December 20, 2013
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Archives for December 20, 2013

Charlesbank Sells Tecomet to Genstar Capital

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tecomet nfCharlesbank Capital Partners has sold its portfolio company Tecomet, a manufacturer of components for the medical device and aerospace & defense markets, to Genstar Capital.

Tecomet is a contract manufacturing, engineering, and technology company specializing in net shape forging, precision machining, photochemical etching, surface texturing, vacuum brazing, laser and electron beam welding, and rapid prototyping. The company’s components and assemblies are used in the medical (with a special emphasis on orthopedic, trauma and spinal implants), aerospace & defense, commercial and industrial markets. Tecomet is headquartered in Wilmington, MA and has additional facilities in Woburn, MA; Kenosha, WI; and Azusa, CA (www.tecomet.com).

Charlesbank Capital Partners invests in management-led buyouts and growth capital financings, typically investing from $50 million to $150 million per transaction in companies with enterprise values of $100 million to $750 million. The firm has $2 billion of capital under management and has offices in Boston and New York (www.charlesbank.com).

Harris Williams & Co. (www.harriswilliams.com) was the lead advisor to Charlesbank Capital Partners on this transaction. The transaction was led by James Clark, Geoff Smith, Whit Knier and Turner Bredrup from Harris Williams & Co.’s Healthcare & Life Sciences Group; Jon Nemo from the firm’s Aerospace, Defense & Government Services Group; and Bill Roman and Trey Packard from the firm’s Industrials Group.

In 2008, Harris Williams & Co. advised Cardinal Health on the sale of its subsidiary, Tecomet, to Charlesbank. “We are extremely proud to work once more with Tecomet and management to deliver a successful outcome,” said Turner Bredrup, a managing director in Harris Williams & Co.’s HCLS Group. “The greatest compliment our clients can give us is the opportunity to work with them again.”

Genstar Capital invests from $50 million to $400 million in middle-market companies that have enterprise values from $50 million to $1 billion and EBITDAs greater than $15 million. Sectors of interest include life sciences, healthcare services, software & software services, financial services, and industrial technology. The firm was founded in 1988 and is based in San Francisco (www.gencap.com).

“Tecomet is led by an outstanding management team that we are excited to partner with. Bill Dow, John Connolly and the rest of Tecomet’s employees have built the company into one of the premier precision manufacturers for the medical device and aerospace & defense industries, driving growth both organically and through the sourcing and integration of strategic acquisitions,” said Rob Rutledge, Principal at Genstar Capital. “Genstar is eager to partner with the Tecomet management team to expand the company’s capabilities, product offering and geographic reach while continuing to provide excellent quality and service to its customers.”

© 2013 PEPD • Private Equity’s Leading News Magazine • 12-20-13

Saugatuck Invests in APCT

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apct nfSaugatuck Capital has made an investment in APCT Holdings, a manufacturer of multilayer printed circuit boards.

APCT is a manufacturer of quick-turn, complex, multilayer printed circuit boards. The quick-turn segment is a market niche within the printed circuit board industry that serves original equipment manufacturers and electronic manufacturing services providers who require high quality, time-critical manufacturing capabilities. These jobs are typically characterized by small quantities, premium pricing and fast turnaround times. APCT has over 90 employees and is headquartered in Santa Clara, CA (www.apctinc.com).

APCT was founded in 1977 as Advanced Printed Circuit Technology and was acquired by the current ownership group (CEO Steve Robinson, CFO Ed Barclay, and VP of Business Development, Bill Boyle) in 2008. Messrs. Robinson, Barclay, and Boyle are former senior members of the management team of Data Circuit Systems, a prior Saugatuck Capital portfolio company that the firm owned from 2000 to 2004.

Saugatuck Capital invests in leveraged recapitalizations, buyouts, and growth equity investments in the lower middle-market. Saugatuck seeks companies with revenues of $15 million to $125 million in fragmented service and manufacturing industries. Saugatuck was founded in 1982 and is based in Wilton, CT (www.saugatuckcapital.com).

Amalgamated Capital (www.amalcap.com) provided the senior debt financing and Greyrock Capital Group (www.greyrockcapitalgroup.com) provided the mezzanine financing as well as an equity investment for this transaction.

