Archives for November 13, 2013

KKR to Acquire Brickman from Leonard Green

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KKR has reached an agreement to acquire The Brickman Group, a portfolio company of Leonard Green & Partners, for $1.6 billion. Leonard Green acquired a controlling interest in Brickman in January 2007 for approximately $850 million. CIVC Partners is also a shareholder of Brickman having invested in the company in 1998 and 2002.

The Brickman Group is a provider of commercial landscape maintenance services. Brickman operates through a network of branches, providing landscape maintenance, snow removal and landscape design/build services to over 10,000 clients. Brickman serves a range of clients, including commercial real estate companies, professionally managed residential communities, Fortune 500 corporations and public and private institutions. The company is headquartered in Gaithersburg, MD (www.brickmangroup.com).

“Brickman is a leader in its industry, with an outstanding management team, a distinguished culture, talented and committed employees, and a track record of delivering high-quality services to its clients,” said Simon Brown, a Member of KKR and Head of Consumer Products. “We are excited to invest in the company and look forward to working closely with the Brickman leadership team to continue to build on the company’s market-leading position and grow the business over time.”

KKR makes private equity, fixed income and other investments in companies in North America, Europe, Asia and the Middle East. The firm has $83 billion in assets under management. In addition to its New York headquarters the firm has offices in Menlo Park, San Francisco, Houston, Washington DC, London, Paris, Hong Kong, Tokyo, Beijing, Mumbai, Dubai and Sydney (www.kkr.com).

The investment in Brickman is being made by KKR North American Fund XI and other funds and accounts managed by KKR. The transaction is expected to close by the end of 2013.

Barclays Capital and Morgan Stanley and Co. served as financial advisors to Brickman. Credit Suisse Securities (USA) served as financial advisor to KKR.

Leonard Green & Partners’ invests in middle-market companies with market-leading franchises and defensible competitive positions, attractive growth prospects and proven management teams. The firm’s investments are in the form of traditional buyouts, going-private transactions, recapitalizations, growth capital investments, corporate carve-outs and selective public equity and debt positions. Sectors of interest include retail, distribution, healthcare, aerospace/defense and consumer/business services. Leonard Green & Partners was established in 1989 and manages approximately $15 billion of equity capital. The firm is located in Los Angeles, CA (www.leonardgreen.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 11-12-13

Mason Wells to Acquire Medical Packaging Business

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Sealed Air Corporation has signed an agreement to sell its rigid medical packaging business to Mason Wells for $125 million. The transaction is expected to be completed in the fourth quarter of 2013.

Sealed Air’s rigid medical packaging business was formed from three previous acquisitions: Nelipak Holdings, Alga Plastics and ATE Costa Rica, which includes facilities in each of Ireland, the Netherlands, the United States and Costa Rica. Nelipak specializes in designing and producing thermoformed packaging for the medical and pharmaceutical market. Examples include medical packaging for orthopedic implants, pacemakers, surgery sets, catheters and diagnostic kits. The medical packaging business will have revenues in 2013 of approximately $100 million (www.sealedairmedical.com).

Sealed Air Corporation (NYSE:SEE) is a maker of packaging materials, systems and equipment. Brands include Bubble Wrap, Cryovac, Instapak, and Shanklin. The company was founded in 1960 by inventors Alfred Fielding and Marc Chavannes. Sealed Air had $7.6 billion of revenue in 2012. The company is headquartered in Elmwood Park, NJ (www.sealedair.com).

Mason Wells makes investments in Midwest-based companies with revenues of $25 million to $300 million and EBITDAs of at least $5 million. Sectors of interest include consumer packaged goods, packaging materials & converting, engineered products & services and outsourced business services. The firm was founded in 1982 and is based in Milwaukee (www.masonwells.com).

Mason Wells will acquire Sealed Air’s rigid medical packaging business through its third investment fund, Mason Wells Buyout Fund III, LP, a $525 million fund that was raised in 2010.

© 2013 PEPD • Private Equity’s Leading News Magazine • 11-12-13

Riverside Exits PROFITsystems

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The Riverside Company has exited its investment in PROFITsystems, a provider of software used in the retail furniture industry. Riverside first invested in PROFITsystems in 2006.

“Thanks to a lot of hard work by management and Riverside, PROFITsystems has become the clear leader in its niche with a deeply loyal customer base,” said Riverside Principal Brian Sauer. “PROFITsystems has been a success story with Riverside and the company is ready for more great things in the future.”

