Archives for December 17, 2013

IOP Invests in KIC

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Industrial Opportunity Partners has made an investment in KIC LLC in partnership with the current management team and owners of the company. KIC represents IOP’s third platform investment in Industrial Opportunity Partners II, LP, the firm’s $275 million second fund.

IOP is partnering in its investment with Greg Hatton, John Schneider, Omar Fakhoury and Grant Hatton, all of whom will retain significant ownership interests in KIC and remain in their current management roles to continue to grow the business.

KIC is a supplier of wheel-end components for heavy and medium-duty trucks and trailers. The company supplies brake drums, hub & drum assemblies, steel wheels and aluminum wheels to both original equipment manufacturers and aftermarket distributors. KIC designs and tests its own products and partners with contract manufacturers located throughout the world. The company is headquartered in Vancouver, WA and operates through nine distribution centers located in the United States, Canada, and Mexico (www.kic-group.com).

As part of the transaction, Andrew Weller, an IOP Operating Principal, will assume the position of Vice Chairman. Mr. Weller, who has significant experience with companies serving the commercial vehicle market, is a member of IOP’s Board of Operating Principals, which is comprised of seasoned executives who provide leadership to the businesses in which IOP invests.

“Under Greg Hatton’s strong leadership, KIC has been keenly focused on customer needs. We believe this focus on quality and customer service has helped the company to grow with both new and existing customers. I look forward to working closely with Greg and the rest of the KIC management team in growing the company by building on KIC’s reputation with its customers and suppliers,” said Mr. Weller.

IOP focuses on acquiring middle-market manufacturing and value-added distribution businesses, typically with revenues between $30 million and $350 million. IOP targets businesses with strong product, customer, and market positions and provides management and operational resources to support sales growth and operational improvements. The firm has $460 million of committed capital and was founded in 2005. IOP is headquartered in near Chicago in Evanston, IL (www.iopfund.com).

“We are very excited to partner with the KIC team. KIC is a growing business with an excellent reputation for quality and customer service and strong relationships with both its customers and suppliers,” said Adam Gottlieb, Senior Managing Director of IOP.

Wells Fargo Bank provided financing and Winston & Strawn provided legal representation to IOP in the transaction.

© 2013 PEPD • Private Equity’s Leading News Magazine • 12-17-13

Sentinel Capital Partners Purchases Power Products

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Sentinel Capital Partners has acquired Power Products, the electrical segment of Actuant Corporation (NYSE:ATU), for $258 million.

Power Products is an electrical products company that designs, manufactures and distributes branded electrical tools, consumables, wiring products, harsh-environment power conversion solutions, transformers, inverters, switches, and other related electrical products and accessories. The company serves the construction and remodeling, marine and recreation, industrial, and utility market segments through a variety of sales channels including OEMs, wholesale distributors, internet, catalog, and retail outlets. Power Products’ brands include Del City, Gardner Bender, Marinco, Mastervolt, Acme, and Turner Electric. Power Products is headquartered near Milwaukee in Menomonee Falls, WI (www.delcity.net) (www.gardnerbender.com) (www.marinco.com) (www.mastervolt.com) (www.acmepowerdist.com) (www.turnerswitch.com).

“We are very excited to work with Power Products’ management to help build the business,” said Eric Bommer, a Sentinel partner. “Power Products owns great brands and has a long history of successfully serving its many customers, a very talented management team, and exciting growth opportunities.”

Sentinel Capital Partners invests in middle market companies in the United States and Canada in partnership with management. The firm invests in management buyouts, recapitalizations, corporate divestitures, and going-private transactions of businesses with EBITDAs between $7 million and $40 million. Sentinel targets eight industry sectors: aerospace & defense, business services, consumer, distribution, food & restaurants, franchising, healthcare, and industrials. The firm is headquartered in New York (www.sentinelpartners.com).

The acquisition of Power Products adds another corporate carve out transaction to Sentinel’s portfolio. Sentinel has now completed six similar transactions including IEP Technologies from United Technologies; Southern California Pizza Hut stores from Yum! Brands; Vintage Parts from The Swire Group; Fasloc from DuPont; Alemite from Invensys; and Taco Bell stores in Minnesota from Pepsico.

© 2013 PEPD • Private Equity’s Leading News Magazine • 12-17-13

BelHealth Acquires Special Design Health Care

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Town Total Health, a specialty pharmacy and a portfolio company of BelHealth Investment Partners, has completed the acquisition of Special Design Health Care, a specialty pharmacy.

Special Design Health Care is an independent specialty pharmacy serving gastroenterologists and hepatologists and their patients in more than 20 states. The company was founded in 1989 and is based in Cape Girardeau, MO (www.specialdesignhealthcare.com).

