Archives for 2014

Sheridan Legacy Exits Diamondback Drugs

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Sheridan Legacy Group has sold Diamondback Drugs, a veterinary compounding pharmacy, to Tailwind Capital.

Diamondback serves veterinary clinics, veterinary hospitals, zoos, aquariums, research institutions, and individual pet owners. The company has an extensive pharmaceutical product line ranging from ophthalmic preparations to cancer treatment solutions. Diamondback is headquartered in Scottsdale, AZ (www.diamondbackdrugs.com).

“Sheridan’s investment allowed us to build upon our core strength of offering quality, customized products to pet owners and veterinarians, further extend our offering, and improve our operations while continuing to deliver outstanding service,” said Michael Blaire, Chief Executive Officer at Diamondback.  “As a result of our partnership with Sheridan, Diamondback is well-positioned to grow its leading market share and to continue to deliver critical medications for pets.”

Sheridan Legacy Group makes investments of $10 million to $30 million in leveraged buyouts, recapitalizations and large minority financings of lower middle market companies with enterprise values between $20 million and $150 million. Sectors of interest include healthcare and consumer.  The firm was founded in 2012 by Jonathan Lewis and Michael Allietta and is headquartered in Chicago (www.sheridanlegacy.com).

Tailwind Capital makes investment of $25 million to $100 million in middle market companies in the healthcare and business & communications services sectors. The firm is currently making investments out of its inaugural $775 million fund raised in 2009.  Tailwind Capital is based in New York (www.tailwind.com).

Deloitte Corporate Finance was the exclusive financial advisor to Diamondback Drugs.

2014 PEPD • Private Equity’s Leading News Magazine • 12-18-14

Cortec Group Acquires OCR Canada

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Barcodes, a portfolio company of Cortec Group, has acquired OCR Canada.  This is the first add-on acquisition completed by Cortec for Barcodes since it acquired the company in November 2012.

OCR provides automated identification and data capture equipment and  services to companies throughout Canada.  OCR provides data capture, mobile computing, and wireless infrastructure products along with custom software applications and onsite integration and support services to over 8,000 customers. The company was founded in 1972 and is based in the Toronto suburb of Markham (www.ocr.ca).

Barcodes is a distributor of automatic identification capture products, selling primarily to small and medium-sized businesses and Fortune 500 customers. The company’ products include barcode scanners, mobile computers, label printers, point-of-sale systems, identification cards, RFID equipment, and other related consumable products. The company is based in Chicago (www.barcodesinc.com).

“The combined product lines and software and professional services capabilities of these two companies provide meaningful opportunities for future growth throughout North America.  We look forward to working with the OCR team to continue to expand on its leadership position in the Canadian automatic identification capture market,” said Cortec Partner Mike Najjar.

Cortec Group invests in middle-market distribution, healthcare, consumer, and specialty products and service 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).

“Our goal is to make capturing and managing enterprise data easier than ever before for our customers. With OCR’s leadership position in enterprise mobility, RFID, and barcode solutions in Canada, we will combine our strengths to provide a greater product, software and professional services offering to our customers across North America,” said Dan Nettesheim, CEO of Barcodes.

2014 PEPD • Private Equity’s Leading News Magazine • 12-18-14

Peloton Equity invests in HealthPlanOne

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Peloton Equity has invested growth capital to acquire a majority stake in HealthPlanOne, a technology-enabled digital marketing firm specializing in Medicare and individual and family health insurance sales and distribution.  HealthPlanOne is the first investment made by newly-formed Peloton Equity.

HealthPlanOne operates two online health insurance marketplaces where consumers can search for, compare, and enroll in a health insurance plan.  In addition to serving consumers directly, HealthPlanOne also supplies digital leads to health insurance carriers and brokers. HealthPlanOne was founded by CEO Bill Stapleton in 2006 and is based in Shelton, CT (www.HealthPlanOne.com) (www.MedicareSolutions.com).

Peloton’s investment, which includes funding growth capital into the company, is the first by the firm since its launch in August of this year. “We have known Bill Stapleton and followed the company’s progress for many years and have been impressed by HealthPlanOne’s growth and the company’s ability to adapt to a changing market,” said Ted Lundberg, Partner at Peloton. “HealthPlanOne’s technology-enabled services allow health plans to reach members much more cost effectively, which will be critical in an increasingly consumer-driven industry.”

Mr. Stapleton along with the company’s management team will retain significant ownership in HealthPlanOne and will continue to lead the company.

“We are very excited to work with Peloton as we prepare for our next phase of growth. Peloton’s partners have excellent experience in building market leading healthcare companies and we look forward to leveraging their experience and broad network as we continue to grow the business,” said Mr. Stapleton.

