Archives for October 3, 2013

H.I.G. Capital Exits Lucas Group

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H.I.G. Capital has sold its portfolio company Lucas Group, a mid-management recruitment firm, to Orchard Holdings Group.

Lucas Group is the nation’s largest mid-management recruitment firm, with supporting business lines in military transition and contract staffing. The company comprises 14 offices nationwide and over 325 associates focused on placing mid-management professionals into positions at small-to-medium enterprises as well as large institutions. The company was founded in 1970 and is headquartered in Atlanta (www.lucasgroup.com).

Orchard Holdings Group is a private investment firm that invests non-institutional, private, family capital in businesses with $25 million to $250 million in revenue. The firm typically invests $10 million to $40 million of capital per transaction. Orchard Holdings is based in Cincinnati (www.orchardholdings.com).

“Orchard’s primary objective is to partner with exceptional management teams and build durable, successful businesses. Lucas Group represents exactly that kind of opportunity,” said Pete Boylan, Co-Founder and Managing Director of Orchard Holdings. “Under its current leadership and strategy, Lucas Group has the capacity to continue to expand its business and gain market share in the outsourced human resources services industry. We are excited about our new partnership with this impressive team.”

“Orchard truly reflects our shared approach to business,” said Andi Jennings, President and CEO of Lucas Group. “A high-integrity investment group, they will provide the financial foundation for Lucas Group’s enduring success with honesty, responsibility and a genuine commitment to partnership. We are thrilled to embark on this exciting journey with Orchard.”

Investment bank Livingstone acted as the exclusive financial advisor to Lucas Group and H.I.G. “We are proud to have represented Lucas Group and H.I.G. on this private equity exit and to post another successful sale to a financial buyer for an important client. Adding H.I.G. to our growing list of satisfied private equity clients is a tremendous addition to Livingstone’s resume,” said Livingstone Partner Steve Miles.

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).

© 2013 PEPD • Private Equity’s Leading News Magazine • 10-3-13

Baird Capital Invests in Duet Health

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Duet Health, a provider of mobile healthcare communications, has received an investment from Baird Capital.

Duet Health is a mobile healthcare communications company that provides information to patients during the course of care. Duet Health’s clients include OhioHealth, Cardinal Health, Nationwide Children’s Hospital, and the Center for Disease Control. The company was founded in 2009 by Jeff and Ivan Harper and is based in Columbus, OH (www.duethealth.com).

“The role technology is playing in changing healthcare is enormous and is evolving more quickly than anyone could have predicted. This partnership with Baird Capital will enable us to continue to innovate and rapidly expand as the need for new software and new deliveries for greater success in outcomes and operational efficiency are still in their infancy,” said Jeff Harper, co-founder of Duet Health.

Baird Capital, the direct private investment arm of Robert W. Baird & Co., invests in lower middle-market companies in the manufactured products, healthcare and business services sectors. The firm invests from $15 million to $35 million in companies with enterprise values of $25 million to $125 million and EBITDAs greater than $5 million. Baird Capital was founded in 1989 and is based in Chicago (www.bairdcapital.com).

“Duet is changing the face of communications in the healthcare industry with unique technology which delivers new ways for healthcare providers to educate, engage and communicate with patients. This is a tremendous opportunity for Duet Health. They are providing state of the art healthcare solutions and Baird’s investment will help accelerate their growth to become a national force in the industry,” said Bill O’Donnell, Board Member, Duet Health.

© 2013 PEPD • Private Equity’s Leading News Magazine • 10-3-13

Platte River Exits Global X-Ray & Testing

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Platte River Equity has sold its portfolio company, Global X-Ray & Testing Corporation, to Intertek Group.

Global X-Ray is a provider of non-destructive testing and mechanical integrity services to the offshore oil and gas and midstream industries. The company is based in Morgan City, LA (www.globalxray.com).