Town Total, acquired by BelHealth in December 2012, is a specialty pharmacy servicing patients with various chronic diseases and complex medical conditions including: Hepatitis C, HIV, chronic inflammatory diseases, oncology and transplant maintenance therapy. The company provides a range of specialty services for patients, providers, payors and pharmaceutical companies including reimbursement assistance, patient education, clinical adherence programs and prompt delivery of critical medications. The company is based in Melville, NY (www.towntotal.com).

According to BelHealth, Town Total in combination with Special Design is at the forefront of the evolving Hepatitis C market and is well positioned as a full service specialty pharmacy servicing patients from New York to Colorado.

Joy Doll, R.N., formerly a Director at Special Design, has become Senior Vice President and leads Town Total’s Hepatitis C business unit. In addition to Ms. Doll, her sales and operational team will expand Town Total’s sales and clinical staff plus add a nursing capability to offer even greater patient support and improved outcomes.

“Special Design is the perfect addition to Town Total, expanding our geographic coverage and expanding our service offering more deeply into Hepatitis C and inflammatory conditions such as RA, Crohns and psoriasis. Additionally, we are thrilled to have Joy Doll join the team and lead our effort in what is becoming a highly dynamic Hepatitis C market,” said Michael Nameth, CEO of Town Total.

BelHealth Investment Partners is a healthcare private equity firm focused on lower middle market companies. The firm invests from $10 million to $25 million in companies in three healthcare segments: services, information technology, and products & distribution. BelHealth is based in New York (www.belhealth.com).

“Following the recent launch of two highly anticipated Hepatitis C drugs by Gilead and Janssen (Sovaldi and Olysio), we are pleased to increase our investment into the specialty pharmacy industry and expand Town Total’s Hepatitis C business and our national footprint. Special Design perfectly fits both of these objectives,” said Harold Blue, BelHealth’s Managing Partner.

© 2013 PEPD • Private Equity’s Leading News Magazine • 12-17-13

Avista Acquires Vertical Pharmaceuticals and Trigen Laboratories

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Avista Capital Partners has acquired a majority interest in Vertical/Trigen Holdings, the owner of Vertical Pharmaceuticals and Trigen Laboratories. Avista is partnering with co-founders Steven Squashic, Kevin Hudy, and David Purdy, who will remain in place and retain a significant minority ownership stake in Vertical/Trigen.

Vertical/Trigen is a specialty pharmaceutical company engaged in the development, marketing, and distribution of both branded and generic prescription pharmaceuticals in the United States. Vertical, the segment of the company focused on branded pharmaceuticals, specializes in women’s health, pain management, and respiratory and allergy medications. Its brands include OB Complete, Corvite, ConZip, and Lorzone and are marketed by a dedicated national sales force. Trigen, the generic pharmaceutical arm of the company, markets over 70 formulations in the prenatal, hematinic (iron) supplement, and cough/cold remedy markets. The company is based in Sayreville, NJ (www.verticalpharma.com) (www.trigenlab.com).

“We believe Vertical/Trigen is a strong platform on which to build a diversified North American pharmaceuticals business. The company’s existing product footprint and development pipeline can be leveraged in combination with product acquisition and licensing opportunities to create a broader branded and generics company with a presence in a number of attractive therapeutic markets,” said David Burgstahler, Partner and President of Avista.

Upon closing of this acquisition, Brian Markison, a Healthcare Industry Executive at Avista, has joined the company’s Board of Directors as Executive Chairman. Mr. Markison has more than 30 years of operational, marketing, commercial development, and sales experience with international pharmaceutical companies. Most recently, he was President and Chief Executive Officer of Fougera Pharmaceuticals, a dermatology-focused pharmaceuticals company that was spun off from Nycomed A/S in 2011 and sold to Sandoz, the generics division of Novartis, in July 2012. Prior to leading Fougera, Mr. Markison served as Chairman and Chief Executive Officer of King Pharmaceuticals before it was acquired by Pfizer.

“I am thrilled to be joining Vertical/Trigen as Executive Chairman. Having led other specialty pharmaceutical companies through various phases of development, I am very excited about the company’s potential to increase market share with existing products while pursuing attractive add-on opportunities to accelerate growth. I look forward to working with the Vertical/Trigen team to support these efforts,” said Mr. Markison.

Avista Capital Partners, with over $5 billion of capital under management, makes control or influential minority investments in growth-oriented energy, healthcare, communications & media, industrials, and consumer businesses. The firm was founded in 2005 and is based in New York with offices in Houston and London (www.avistacap.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 12-17-13

Cortec Group Acquires IOP Ophthalmics

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Katena Holdings, a portfolio company of Cortec Group, has acquired Arxa5 Corporation (dba IOP Ophthalmics), a medical technology company providing specialty ophthalmic surgical products. As part of this transaction, IOP’s founders, Jason Malecka and Erich Ziegler, have taken an equity ownership position in Katena.