Peloton Equity makes growth capital investments of $15 million to $30 million in lower middle market healthcare companies that have $20 million to $200 million in revenue and up to $10 million in EBITDA. Peloton was founded in August 2014 by former members of Ferrer Freeman & Co.  Prior investments made by the Peloton investment team include K2M, Genova Diagnostics, Vitalize Consulting Solutions, Preferred Care Partners and Webmedx.  The firm is led by its two partners Carlos Ferrer and Theodore Lundberg and is based in Greenwich, CT (www.pelotonequity.com).

2014 PEPD • Private Equity’s Leading News Magazine • 12-18-14

Propel Equity Partners Acquires Shrinky Dinks

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Alex Brands, a portfolio company of Propel Equity Partners, has acquired the Shrinky Dinks brand of toys.

Shrinky Dinks offers a variety of products and play patterns based upon plastic sheets that can be cut, colored and then shrunk and hardened into an endless amount of original designs.  Alex Brands has historically licensed the Shrinky Dinks brand for use in the Alex Toys product line.

Alex Brands is a family of brands owned by Propel Equity Partners that includes some of the most iconic brand names in the toy industry.  Owned brands include Alex Toys, Poof, Slinky, Scientific Explorer, Ideal, Zoob, Backyard Safari, Zillionz and CitiBlocs.  Alex Brands is based in Northvale, NJ (www.alexbrands.com).

“Our selection of Shrinky Dinks licensed kits has been an important and successful part of our product line,” said Neil Friedman, President and CEO of Alex Brands. “This acquisition is a great opportunity to further leverage the Shrinky Dinks brand and play pattern across many of our toy lines.”

Propel Equity Partners (formerly MCC Capital Partners) invests up to $50 million of equity in branded consumer products businesses with$10 million to $100 million of revenue and adjusted EBITDAs from $2 million to $20 million. The firm was founded in 2012 and is based in Greenwich, CT (www.propelequity.com).

2014 PEPD • Private Equity’s Leading News Magazine • 12-18-14

Rapper Rubenstein

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In September 2013 The Carlyle Group made a minority investment of $500 million in Beats Electronics, the audio brand co-founded by artist and producer Dr. Dre.  Then in August 2014, Apple acquired Beats for $3 billion in a cash and stock deal, marking the largest acquisition in the company’s history. Needless to say, it was a very profitable 11-month investment for The Carlyle Group.

To celebrate what may be the firm’s best transaction in 2014, the firm posted a Dr. Dre. themed holiday video to its website. The video features David Rubenstein, co-chief executive of Carlyle, rapping out a private equity themed beat.   If the private equity market were to turn soon, historians might look back at rapper Rubenstein and declare his rhyming repertoire as the turning point. As it is so often said, don’t quit your day job David.

Takes a lot of brains to do what we do.
Looking for a way to make some dough for you.
Energy, commodity, we do it all.
So pick up the phone and give us a call.
Corporate mezzanine, private equity, Carlyle Group is the place to be.
We’re global, we’re mobile, we’re aiming to please.
Only goal in mind is servin’ LPs… LPs… LPs, servin’ LPs……..

2014 PEPD • Private Equity’s Leading News Magazine • 12-18-14

SunTx Recaps Construction Partners, Distributes Cash

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Construction Partners, an infrastructure and road construction company and portfolio company of SunTx Capital Partners, has refinanced substantially all of the company’s existing debt and consolidated its borrowings into a simplified credit structure.  Proceeds from the consolidation will be used to fund a cash distribution to SunTx investors and to, of course, support the company’s continued growth.

ServisFirst Bank (www.servisfirstbank.com) and BBVA Compass (www.bbvacompass.com), both based in Birmingham, AL, provided revolving credit facilities, while a CIT (www.cit.com) led syndicate structured an asset-based term loan and capex facility. The financing also included a second-lien term loan from The Capitala Group (www.capitalagroup.com).

“We are pleased to have successfully refinanced and consolidated our credit facilities on favorable terms.  With a strong balance sheet and a streamlined credit structure, management is well positioned to continue growing the company through organic initiatives and strategic acquisitions,” said Charles Owens, President and CEO of Construction Partners.

Construction Partners acquires road construction companies with expertise in asphalt production, paving and other construction services for both the public and private sectors.  The company was founded in 2001 and operates as the corporate management group of the companies it acquires including Wiregrass Construction (Alabama), C.W. Roberts Contracting (Florida), Everett Dykes Grassing (Georgia) and Fred Smith Company (North Carolina). CPI is headquartered in Dothan, AL (www.constructionpartners.net).