© 2013 PEPD • Private Equity’s Leading News Magazine • 12-20-13

Sun Sells Frontier Spinning to American Securities

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frontier nfSun Capital Partners has sold its portfolio company Frontier Spinning Mills, a producer of spun yarns for the knitting and weaving industries, to American Securities.

Frontier Spinning Mills is one of the world’s largest producers of cotton and cotton/polyester blend yarns for the knitting and weaving industries. Yarn produced by Frontier is used in sportswear, undergarments, socks, sweaters, fleece, denim, and home furnishings. The company operates state-of-the-art manufacturing facilities in multiple states and employs 1,076 people. Frontier Spinning Mills is headquartered in Sanford, NC (www.frontierspinning.com).

Following the acquisition of Frontier by Sun Capital in March 2008, the management team was strengthened and the company’s operations were optimized through investments in capital equipment and training. “Frontier’s emergence as the second-largest cotton spinner in the US validates the success and progress the company has achieved under our ownership,” said Marc Leder, Co-CEO at Sun Capital. “We are confident the company is well-positioned for continued growth as a result of its increased plant capacity, streamlined manufacturing footprint, optimized productivity, and expanded product line.”

Sun Capital Partners is a private investment firm focused on leveraged buyouts, equity, debt, and other investments in companies that can benefit from its in-house operating professionals and experience. Sun Capital has invested in and managed more than 330 companies worldwide with combined sales in excess of $45 billion since the firm’s inception in 1995. The firm has offices in Boca Raton, Los Angeles, and New York as well as affiliates with offices in London, Paris, Frankfurt, Luxembourg, Shanghai and Shenzhen (www.SunCapPart.com).

American Securities invests in businesses with $500 million to $2 billion of revenues. Investments are undertaken with conservative financial structures that typically include only equity and senior debt. The firm aims to invest $150 million to $500 million of equity capital in each portfolio company. Sectors of interest include industrial manufacturing, specialty chemicals, aerospace and defense, energy, business services, healthcare, media, restaurants, and consumer products. The firm has more than $10 billion of capital under management and is currently investing from its sixth fund. American Securities has offices in New York and Shanghai (www.american-securities.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 12-20-13

Topspin Exits Hart Systems

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hartsys nfZebra Technologies Corporation has acquired Hart Systems, a provider of physical inventory management services and a portfolio company of Topspin Partners LBO, for approximately $94 million in cash. Topspin acquired Hart Systems in November 2008.

Hart Systems is a provider of inventory counting equipment and services to retailers, primarily in the US and Canada. The company owns a fleet of mobile scanning devices that its customers use to count store inventories. The company also provides the supporting infrastructure and various reporting capabilities as part of its service. Hart System’s customers include companies in a range of retail segments including apparel, grocery, consumer electronics, convenience and automotive. Hart Systems is based in Hauppauge, NY (www.hartsystems.com).

Topspin LBO makes control investments in profitable and established lower middle-market businesses. Sectors of interest include consumer products, business services, food & beverage, retail, media, niche manufacturing and security. The firm is based near New York City in Roslyn Heights, NY (www.topspinlbo.com).

Zebra Technologies (NASDAQ: ZBRA) is a manufacturer of thermal bar code label and receipt printers, RFID smart label printer/encoders, card and kiosk printers. The company is headquartered near Chicago in Vernon Hills, IL (www.zebra.com).

“As the recognized leader in self-managed inventory solutions, Hart gives retailers better tools to optimize in-store inventories in an environment of increasingly complex global supply chains,” said Anders Gustafsson, Zebra’s chief executive officer. “It is an excellent strategic fit for Zebra. Hart’s solutions add high-value software and data analytics capabilities to Zebra, and increase our presence within the “Internet of Things” ecosystem. The business expands the portfolio of products, solutions and services Zebra provides to current customers, and gives us important relationships with new ones.”

© 2013 PEPD • Private Equity’s Leading News Magazine • 12-20-13

Sycamore Partners to Acquire The Jones Group

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jones nfSycamore Partners has entered into an agreement to acquire The Jones Group for approximately $1.2 billion in equity value. Including net debt the transaction, which is expected to close in the second quarter of 2014, has an enterprise value of $2.2 billion.