IOP develops, commercializes and distributes specialty ophthalmic surgical products used in the cornea, glaucoma and oculoplastic subspecialty markets. The company’s products are sold under the Ambio5, Ambio2, AmbioDisk, Molteno, and Tutoplast brands to hospitals, surgery centers and ophthalmic surgeons. The company is based in Costa Mesa, CA (www.iopinc.com).

“The acquisition of IOP is a logical extension of Katena’s position in the ophthalmic surgical market. As we serve a very similar customer base, this combination of two highly respected and successful companies not only creates greater critical mass in the ophthalmology marketplace, but enhances our ability to provide more clinical solutions and be of greater value to our customers,” said Bill Friedberg, CEO of Katena.

Katena, acquired by Cortec in September 2009, is a designer and marketer of surgical instruments for ophthalmic surgery of the anterior segment of the eye (i.e., cataracts, corneal transplants, LASIK, glaucoma). Katena’s products are sold globally to hospitals, ambulatory surgery centers and individual ophthalmic surgeons under the Katena brand name. The company also distributes single patient use corneal transplant devices. The company is based in Denville, NJ (www.katena.com).

“Cortec is excited about the combination of Katena and IOP. This complementary acquisition provides both companies with meaningful opportunities for growth in the US and abroad,” said Jonathan Stein, a Partner at Cortec.

Cortec Group invests in middle-market specialty manufacturing, service, healthcare and distribution businesses with enterprise values of $40 million to $300 million. Cortec currently manages over $1 billion in its two active funds. The firm was founded in 1984 and is based in New York (www.cortecgroup.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 12-17-13

Littlejohn & Co. Acquires Hostway

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Littlejohn & Co. has acquired Hostway Corporation, a provider of hosted information technology services.

Hostway is a multinational web hosting and technology infrastructure company that provides individuals, small- to medium-sized businesses and large corporations with email and hosting services for web sites, databases and business applications. Hostway serves more than 500,000 customers worldwide. Major clients include: Coca-Cola, Disney, McGraw-Hill, Sony/BMG, Wrigley Company, Hershey’s, Fox News Channel, JVC, Bank of Montreal, Tribune Company, Infinity Broadcasting Corporation, and the Campbell Soup Company. Hostway was founded in 1998 and is headquartered in Chicago (www.hostway.com).

“Tremendous demand for traditional outsourced IT solutions and emerging demand for Software and Platform as a Service is fueling the growth of the hosting industry. Hostway serves as a great platform to capitalize on this opportunity due to its unique hosting platform, world class customer service and robust data center infrastructure,” said Michael Kaplan, Managing Director of Littlejohn & Co. “We look forward to working with Hostway’s management to accelerate growth by continued investment in Hostway’s technology platform, enhancing its sales and marketing efforts and selectively making acquisitions targeted at enhancing the customer experience.”

Littlejohn & Co. makes control and non-control investments in middle-market companies that are undergoing a fundamental change in capital structure, strategy, operations or growth. The firm is currently investing from Littlejohn Fund IV which has over $1.3 billion in capital commitments. Littlejohn & Co. is based in Greenwich, CT (www.littlejohnllc.com).

“We are extremely pleased to partner with Littlejohn and gain access to additional resources to help us grow our managed, cloud and web hosting businesses,” said John Martis, President of Hostway. “The Littlejohn team has deep experience growing businesses across a variety of industries and can help us further differentiate our offerings and build on our customer base.”

Cowen and Company (www.cowen.com) acted as the exclusive financial advisor to Littlejohn on the transaction and DH Capital (www.dhcapital.com) acted as exclusive financial advisor to Hostway.

© 2013 PEPD • Private Equity’s Leading News Magazine • 12-17-13

SFW Completes Second Dividend Recap of AGDATA

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SFW Capital Partners has completed a second dividend recapitalization of its portfolio company AGDATA, a provider of data and analytics to agricultural input and animal health manufacturers. The proceeds of the recapitalization were sourced from an increase in the company’s term loan and were used to fund a significant cash distribution to stockholders.

AGDATA is a provider of data and analytics to agricultural and animal health manufacturers throughout the US and Canada. AGDATA collects and analyses data from over 9,500 retailers and distributors and supports its customer’s utilization of this data to design and execute targeted marketing programs and for channel and salesforce management. The company is based in Charlotte, NC (www.AGDATA.net).

SFW Capital Partners acquired AGDATA from Carousel Capital in February 2010. At that time Golub Capital provided $37.5 million in senior debt to fund SFW’s acquisition. In August 2011, AGDATA completed its first dividend recapitalization, the proceeds of which were used to fund an initial distribution to stockholders. As a result of the two recapitalizations, AGDATA has distributed an amount equal to 70% of the original equity invested in the company.