“With an experienced management team and a dedicated work force operating in our nation’s fastest growing region, CPI continues to gain market share and strategically expands its operations,” said Ned Fleming, Managing Partner of SunTx Capital Partners.

SunTx Capital Partners invests in middle-market manufacturing, distribution and service companies. The firm was founded in 2001 and currently has over $600 million of assets under management. SunTx is headquartered in Dallas (www.suntx.com).

2014 PEPD • Private Equity’s Leading News Magazine • 12-18-14

CIT Leads $243 Million Financing for GI’s Buy

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CIT Group served as Joint Lead Arranger on a $243 million senior secured credit facility to support the acquisition of Kellermeyer Bergensons Services (KBS), a provider of contract cleaning services, by GI Partners. KBS was a portfolio company of Kohlberg & Company.

“We’re pleased to finance GI Partners’ acquisition of KBS, a company that has experienced uninterrupted growth over the last seven years,” said Tom Hobbis, Co-Head and Managing Director of CIT Sponsor Finance. “GI Partners realized the future growth potential of KBS, which serves as a leader in the retail-focused contract cleaning business.”

KBS was established in 2011 after the merger of Kellermeyer Building Services, which was founded in 1967, and Bergensons Property Services, founded in 1984. The company’s services include contract cleaning, porter services, parking lot maintenance, snow removal, landscaping, general repairs, and other trade and technical services.  The company serves the retail and grocery markets as well as education and healthcare.  KBS has over 300 customers in more than 15,000 customer locations in the United States, Canada, and Puerto Rico. The company has approximately 11,000 direct employees and also has a network of affiliated contractors.  KBS has headquarters in Oceanside, CA and Maumee, OH (www.kbs-clean.com).

GI Partners has previous experience in the facilities management services sector through its investment in The Linc Group, a provider of infrastructure and maintenance services, which was acquired by ABM Industries in 2010.

“We’ve had a longstanding relationship with the GI Partners team, and we are pleased to provide financing support for this new platform investment. KBS enjoys a high retention rate with its customers,” said Eric Toizer, Managing Director of CIT Sponsor Finance.  “Through the added support of a proven sponsor like GI Partners, KBS can further expand with ancillary services, such as landscaping and parking lot management, in both the retail sector and new markets.”

GI Partners invests from $50 million to $250 million in companies with enterprise values of $100 million to $750 million.  Sectors of interest include IT infrastructure & services; healthcare services; leisure & retail; and financial & real estate services.  Since founding, GI has managed $10 billion across four private equity funds and invested in 38 platform investments. The firm is based in Menlo Park (www.gipartners.com).

“KBS is the market leader in the highly-fragmented outsourced facilities services sector, with an estimated market share that significantly exceeds that of its next largest competitor. It’s a highly attractive company with a national scale, a broad suite of services, and a suite of technology-enabled offerings. With a track record of steady growth and a management team with significant experience and expertise, we’re pleased we can provide additional support to build on the company’s success,” said Hoon Cho, Managing Director at GI Partners.  “Through CIT’s sector expertise and understanding of the market, we were able to close this transaction smoothly and efficiently. We look forward to working with CIT on additional financings in the future.”

CIT Corporate Finance provides lending, leasing and other financial and advisory services to the small business and middle market sectors with a focus on specific industries, including: chemicals, commercial real estate, communications, energy, entertainment, gaming, healthcare, industrials, information services & technology, restaurants, retail, and sports & media (www.cit.com/corporatefinance). The corporate finance group is part of CIT, a bank holding company with more than $35 billion in assets. CIT was founded in 1908 and is based in New York (www.cit.com).

2014 PEPD • Private Equity’s Leading News Magazine • 12-18-14

Castanea Names New Partner

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Middle-market consumer focused private equity firm Castanea Partners has promoted Juan Marcos Hill to Partner. Mr. Marcos joined Castanea as an associate in 2002.

“Juan Marcos has been with Castanea since its inception and is a highly regarded member of our team. Over the years, he developed into an experienced private equity professional and we’re very excited to have him as a partner. Juan Marcos is involved in all aspects of middle market investing and has worked closely with many of Castanea’s portfolio companies,” said Brian Knez, a Managing Partner of Castanea.

Prior to joining Castanea, Mr. Marcos was with Bain & Company where he served clients in the consumer products, manufacturing, distribution, and telecommunications industries.  He has an MBA from Harvard Business School and a BS in Industrial Engineering from Georgia Tech.

Castanea Partners invests from $15 million to $75 million in companies that operate in the consumer brands, marketing services, and information services sectors. Castanea participates in leveraged buyouts, growth and acquisition equity investments, and operationally challenging situations. The firm is currently investing from its fourth fund, a $600 million fund that targets companies with enterprise values up to $250 million. Castanea is headquartered near Boston in Newton, MA (www.castaneapartners.com).