“We have had a great relationship with Global X-Ray,” said Platte River Managing Director Peter Calamari. “Under the leadership of Chris Moreau and his team, the company successfully entered new end markets, expanded its service offering and opened new locations. In this environment of strong demand for energy infrastructure and increasing regulatory requirements, Global X-Ray is poised for continued success. We are pleased that the company will be owned by Intertek, a strong and supportive new partner for Global X-Ray and its employees.”

Intertek Group (London Stock Exchange: ITRK) is a multinational inspection, product testing and certification company headquartered in London, UK. The company operates a network of more than 1,000 laboratories and offices and employs more than 36,000 people in 100 countries (www.intertek.com).

Platte River Equity makes equity investments of $10 million to $50 million in lower middle market companies with enterprise values generally between $20 million and $250 million. The firm focuses on investing in the aerospace and transportation; energy and industrial services; and chemicals, metals and industrial minerals sectors. Platte River Equity manages funds with committed capital of approximately $700 million and is based in Denver (www.platteriverequity.com).

“We have benefitted tremendously from the strategic and financial support Platte River has provided. We were able to focus our innovation and technical expertise on an expanded geographic region and customer base, and Platte River was a critical partner in our success. We look forward to a new chapter of continued growth with Intertek,” said Chris Moreau, CEO of Global X-Ray.

© 2013 PEPD • Private Equity’s Leading News Magazine • 10-3-13

Catterton Partners Invests in Protein Bar

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Protein Bar, a health themed fast-casual restaurant chain has received an investment by Catterton Partners. The investment will be used to expand the Protein Bar concept to new geographies.

Protein Bar is a fast-casual restaurant chain specializing in healthy, on-the-go options. Its mission is to change the way people eat on the go, with a focus on doing healthy healthier. This means the menu, service, and stores are focused on healthy food served up in a quick, engaging way for active, on-the-go customers. Protein Bar currently has 12 restaurants in Chicago and Washington, DC and recently announced expansion to the Denver market. The company was founded in 2009 by Matt Matros and is based in Chicago (www.theproteinbar.com).

“We are excited about our investment in Protein Bar, a truly unique concept which capitalizes on two major restaurant trends: great tasting food and healthy, on-the-go options, all at an attractive price point,” said Scott Dahnke, Co-Managing Partner of Catterton Partners. “With Catterton’s significant experience in helping to grow differentiated restaurant concepts and health conscious brands, we believe Protein Bar is a perfect fit for the type of value we bring to our investments.”

In 2013, Protein Bar was named one of Nation’s Restaurant News’ Top 50 Breakout Brands and was the winner of the Inaugural James Tyree Emerging Business Leadership Award. Founder Matt Matros was an Ernst & Young Entrepreneur of the Year Finalist in 2013 as well as one of Crain’s Chicago Business’ “40 Under 40” in 2012.

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 are delighted to partner with Catterton, the leading private equity firm in consumer investing. We believe our concept, which is focused on providing on-the-go customers with healthy options that boast great quality and flavor, is primed for growth,” said Mr. Matros. “Catterton has an excellent track record of working with market-leading restaurant concepts such as Noodles & Company, Outback Steakhouse, Mendocino Farms, First Watch and P.F. Chang’s, as well as expertise helping to grow health conscious brands such as Core Power Yoga, Plum Organics, O.N.E. coconut water and Van’s Natural Foods. As the leading healthy fast-casual brand, we are thrilled to be partnering with the leading consumer-focused private equity firm.”

© 2013 PEPD • Private Equity’s Leading News Magazine • 10-3-13

Gladstone Acquires Alloy Die Casting

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Gladstone Investment Corporation has invested $16.3 million in a combination of debt and equity to purchase Alloy Die Casting Co. Gladstone Investment’s affiliated company, Gladstone Capital Corporation, participated as a co-investor by providing $7.0 million of debt and equity financing on the same terms as Gladstone Investment.