PROFITsystems is a provider of Windows-based software and other services used in the retail furniture industry. The company’s core product, PROFITprofessional, allows clients in the retail furniture industry to manage their accounting systems, financial reporting and planning, customer service, inventory, purchase orders, sales tickets and analysis, and other functions. PROFITsystems software is the most widely used retail furniture and hard goods software in the US and Canada. The company is based in Colorado Springs, CO (www.profitsystems.com).

During its ownership of PROFITsystems, The Riverside Company completed one add-on acquisition with the buy of Easy Chair Software (www.easychairsoftware.com) in January 2008.

“We’re really proud of what we accomplished working with the great management team at PROFITsystems,” said Riverside Managing Partner Loren Schlachet. “In the face of headwinds, we were able to keep the company healthy, develop new products, complete an add-on acquisition, and grow its customer base.”

Working with Mr. Schlachet and Mr. Sauer on the transaction for Riverside were Operating Partner Jeff Goodman, Associate Elaine Ho and Senior Financial Analyst Bryan Salisbury. Origination Principal Amy Margolis helped facilitate the sale for Riverside.

St. Charles Capital acted as exclusive financial advisor to Riverside, while BDO provided accounting and tax support and Jones Day provided legal counsel.

The Riverside Company is focused on the smaller end of the middle market and invests in businesses valued at up to $250 million (€200 million in Europe). Since 1988, the firm has invested in more than 320 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).

© 2013 PEPD • Private Equity’s Leading News Magazine • 11-12-13

Z Capital Ups Investment in Real Mex

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Z Capital Partners has acquired an equity stake of a non-strategic minority holder and increased its equity ownership of Real Mex Restaurants, a full service, casual dining Mexican restaurant chain. As a result of this transaction, Z Capital is now the largest shareholder of Real Mex.

Concurrent with this transaction, Real Mex has announced that James Zenni, Founder, President and Chief Executive Officer of Z Capital, has been named Chairman of the Real Mex Board of Directors.

“We are thrilled to become the largest shareholder of Real Mex,” said Mr. Zenni. “Since Charly Robinson was appointed as CEO, Real Mex has improved operations and efficiencies and the management team is laser focused on the current turnaround strategy to drive profitability and enhance customer relationships. We remain dedicated to supporting Real Mex and are confident that, with Charly and his talented management team, the company is positioned for future growth and success.”

Real Mex Restaurants is the largest full-service, casual dining Mexican restaurant chain operator in the United States with 121 company-owned and operated restaurants, as well as 14 franchised restaurants. Brands include El Torito Restaurants, Acapulco Mexican Restaurants, Chevys Fresh Mex Restaurants, El Torito Grill Restaurants, Las Brisas Restaurant in Laguna Beach, Sinigual Restaurant in New York City, Who Song and Larry’s in Vancouver, WA, and El Paso Cantina in Torrance, CA. The company’s Real Mex Foods division is a manufacturer of foodservice and private label products in addition to co-packing for other manufacturers. Real Mex is headquartered in Cypress, CA (www.realmexrestaurants.com).

“This is an exciting transaction for all of us at Real Mex,” said Charly Robinson, President and CEO of Real Mex. “Z Capital has been a dedicated partner since their initial investment in the company and is deeply committed to the company’s vision to revitalize the Real Mex brands. With the support of a seasoned financial sponsor we are continuing to develop our brands and expand into new markets.”

Z Capital makes control investments in middle-market distressed companies, operational turnarounds and special situations. The firm targets companies with an enterprise value of less than $1 billion or EBITDA of less than $100 million. Sectors of interest include consumer products, steel, steel processors, agricultural, gaming, leisure, real estate, manufacturing, specialty services and automotive. Z Capital Partners was formed by Mr. Zenni, the former President, co-owner and co-founder of Black Diamond Capital Management. Mr. Zenni co-managed the portfolios of Black Diamond from its inception in 1995 to approximately $9 billion in assets under management and divested his fifty percent equity ownership interest in Black Diamond in October 2006. Z Capital is based in Lake Forest, IL (near Chicago) and has an additional office in New York (www.zcap.net).

© 2013 PEPD • Private Equity’s Leading News Magazine • 11-12-13

Bregal Forms New Platform, Makes First Buy

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Bregal Partners has formed Aqua Terra Water Management to serve as an acquisition and organic growth platform providing water management and disposal services to onshore oilfield customers in North America.

Aqua Terra has made its first investment through the acquisition of Four Winds Energy Services, an operator of Class 1b and Class II water disposal facilities in Alberta, Canada. Four Winds is headquartered in Grande Prairie, Alberta (www.fourwindsmidstream.com).

Aqua Terra is actively seeking greenfield development opportunities and acquisitions in both the U.S. and Canada.