2014 PEPD • Private Equity’s Leading News Magazine • 12-18-14

Riverside Invests in Alcohol Monitoring Systems

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The Riverside Company has made a minority investment in Alcohol Monitoring Systems, a provider of electronic monitoring technologies used by state and local criminal justice agencies to monitor and manage alcohol use by criminal offenders.

Alcohol Monitoring Systems (AMS) offers a full suite of electronic monitoring products. Its SCRAM Continuous Alcohol Monitoring device is the industry’s leading transdermal continuous alcohol monitoring ankle bracelet, which monitors alcohol levels every 30 minutes. In 2013 the company launched the SCRAM Systems suite of electronic monitoring technologies, which includes GPS bracelets and remote breathalyzers.  The company was founded in 1997 and is headquartered south of Denver in Littleton, CO (www.scramsystems.com).

“We’re delighted to attract this investment from a proven firm like Riverside,” said AMS CEO Mike Iiams. “This partnership adds resources and skills to AMS that will accelerate our growth and allow us to serve more customers even more effectively.”

The US legal system processes hundreds of thousands of non-violent offenders annually who are ideally suited for electronic monitoring. AMS has been growing steadily as courts and state and local corrections departments recognize the effectiveness and cost-saving benefits of AMS’s products.

“Given that jails suffer from overcrowding, and there is a high daily cost to incarcerate, solutions for non-violent offenders will become increasingly attractive,” said Riverside Partner Michael Kessler. “AMS offers safe and effective devices and monitoring solutions that provide substantial savings when compared to incarceration.”

“We’re excited about working with the outstanding management team at AMS to capitalize on its great market position,” said Riverside Principal Jeffrey Gordon. “AMS has a compelling value proposition and together we expect to grow the company significantly.”

Working with Messrs. Kessler and Gordon on the transaction for Riverside was Vice President Jay Reynolds.  Riverside was advised by Jones Day, Deloitte and Liberty Advisor Group. Stephens acted as the exclusive financial advisor to Alcohol Monitoring Systems.

The Riverside Company is a global private equity firm focused on investing in and acquiring growing businesses valued at up to $250 million (€200 million in Europe). Since its founding in 1988, Riverside has invested in more than 370 transactions. The firm’s international portfolio includes more than 75 companies. Riverside is headquartered in New York with additional offices in Atlanta, Chicago, Cleveland, Dallas, Los Angeles, San Francisco, and London (www.riversidecompany.com).

2014 PEPD • Private Equity’s Leading News Magazine • 12-17-14

Partners Group to Acquire Dynacast

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Partners Group has signed an agreement to acquire a controlling stake in Dynacast International, a precision die caster and metal injection molder, at an enterprise value of $1.1 billion. Partners Group is joined in the acquisition by Kenner & Company, an existing shareholder, and the company’s management team, which will both roll over significant equity stakes into the new transaction which is expected to close in February 2015.

Dynacast is being acquired by Partners Group from a consortium of investors that purchased the company in 2011. The consortium includes Izurium Capital Management, W Capital Partners, Laurel Crown Partners, Kenner & Company, Babson Capital Management, Macquarie Capital and members of the management team.

Dynacast is a manufacturer of engineered metal components using precision die-casting and metal injection molding technologies to produce customized, high-volume components with complex shapes and tight tolerances. The company’s products are used in the automotive, telecommunications, computing, consumer electronics, and healthcare industries. Dynacast is headquartered in Charlotte, NC and has 23 manufacturing plants in 16 countries worldwide (www.dynacast.com).

“Dynacast has a long and rich history of continuously refining our proprietary manufacturing technologies, in-house tooling expertise and innovative design processes to manufacture highly complex metal components in a fast, repeatable and precise manner to provide greater value to our customers,” said Simon Newman, Dynacast’s Chief Executive Officer.  “With the investment led by Partners Group, we have the strategic support and capital backing to enter into the next phase of growth for our company.”

Partners Group is a global private markets investment management firm with over $40 billion of assets under management in private equity, private real estate, private infrastructure and private debt. The firm is headquartered in Zug, Switzerland, and has over 700 employees across 18 offices around the globe (www.partnersgroup.com).

“We are really looking forward to working with Simon and the rest of Dynacast’s management team in this next stage of the company’s development,” said Joel Schwartz, Managing Director at Partners Group in New York.  “Dynacast already has a truly differentiated position as a global supplier in the precision metal components marketplace and we see exciting potential for further expansion. We believe our global platform and deep network of industry relationships make us the ideal partner to back management’s vision for the business going forward, particularly through our assistance with acquisitions and with the deepening of the company’s integrated, worldwide approach.”