The Jones Group (NYSE: JNY) is a designer, marketer and wholesaler of over 35 brands in the apparel, footwear, jeanswear, jewelry and handbag markets. The company markets directly to consumers through branded specialty retail and outlet stores, through concessions at upscale department stores and through its e-commerce sites. The company’s brands and licensing jones fagreements are extensive and include: Nine West, Jones New York, Anne Klein, Kurt Geiger, Rachel Roy, Robert Rodriguez, Robbi & Nikki, Stuart Weitzman, Brian Atwood, Boutique 9, Easy Spirit, Carvela, Gloria Vanderbilt, l.e.i., Bandolino, Enzo Angiolini, Nine & Co., GLO, Joan & David, Miss KG, Kasper, Energie, Evan-Picone, Le Suit, Mootsies Tootsies, Grane, Erika, Napier, Jessica Simpson, Givenchy, Judith Jack, Albert Nipon, Pappagallo and Rafe. The Jones Group is headquartered in New York (www.jonesgroupinc.com).

“We are pleased to have reached this agreement, which we believe is a positive development for all of our stakeholders. This business, which I founded nearly 45 years ago, has expanded into a global portfolio of powerful brands,” said Sidney Kimmel, The Jones Group Founder and Chairman of the Board of Directors. “I am proud of our heritage and believe The Jones Group’s brands will thrive through our partnership with Sycamore.”

Sycamore Partners invests in consumer and retail companies. The firm has more than $1 billion of capital under management and is based in New York (www.sycamorepartners.com).

“We are honored that the Board of The Jones Group has entrusted Sycamore Partners as the steward of this portfolio of iconic brands. We look forward to a successful partnership with the company’s talented associates as we continue to serve The Jones Group’s many loyal customers,” said Stefan Kaluzny, Managing Director of Sycamore Partners.

BofA Merrill Lynch and Guggenheim Securities are acting as financial advisors to Sycamore Partners. Citigroup Global Markets is acting as lead financial advisor to The Jones Group and Peter J. Solomon Company is acting as financial advisor to the company’s Board of Directors.

© 2013 PEPD • Private Equity’s Leading News Magazine • 12-20-13

 

Spire Capital Acquires Surgent Tax & Accounting Education

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surgent nfSpire Capital has acquired Surgent Tax & Accounting Education, a provider of continuing education for accounting, auditing and taxation professionals, in partnership with the company’s management team. This is the first investment made by Spire Capital Partners III, LP.

Surgent Tax & Accounting Education is a provider of professional education and career training services for the accounting, auditing and taxation industries. In 2013, Surgent will serve more than 105,000 professionals in 50 states through its web based and on-site educational products. Surgent was founded in 1985 and is headquartered in the Philadelphia suburb of Devon (www.cpenow.com).

“We see tremendous opportunity with the Surgent business,” said Bruce Hernandez, Partner of Spire Capital. “The company has developed strong relationships with state accounting societies across the country since its founding while successfully innovating and growing new products and delivery methods. For example, Surgent will grow its recently introduced webinar annual subscriptions by greater than 100% in 2013. With strong management led by Jack Surgent and our demonstrated investment expertise in the education industry, we believe we can build on Surgent’s history and reputation to become the leading accounting education technology business serving state accounting societies, public accounting firms and industry accounting professionals.”

Spire Capital Partners invests from $15 million to $40 million in companies with revenues of at least $10 million and EBITDAs of $5 million. Sectors of interest include business services, information services, media, education and communications. Spire Capital Partners is led by partners Andy Armstrong, Bruce Hernandez, David Schaible and Sean White. The firm was founded in 2000 and is based in New York with an additional office in West Conshohocken, PA (www.spirecapital.com).

“I am very excited to continue leading Surgent as a valued partner to our state accounting society associations and to grow our public accounting firm offering which includes enhanced curriculum for various experience levels, comprehensive subject matter breadth and a foundational technology platform for our clients to utilize,” said Jack Surgent, Chief Executive Officer of Surgent. “Our goal has always been to provide the best quality content and education in the industry. Partnering with Spire will provide the strategic focus and resources needed to fuel our growth in the coming years.”