“Having spent a year studying the oilfield water management industry, traveling throughout the US and Canada to visit with a variety of industry players in a number of key producing basins, we are excited today to announce the formation of Aqua Terra and to embark on an aggressive growth plan to build a leading North American water management company that seeks to be best in class in safety and environmentally sound business practices,” said Scott Perekslis, Managing Partner and co-founder of Bregal Partners. “The growing use of hydrofracturing techniques to complete wells in emerging and unconventional light oil plays is creating increased demand for the handling of both frac water and water produced over the life of a well. Through Aqua Terra’s acquisition of Four Winds, we gain both an experienced management team led by Tom Johnston and a compelling entry point into the growing light oil plays of Western Canada.”

Bregal Partners invests from $25 million to $75 million of equity in companies operating in the consumer, food & retail, energy services and healthcare industries. Target investments generate $15 million to $75 million or more of EBITDA. Bregal Partners is based in New York (www.bregalpartners.com).

“Our partnership with Bregal places the Four Winds on a clear path to broaden our service offerings and to expand into new geographies via greenfield development and strategic acquisitions,” said Tom Johnston, President and co-owner of Four Winds. “Bregal’s financial acumen and resources are considerable and will help accelerate our growth initiatives. Moreover, it is important for us to work with a capital partner who knows our industry and understands its key drivers.”

Canaccord Genuity served as financial advisor to Bregal Partners on the acquisition of Four Winds Energy Services.

© 2013 PEPD • Private Equity’s Leading News Magazine • 11-12-13

Abacus Backs Latest Bunker Hill Acquisition

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Abacus Finance Group served as Administrative Agent and Sole Lead Arranger for $25 million in senior secured credit facilities to support the acquisition of Hubbardton Forge by Bunker Hill Capital.

Abacus was joined in the senior financing by Crescent Capital. Mezzanine financing for the transaction was provided by The Hartford and The Brookside Group.

Hubbardton Forge is a designer and manufacturer of hand-forged residential and commercial lighting products. The company is based in Castleton, VT (www.hubbardtonforge.com).

“Abacus Finance was able to meet the unusually tight deadlines that were essential to closing this transaction,” said Rufus Clark, Managing Partner and Co-Founder of Bunker Hill. “We have known the Abacus team members for years, and they lived up to their reputation for delivering on what they promise. Their due diligence was extensive and quickly completed, and the transaction terms they proposed were in line with what we were seeking with respect to both amortization and the cost of capital.”

Abacus targets debt financing opportunities of up to $50 million with a typical hold size ranging from $10 million to $25 million. The companies that Abacus finances generally have EBITDAs between $3 million and $15 million. Abacus was formed in June 2011 and is an affiliate of New York Private Bank & Trust, the holding company for Emigrant Bank, founded in 1850, the largest privately held bank in America with approximately $10 billion in assets. Abacus is based in New York (www.abacusfinance.com).

Abacus team members involved in the transaction included Sean McKeever, Eric Petersen, and Tim Wong.

Bunker Hill makes control investments in lower middle market companies with revenues up to $300 million, EBITDAs between $5 million and $35 million and enterprise values typically between $30 million and $150 million. Sectors of interest include industrial products, business services, specialty retail, and consumer products. The firm has offices in Boston and San Diego (www.bunkerhillcapital.com).

“This was a great match for us for a number of reasons,” said Tim Clifford, President and CEO of Abacus. “Like us, Bunker Hill’s focus is on lower-middle market companies. We know the firm’s senior partners well and have a great deal of respect for their knowledge of and experience in consumer products and the other sectors in which they invest. As in other transactions, success was a function of our speed, flexibility and ability to provide certainty of close – all important aspects of what we call our Total Partnership Approach.”

© 2013 PEPD • Private Equity’s Leading News Magazine • 11-12-13

Pharos Capital Adds New Senior Financial Analyst

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Pharos Capital Group has hired Joshua Brown as a Senior Financial Analyst in the firm’s Dallas office. Mr. Brown will be responsible for deal review, financial due diligence and financial modeling.

“We are excited to welcome Josh and we look forward to the energy and ideas he will bring to his role. We continually look for talented young people to be part of our growing Pharos team,” said Kneeland Youngblood, Co-founder and Partner at Pharos Capital.

Prior to joining Pharos, Mr. Brown was an Investment Banking Analyst in the Healthcare group at William Blair & Company. Before that, he completed internships at J.P. Morgan and Goldman Sachs. Mr. Brown graduated from Morehouse College with a BA in Economics.

Pharos Capital Group invests $10 million 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 • 11-12-13