The transaction has fully committed financing from JPMorgan Chase Bank, Barclays and Macquarie Capital.  J.P. Morgan Securities, Barclays, Macquarie Capital, Goodwin Procter and KPMG are advising Partners Group on the transaction.

Morgan Stanley and Co. served as exclusive financial advisor to Dynacast while Hunton & Williams and Davis Polk & Wardwell served as legal counsel to Dynacast.

2014 PEPD • Private Equity’s Leading News Magazine • 12-17-14

Hastings Acquires Select Chemicals

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WadeCo Specialties, a specialty chemical provider and a portfolio company of Hastings Equity Partners, has acquired Select Chemicals.  Hastings first invested in WadeCo Specialties in May 2014.

Select Chemicals (DBA Select Technologies) provides production chemicals and services to exploration and production companies throughout the Eagle Ford Shale.  The Eagle Ford Shale is an organic matter-rich sedimentary rock formation underlying much of South Texas.  Due to the sloping nature of the formation, the shale reaches the surface in North Texas while the oil-bearing portion is much deeper in South Texas where the drilling activity occurs.  Select Chemicals was acquired by Stephen Blaschke in 1994 and is based southeast of San Antonio in Yorktown, TX (www.selectchemicalsltd.com).

WadeCo Specialties is an oilfield production chemical company that formulates, blends and distributes chemicals to oil and gas production companies to support drilling, completion and production activities throughout the Permian and Delaware Basins.  The Permian and Delaware Basins are large sedimentary basins located in western Texas and southeastern New Mexico.  WadeCo Specialties is based in Midland, TX (www.wadecospecialties.com).

“Select started as a soap stick business over thirty-six years ago and now operates out of a forty thousand square foot chemical plant and facilities in the South Texas region,” said Owner & President Stephen Blaschke. “We are looking forward to working with the WadeCo team to continue that expansion.”

Hastings Equity Partners invests from $5 million to $20 million in lower, middle-market energy services and equipment businesses that have EBITDAs from $4 million to $15 million. The firm has offices in Needham, MA and Houston, TX (www.hastingsequity.com).

“We are excited about the opportunities for growth that the acquisition of Select provides to WadeCo,” said Ryan Havens, President of WadeCo Specialties.  “Their experienced team and geographic coverage will enhance our ability to offer customers the best in both product and service. I look forward to working with Stephen Blaschke and his team to continue growing our business.”

Edwards Wildman Palmer served as legal counsel to the shareholders of WadeCo in the transaction.

2014 PEPD • Private Equity’s Leading News Magazine • 12-17-14

BackBay Adds Private Equity Pro to Team

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BackBay Communications, a public relations, branding and marketing firm with a specialty in private equity, has hired Ken MacFadyen as an Account Director.  Mr. MacFadyen’s responsibilities include strategic communications, content development and media relations.

Mr. MacFadyen has an extensive background in finance and private equity.  Prior to recent positions in speechwriting and investor relations at Panera Bread and The TJX Companies, he spent over a decade in publishing, covering M&A, leveraged finance, private equity and other alternative asset categories. He served as the editor in chief at Mergers & Acquisitions and prior to that served in senior editorial roles at Investment Dealers’ Digest and Buyouts magazine. He holds a BA in English from The University of New Hampshire.

“We have known Ken for many years and have always been impressed with his financial services knowledge, writing ability and strategic mindset,” said Bill Haynes, President of BackBay Communications. “Ken is quickly making a mark in providing our clients with strategic counsel and integrated marketing services.”

BackBay Communications is an integrated branding, marketing, advertising and public relations firm focused on the financial services sector including private equity firms, hedge funds, asset managers, investment advisors, financial technology companies, mutual funds and banks. BackBay takes a brand-centric approach to developing messaging and building integrated communications programs. The firm’s services include public relations, branding, website development, marketing plans and materials, videos, advertising and social media. BackBay is led by its President Bill Haynes and is based in Boston (www.BackBayCommunications.com).

2014 PEPD • Private Equity’s Leading News Magazine • 12-17-14

Babson Backs Kohlberg’s Buy of PPV

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Babson Capital Management has provided a senior secured credit facility to support the acquisition last month of PPC Industries by Kohlberg & Company.

PPC Industries, a portfolio company of AEA since March 2006, is a maker of tubing, film and bags using engineered plastic resins. The company’s products are used in niche segments of the medical, pharmaceutical, food, and industrial markets.  PPC is headquartered south of Milwaukee in Pleasant Prairie, WI and employs more than 500 people at seven factories in the United States, Costa Rica, Ireland and Malaysia (www.ppcind.com) (www.kelpacmedical.com).