Alloy Die Casting Co. (ADC) is a manufacturer of finished aluminum and zinc castings for aerospace, defense, aftermarket automotive and industrial applications. ADC provides its customers with engineering support and custom tool design and fabrication as well as in-house machining and finishing capabilities. The company was founded in 1946 and is headquartered in Buena Park, CA (www.alloydie.com).

“Gladstone Investment is excited to partner with ADC’s talented and experienced management team. We look forward to the continued growth of the business and building upon the success of the management team over the past few years,” said Greg Bowie, a Director, Private Finance, of Gladstone Management Corporation, Gladstone Investment’s affiliated investment adviser.

Gladstone Investment Corporation (NASDAQ: GAIN) is a publicly-traded business development company that makes debt and equity investments in US-based small to middle-market businesses. Target investments generally range from $5 million to $30 million in companies with over $3 million in EBITDA. Sectors of interest include light and specialty manufacturing, industrial products, business and government services, media and communications, consumer products and services, healthcare services, transportation, specialty chemicals and energy services. Gladstone is based in McLean, VA with additional offices in New York, Chicago, and Los Angeles (www.GladstoneInvestment.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 10-3-13

Private Equity Leads the Way in Pension Plan Returns

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Rising equity values in the US and international markets has lifted the funded status of typical US corporate pension plans 2.9 percentage points to 91 percent in September, the first time they have topped that level since June 2011, according to the BNY Mellon Investment Strategy & Solutions Group (ISSG).

For September, the rise in equities contributed to a 3.1 percent increase in assets for the typical US corporate pension plan.

Private equity, which comprises 10 percent of the typical public defined benefit plan, was one of the best performing asset classes in September, returning 9 percent.

“Rising above a funded status level of 90 percent is important to many corporate pension plans as they are more likely to implement strategies that can lower a plan’s exposure to market volatility,” said Jeffrey Saef, managing director, BNY Mellon Investment Management, and head of the ISSG. “The recent equity market returns are helping corporations outperform their liabilities.”

On the public side, the typical defined benefit plan in September posted a 3.4 percent excess return over its annualized 7.5 percent return target. Public plan assets must earn at least 0.6 percent each month to keep pace with the 7.5 percent annual target. For the month, assets of the typical public plan outperformed those of corporate pension plans and foundations and endowments as a result of the public plan allocations to private equity. Year to date, public plan assets are ahead of the return target by 3.8 percent.

For endowments and foundations, the net return over spending and inflation was 2.6 percent as plan assets increased 3.3 percent. Over the past 12 months, plan assets are up 10.7 percent beating the spending and inflation target by 4.4 percent.

© 2013 PEPD • Private Equity’s Leading News Magazine • 10-3-13

Doug Pace Promoted to Associate at Pharos

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Pharos Capital Group has promoted Doug Pace to Associate from Senior Financial Analyst. Mr. Pace works in the firm’s Nashville office.

“Doug has already contributed greatly to our firm’s success over the last year and we are pleased to be able to recognize his talent and hard work. We are proud to be able to recruit and retain top caliber young people here at Pharos,” said Michael Devlin, Co-founder and Partner at Pharos Capital.

Mr. Pace will continue to provide due diligence and deal team support and will assist in the monitoring of select portfolio companies. He joined Pharos as a Senior Financial Analyst in 2012 after working as an Analyst for two years at Edgeview Partners. Prior to joining Edgeview, he completed internships with the Riverside Company and with Western Reserve Partners. Mr. Pace graduated from Oberlin College and the Oberlin Conservatory of Music with a BA in Neuroscience with a minor in Psychology and a BM in Music Performance.

Pharos Capital Group invests $10 to $30 million in companies seeking later stage funding for internal growth, acquisitions, management buyouts or recapitalizations. The firm invests across many sectors but has a particular interest in healthcare and business services. Pharos Capital Group has offices in Dallas and Nashville (www.pharosfunds.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 10-3-13