition deal values increased 24 percent in the first half of 2013 to $13.1 billion total, compared to the same period in 2012, according to PwC’s Automotive M&A Insights: Mid-Year Report 2013. Financial buyers made significant investments in the automotive sector, with $6.8 billion in deals closed during the first half of 2013—the highest share of deal value injected by financial buyers in the past five years.

However, automotive deal activity continued to slow down over the past two comparable periods. In the first half of 2013, 222 deals closed with a disclosed deal value totaling $13.1 billion, compared to 264 deals closed with a disclosed value of $10.6 billion during the first half of 2012, reflecting a 16 percent decline in volume. In the first half of 2011, there were 303 completed deals with a disclosed value of $18.8 billion, representing a 13 percent decline in volume year-over-year as compared to the first half of 2012.

“Global Automotive M&A is poised for future growth,” said Paul Elie, PwC’s U.S. automotive transaction services leader.  “As Europe and developing markets recover, we anticipate that the number of M&A deals will increase.  And as auto companies compete to introduce the latest innovative vehicles, we expect that investment in new technologies will likely emerge as a primary growth driver.”

Globally, the average disclosed deal size during the first half of 2013 increased to $171 million, representing a 72 percent increase over the first half of 2012.  The average deal size is more in line with pre-recessionary investment levels.  Small and mid-size deals continue to dominate the global automotive M&A landscape.  Only two mega-deals valued at less than $1 billion were transacted during the first half of 2013, which is consistent with the average seen in the past three comparative periods.

PwC continues to maintain a positive outlook for automotive M&A, a projection primarily driven by the underlying optimistic view of global automotive sales.  To meet this level of demand, assembly is expected to add nearly 24 million units between 2013 and 2019, for a compound annual growth rate of 4.35 percent.

Here are the key factors that will likely jump start automotive M&A growth:

  • High levels of liquidity on corporate balance sheets
  • Strategic initiatives to expand market share and grow customer, technological and product portfolios
  • Resolution of sovereign debt issues in European Union member states
  • Strong economic recovery and pent-up demand in developed countries such as the U.S.
  • Resumption of trend line economic growth in China and India

Europe
With the abundance of distressed suppliers in the region, consolidation of M&A activity increased in the first half of the year, marking the reversal of Europe’s declining M&A activity over the past three periods. European assets maintained their position as the largest share of targets; however, European acquirers played the smallest role in cross-border activity, transacting only seven deals in the first half of 2013.

North America
North America was the second largest target region during the first half of 2013.  The region transacted 50 percent more deals with cross-border acquirers in the first half of 2013, compared to the first half of 2012.  Localization of vehicle assembly within North America is a trend that is likely to drive an increase in activity.  The exportation of vehicle production is primarily being driven by foreign OEMs that are looking to reduce the risk of currency volatility and European manufacturers that are seeking a more stable and growing environment.

Asia
Asia transacted the largest volume and value of outbound deals in the first half of 2013, with approximately 70 percent in European assets.  However, Asia experienced the largest drop in its share of volume during the first half of 2013.  The decrease in share of target deal volume, which fell from 32 percent in 2012 to 23 percent in the first half of 2013, is primarily being driven by slowed activity in transactions with Asian vehicle manufacturers.

For more details, download PwC’s Automotive M&A insights: Mid-year report by clicking HERE.

© 2013 PEPD • Private Equity’s Leading News Magazine • 9-27-13