“Babson places great value on our longtime association with Kohlberg & Company, and we are grateful for the opportunity to partner with Kohlberg on the investment in PPC Industries,” said Ian Fowler, Managing Director and co-head of Babson’s US Private Finance Group. “As an existing lender, we have been pleased with the company’s growth and performance and we look forward to continuing to support PPC Industries as it partners with Kohlberg & Company.”  Babson was an existing lender to PPC Industries through a 2006 investment backing AEA’s acquisition of the company.

Babson Capital has $206 billion in assets under management and is a member of the MassMutual Financial Group. The firm has offices in Boston and Springfield, MA; New York, Chicago, Charlotte and Los Angeles, and nine other offices in Europe, Asia and Australia (www.BabsonCapital.com).

Kohlberg & Company invests in companies in the industrial manufacturing; consumer products; business services; healthcare services; and financial services sectors. The firm concentrates on transactions with EBITDAs between $20 million and $100 million where it can invest between $50 million and $200 million of equity. Kohlberg & Company is currently investing its seventh private equity fund, Kohlberg Investors VII. The firm was founded in 1987 and is based in Mt. Kisco, NY (www.kohlberg.com).

2014 PEPD • Private Equity’s Leading News Magazine • 12-17-14

Audax and CapStreet Sell Distribution International to Advent

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The roll-up of the mechanical insulation distribution industry continues but the players names have changed as Audax Private Equity and The CapStreet Group have agreed to sell the majority of their shares in Distribution International to Advent International. Audax will retain a minority equity position in the company and remain on the Board of Directors.

Distribution International (DI) is a distributor of thermal and acoustical insulation and related supplies.  The company has 64 branch locations and serves customers in the commercial building, chemicals, energy, power, railcar and marine end markets. Most of DI’s sales are derived from ongoing maintenance and repair spending in industrial installations and commercial buildings.  DI was founded in 1986 and is headquartered in Houston (www.distributionintl.com).

Audax and Capstreet acquired DI in August 2010 from Grey Mountain Partners. During their term of ownership, DI’s EBITDA grew more than 3.5 times driven by market growth, share gains, and add-on acquisitions. Organic growth was spurred by a new executive management team that drove operational improvements through pricing, procurement, and sales force optimization initiatives. Eleven add-on acquisitions helped to solidify DI’s competitive footprint in the Gulf Coast and expand its reach into the Northeast, Midwest and Western US and Eastern and Western Canada.

“DI is the leader in the mechanical insulation market, which is poised for continued strong growth, as it benefits from a nascent recovery in commercial construction and significant planned capital investments in the downstream petrochemical industry,” said Stephen Hoffmeister, a Managing Director at Advent. “In addition to taking advantage of the market growth, the Advent team is excited to support DI’s ongoing acquisition program and expansion into complementary products offerings and new geographies.”

Upon closing of the transaction, Advent is adding two of its industry advisors, Wes Clark and Chip Hornsby, to the DI Board of Directors.  Mr. Clark is the former President of W.W. Grainger, and presently Chairman of Morsco and Director of ABC Supply. Mr. Hornsby is the former CEO of Wolseley, Plc and current CEO of Morsco.

Advent International focuses on buyouts and strategic restructuring opportunities in five sectors: business and financial services; healthcare; industrial; retail, consumer and leisure; and technology, media and telecom.  Advent has offices in 16 countries and employs 170 investment professionals across Western and Central Europe, North America, Latin America and Asia. Founded in 1984 and headquartered in Boston, Advent has $34 billion in assets under management and has completed more than 290 buyout and private equity transactions (www.adventinternational.com).

The Audax Group makes control investments of $10 million to $100 million in middle market companies with transaction values of $25 million to $500 million. Audax has over $5 billion in assets under management in its private equity, mezzanine, and senior debt businesses. The firm was founded in 1999 and has offices in Boston and New York (www.audaxgroup.com).

CapStreet makes control investments in privately held, lower middle market companies that are headquartered in Texas and surrounding states. CapStreet targets industrial and diversified business service companies that have annual EBITDA between $5 million and $20 million.  Since the firm’s founding in 1990, CapStreet has invested in 35 platform companies.  The firm is headquartered in Houston (www.capstreet.com).

Harris Williams & Co. (www.harriswilliams.com) was the exclusive financial advisor to Distribution International.  The transaction was led by Bob Baltimore, Tim Webb, Chris Williams, Marshall Croft and Taylor Morris of Harris Williams & Co.’s Richmond office.