© 2013 PEPD • Private Equity’s Leading News Magazine • 12-20-13

Great Point Has Final Close of Fund 2 Above Target

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greatpoint nfGreat Point Partners has held a final closing of Great Point Partners II, LP (GPP II) with $215 million of capital commitments. The new fund exceeds the firm’s $200 million fund raising target and is larger than the firm’s prior fund which had $156 million of capital commitments.

jjay nf“We are pleased to announce our final close,” said Jeffrey Jay, M.D., Managing Director of Great Point Partners. “This successful fundraise was driven by strong support from both existing and new investors in the United States, the United Kingdom and continental Europe. We see this success as a clear global endorsement by our investors of our growth buy‐out and growth recapitalization investing model.”

GPP II’s limited partners include endowments, foundations, family offices, banks and pension funds. A significant number of the new investors are from outside of the United States.

GPP II, like Great Point’s prior fund, will invest in lower middle market, growth health care companies. Great Point invests in most areas of health care with particular emphasis on the outsourcing sector, the pharmaceutical and biotechnology supply chain, health care information technology and devices and diagnostics.

“GPP II will continue to pursue a strategy the firm has followed for a decade ‐ partnering with management teams to build market‐leading health care companies through a combination of organic growth and the aggressive pursuit of accretive tuck‐in acquisitions,” said Adam Dolder, Managing Director. “While growth is always a core aspect of our investment theses, we add value by placing members of our CEO Advisory Board as Operating Chairmen or Lead Directors on portfolio company boards and by assigning a team to research, source and close tuck‐in acquisitions.”

Great Point Partners now has approximately $700 million of equity capital under management. Since founding in 2003, the firm has provided growth equity, recapitalization and management buyout financing to more than 100 health care companies. Currently the firm manages capital in both public equity and private equity funds. Both the private and public funds invest across all sectors of the health care industry including biotechnology and life sciences, consumer health, generic drugs, health care services, information technology, insurance, medical devices, specialty pharmaceuticals and workers compensation. Great Point Partners is located in Greenwich, CT (www.gppfunds.com).

“We believe that our strong track record and continuing ability to both make and exit investments that generate attractive rates of return, regardless of the difficulty of the economic cycle, is a testament to the firm’s focus on building durable companies that lower the cost of health care and enhance the efficiency in production and delivery,” said David Kroin, Managing Director.

© 2013 PEPD • Private Equity’s Leading News Magazine • 12-20-13

NXT Capital Backs Tenex Buy of JPW Industries

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nxt nfNXT Capital provided a $98 million senior secured facility to back Tenex Capital’s recent acquisition of JPW Industries. NXT Capital was the Joint Lead Arranger, Sole Bookrunner and Administrative Agent for this transaction.

“NXT Capital was a valuable partner in the JPW Industries transaction,” said Scott Galletti, Managing Director, Tenex. “The NXT team was flexible and responsive in supporting our investment. We appreciated NXT’s efforts throughout the deal process.”

Lincoln International (www.lincolninternational.com) acted as exclusive financial advisor to Tenex and placed the senior debt financing with NXT Capital. Also participating in the senior debt facility was Sumitomo Mitsui Banking Corporation and ING Capital. Subordinated debt was provided by Fifth Street Finance Corp.

JPW Industries designs, markets, and distributes a range of metalworking and woodworking machinery and shop tools under the JET, Powermatic, and Wilton brand names. The company sources approximately 4,000 SKUs from over 400 suppliers and sells through a network of approximately 3,000 national and independent distributors, wholesalers, dealers, and online/specialty retailers. The company is headquartered near Nashville in La Vergne, TN, with wholly owned operations in Switzerland, France, Hong Kong, and Taiwan, as well as joint ventures in Germany and Russia (www.jettools.com) (www.powermatic.com) (www.wiltontools.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).

Tenex Capital Management invests up to $100 million in middle-market companies in the transportation, industrial, manufacturing, and health and business services sectors. The firm has $452 million of committed capital and is based in New York (www.tenexcm.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 12-20-13

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