“AGDATA has experienced solid growth by providing vital strategic information and analytics to the agricultural and animal health sectors,” said Roger Freeman, a Partner at SFW. “We look forward to continuing to work closely with the AGDATA leadership team to capitalize on the strong demand for strategic information and analytical tools in these markets.”

SFW focuses exclusively on analytical tools and related services companies, including providers of instrumentation, software, information and analytical services. SFW typically invests from $10 million to $75 million of equity in middle market companies that have up to $25 million in EBITDA. The firm has offices in Rye, NY and Hudson, OH (www.sfwcap.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 12-17-13

NXT Backs WestView’s Buy of Apex Print Technologies

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NXT Capital has provided a senior secured credit facility to fund Westview Capital Partners’ recent acquisition of Apex Print Technologies. NXT Capital was the Sole Lead Arranger, Sole Bookrunner and Administrative Agent for this transaction.

“NXT Capital was an outstanding financing partner,” said John Turner, General Partner, WestView Capital Partners. “NXT’s experience in the healthcare revenue cycle management industry and ability to provide a unitranche structure that met our needs were important considerations.”

Apex provides a suite of revenue cycle services focused on improving patient statements and collections, predominantly for healthcare providers. The company’s primary services include: (i) electronic and paper statement processing and presentment, (ii) software-as-a-service based support tools that allow customers to manage the entire patient-pay collection process, and (iii) an online payment offering. Apex was founded in 1995 and is headquartered in St. Paul, MN with an additional facility in Green Bay, WI (www.apexinformationtech.com).

NXT Capital provides structured financing to middle-market and growth companies through its Corporate Finance, Equipment Finance, Real Estate Finance and Venture Finance groups, originating transactions directly on a national basis. NXT Capital targets senior financing opportunities up to $150 million with a hold size up to $50 million. NXT Capital is led by former principals of Merrill Lynch Capital and was formed in 2010 by Stone Point Capital and the founding management team. The firm is based in Chicago with offices in New York, Atlanta, Boston, Charlotte, Dallas, Kansas City, Minneapolis/St. Paul, Phoenix, San Francisco and Silicon Valley (www.nxtcapital.com)

WestView Capital Partners invests from $10 million to $40 million of equity in lower middle market companies with EBITDAs between $3 million and $20 million. Industries of interest include business and healthcare services; software and IT services; industrial and manufacturing; distribution and logistics; media and publishing; and consumer products and retail. The firm will invest both as a minority or majority investor. In November 2013 the firm closed WestView Capital Partners III, LP, at $430 million. The fund experienced strong demand and was significantly over-subscribed. WestView was founded in 2004 by Managing Partners Carlo von Schroeter and Rick Williams. The firm is based in Boston (www.wvcapital.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 12-17-13

Ben Schnakenberg Newest Partner at High Road

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High Road Capital Partners has promoted Ben Schnakenberg to partner. Mr. Schnakenberg joined the firm as an Associate in 2008 and was promoted to Vice President in 2009, and Principal in 2011.

“Ben has proven himself to be a highly capable investor who exemplifies our ‘high road’ business philosophy,” said Bob Fitzsimmons, co-founder and Managing Partner of High Road Capital Partners. “This promotion reflects Ben’s contribution to the growth and success of our portfolio companies and the firm.”

Since joining High Road, Mr. Schnakenberg has been involved with six platform acquisitions, nine add-on acquisitions and one exit. He serves as a director of Accurate Component Sales, BlueSpire, Celco Controls, Dowden Medical Communications Group, and SMB Machinery Systems.

Previously, Mr. Schnakenberg was a Senior Vice President at LaSalle Bank, now part of Bank of America, where he served as the chief of staff to LaSalle’s CEO. Prior to that, he worked in middle-market commercial lending for LaSalle and Madison Capital Funding. Mr. Schnakenberg received a BA from Valparaiso University and an MBA from the Wharton School of the University of Pennsylvania.

Earlier this month, High Road held a final closing of High Road Capital Partners Fund II, LP (Fund II). Fund II hit its hard cap and raised $320 million in total commitments, well in excess of its $200 million target and twice the size of its predecessor fund.

High Road Capital Partners invests in manufacturing, service, or value-added distribution businesses with revenues of $10 million to $100 million and EBITDAs of $3 million to $10 million. High Road was formed in 2007 and currently manages over $470 million of committed capital. High Road has completed 27 transactions, comprising 25 acquisitions – 11 platform investments, 14 add-on acquisitions – and two exits since its founding in 2007. The firm is based in New York (www.highroadcap.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 12-17-13