“Audax Private Equity, CapStreet and DI’s management have built an exceptional platform with an industry leading product offering and a demonstrated resiliency across economic cycles,” said Mr. Baltimore, a managing director at Harris Williams & Co. “It was an absolute pleasure working with the management team, and we look forward to watching the company’s continued success.”

“We are thrilled to have Advent as our equity sponsor, as we continue to invest for growth and expand our industry-leading position,” said Celeste Mastin, Chief Executive Officer of DI. “DI has grown significantly over the past several years and the added resources and industry experience the Advent team brings to bear will help us to accelerate our growth ambitions.”

2014 PEPD • Private Equity’s Leading News Magazine • 12-16-14

RLJ Equity and Brookside Acquire MarketCast

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RLJ Equity Partners has acquired MarketCast, a provider of marketing research services for the entertainment industry and a portfolio company of Shamrock Capital Advisors since June 2012.  Brookside Mezzanine Partners participated with RLJ through a subordinated debt and an equity co-investment.

MarketCast works with marketers and researchers at major motion picture studio and production companies to develop and execute marketing strategies.  MarketCast services are available worldwide and include materials testing (trailers, TV spots, print ads, etc.), concept and positioning studies, exit polls, recruited audience screenings, tracking studies, and focus groups. Other services include brand and franchise studies, title tests, post-release studies, and attitudes and usage studies. MarketCast was founded in Boston in the late 1980s by three sociology professors – Joseph Helfgot, Frank Romo, and Michael Schwartz.  Today, the company is headquartered in Los Angeles with offices in New York, Boston and London (www.mcast.com).

RLJ Equity Partners invests from $15 million to $30 million in companies valued between $50 million and $250 million. Target companies will have operating profits greater than $7 million and operating margins greater than 10%.  Sectors of interest include aerospace & defense; auto & transportation; business services; consumer retail; general industrial; and media & telecom.  RLJ Equity Partners was founded in 2006 by Robert L. Johnson in partnership with The Carlyle Group. The firm is headquartered in Bethesda, MD (www.rljequitypartners.com).

Brookside Mezzanine Partners is a provider of subordinated debt and minority equity capital to small and mid-sized companies throughout the United States. The firm invests in both sponsored and non-sponsored transactions and provides junior capital and unitranche financing to support buyouts, leveraged recapitalizations, strategic acquisitions, dividends and growth capital.  Brookside will invest up to $20 million per transaction, with the resources to complete larger transactions as well.  Brookside was founded in 2001 and has offices in Stamford, CT and Boston, MA (www.brooksidemp.com).

2014 PEPD • Private Equity’s Leading News Magazine • 12-16-14

CD&R Completes Investment in CHC Group

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Clayton, Dubilier & Rice has completed its investment in CHC Group, a commercial operator of helicopters.  CHC plans to use proceeds from the investment primarily to reduce debt and other fixed charges.

CHC Group provides helicopter flight services to oil and gas companies and government search-and-rescue agencies. The company also provides helicopter maintenance, repair and overhaul services through its Heli-One segment. CHC Group operates 233 aircraft in about 30 countries around the world and is headquartered in Richmond, BC (www.chc.ca).

With the closing of the transaction, CD&R Operating Partner John Krenicki, a former vice chairman of General Electric and president and chief executive officer of GE Energy, will become chairman of the board of CHC. CD&R will also appoint three additional members to CHC’s board.

“CHC’s ability to serve its customers globally and its record of safety, reliability and aircraft availability set it apart from other companies,” said Mr. Krenicki. “We are excited about the opportunity to work with management to continue this focus on safety and customer service and to build on the company’s strong competitive position.”

CD&R will have a 45-percent ownership position in CHC Group on an as-converted.  First Reserve Corporation, which purchased CHC in 2008, will retain approximately 29-percent ownership in CHC.

Clayton, Dubilier & Rice focuses on producing financial returns through building stronger more profitable businesses. Since inception, the firm has managed the investment of more than $19 billion in 62 businesses representing a range of industries with an aggregate transaction value of approximately $90 billion. Founded in 1978, Clayton, Dubilier & Rice is based in New York and London (www.cdr-inc.com).

First Reserve is a private equity firm with a focus on the energy industry.  First Reserve has completed more than 475 transactions (including platform investments and add-on acquisitions) on six continents. Its portfolio companies operate in approximately 50 countries and span the energy spectrum from upstream oil and gas to midstream and downstream, including resources, equipment and services and infrastructure. The firm was founded in 1983 and has offices in Houston, TX; Greenwich, CT; London, UK and Hong Kong (www.firstreserve.com).

2014 PEPD • Private Equity’s Leading News Magazine • 12-16-14

BC Partners to Acquire PetSmart

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PetSmart has entered into an agreement to be acquired by an investment consortium led by BC Partners.  The transaction is valued at approximately $8.7 billion, representing a 9.1x multiple of PetSmart’s adjusted EBITDA for the twelve months ending November 2, 2014.  The consortium includes BC Partners, La Caisse de dépôt et placement du Québec, and StepStone. Longview Asset Management, which owns approximately 9% of PetSmart’s outstanding shares, has committed to vote in favor of the transaction.  The transaction is expected to close in the first half of 2015.

“We are very pleased to add PetSmart to our portfolio of investments. PetSmart is an iconic brand and the category leader in the growing pet retail industry. We look forward to working with management to continue growing PetSmart’s business and executing against its recently announced strategic initiatives,” said Raymond Svider, a Managing Partner at BC Partners.

PetSmart (NASDAQ: PETM) is the largest specialty retailer of pet products and services. The company has approximately 54,000 employees and operates approximately 1,387 pet stores in the United States, Canada and Puerto Rico and approximately 201 in-store PetSmart® PetsHotel® dog and cat boarding facilities. The company is headquartered in Phoenix (www.petsmart.com).

BC Partners has €12 billion of capital under management and invests in companies in a variety of sectors that have significant European operations. The firm was founded in 1986 and has offices in London, Paris, Hamburg and New York (www.bcpartners.com).

“We are pleased to have reached this agreement with BC Partners, which maximizes value for all of our shareholders and best positions PetSmart to continue to meet the needs of pet parents,” said Gregory Josefowicz, Chairman of PetSmart. “This transaction represents the successful conclusion of our extensive review of strategic alternatives.”

The consortium has received fully committed debt financing in connection with the transaction from Citigroup, Nomura, Jefferies, Barclays and Deutsche Bank.

J.P. Morgan Securities is serving as the exclusive financial advisor to the company, and Wachtell, Lipton, Rosen & Katz is serving as the company’s legal advisor. BC Partners and its consortium investors were advised by Simpson Thacher & Bartlett and Ernst & Young. Longview was represented by Skadden, Arps, Slate, Meagher & Flom.

2014 PEPD • Private Equity’s Leading News Magazine • 12-16-14

Breakwater Names New Chairman and Co-Managing Partner

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Eric Beckman, a former Senior Partner at Ares Management, will join Breakwater Investment Management as Chairman and Co-Managing Partner.  In this new role, Mr. Beckman will guide the strategic expansion of Breakwater’s private debt and private equity investment platform.  He will manage the firm alongside Saif Mansour, Breakwater’s Founder and other Co-Managing Partner, and will also serve as Chairman of the firm’s investment committees.

“As a longtime friend of Saif’s, I’ve watched him develop Breakwater into a dynamic and growing asset manager.  After a rewarding career in large financial organizations, I’m excited to apply my experience to help take the firm to the next level,” said Mr. Beckman.  “Through both credit and equity funds, we intend to make Breakwater a one-stop capital solution provider for the lower middle market.”

Mr. Beckman’s background includes a distinguished 20-year career at Ares Management and Goldman Sachs.  During his time at Ares from 1998 through 2013, he was a Senior Partner in both the Private Equity and Direct Lending groups, as the firm’s committed capital grew from approximately $1.2 billion to approximately $74.0 billion.  In these roles, Mr. Beckman led and managed investments in private companies across several industries and through changing economic conditions.  He was a member of multiple investment committees for both private and publicly traded Ares investment vehicles, and served as an Executive Vice President of Ares Capital Corporation.  Prior to joining Ares, Mr. Beckman worked in the Investment Banking Division of Goldman Sachs, in its Leveraged Finance Group.

“I feel honored that Eric has decided to join Breakwater. Since we first met, I’ve admired his integrity, discipline, track record and depth of experience in private company investing.  Eric has had an outstanding career in finance, and with his vision and leadership, Breakwater is positioned for exciting growth and continued success,” said Saif Mansour.

Breakwater Investment Management specializes in direct investments in small to lower middle market growth businesses with annual sales ranging from $5 million to $100 million. The firm serves as general partner of Breakwater Structured Growth Opportunities Fund, a $100 million open-ended private investment partnership formed in August 2008. The fund’s investment objective is to generate both current income and capital appreciation through secured debt investments accompanied with equity participation rights, primarily in growth-oriented companies across a variety of industries.  Breakwater is based in Los Angeles (www.breakwaterfunds.com).

Breakwater has been actively adding new professionals to it team. Last month, consumer retail executive Deborah Benton join the firm as a Partner.  Ms. Benton previously was the President and COO of Nasty Gal, an online women’s fashion retailer that targets the millennials market.  

2014 PEPD • Private Equity’s Leading News Magazine • 12-16-14