Archives for January 21, 2014

Falcon Closes Fund IV Above Target

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Falcon Investment Advisors has held a final close of Falcon Strategic Partners IV, LP with $909.7 million of capital commitments, and above the fund’s original target of $850 million. Atlantic-Pacific Capital served as the exclusive global placement agent for the fund.

“We are pleased by the strong support that we received from investors. Atlantic-Pacific did a terrific job in helping to expand our LP base and raise global awareness of our unique value proposition in lower middle market investing,” said Christopher Thorsheim, Director of Investor Relations at Falcon.

Falcon Investment Advisors invests from $10 million to $75 million of subordinated debt and other junior capital in middle market companies to support management or leveraged buyouts, growth or acquisition capital, dividend recaps, generational transfers, structured finance and restructurings. Since its founding in 2000 by Sandeep Alva and William Kennedy, Falcon has invested in more than 50 companies in a range of industries. The firm has offices in Boston and New York (www.falconinvestments.com).

Atlantic‐Pacific Capital is a global placement agent and advisory firm dedicated to raising capital for alternative investments. Since 1995, the firm has executed over 70 capital raising assignments aggregating over $50 billion. Typical projects include private equity, real estate and infrastructure fund placements, as well as secondary advisory mandates and direct private placements. The firm has offices in New York, Greenwich, Chicago, San Francisco, London and Hong Kong (www.apcap.com).

“We are extremely honored to have successfully partnered with Falcon’s high quality and experienced team. Institutional investors responded very favorably to the firm’s differentiated strategy of creating unique and flexible capital solutions for middle market businesses to help them take advantage of strategic opportunities. Falcon’s track record of generating consistent and attractive risk-adjusted total returns across several cycles speaks for itself, and Fund IV is already off to a promising start,” said Brendan Edmonds, Partner at Atlantic-Pacific Capital.

© 2014 PEPD • Private Equity’s Leading News Magazine • 1-21-14

Maranon Capital Promotes and Hires

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Maranon Capital has promoted two of its professionals and added a new member to its administrative team.

Rommel Garcia has been promoted from Vice President to Principal. Mr. Garcia is responsible for evaluating new business opportunities along with transaction execution and portfolio management. Mr. Garcia joined Maranon in 2008 as an Associate. Prior to joining Maranon he worked at LaSalle Bank and JP Morgan Chase. Mr. Garcia has an MBA and an AB from the University of Chicago.

Angelica Mariscal has been promoted from Associate to Vice President of Marketing. She is responsible for developing and executing Maranon’s branding and communication strategies as well as market research and investor reporting. Ms. Mariscal joined Maranon in 2008 from American Capital Strategies. She has an MBA and a BS in Computer Information Systems from Dominican University.

Chad Kohorst has joined Maranon as a Senior Fund Accountant. He is responsible for financial planning, analysis and reporting. Prior to joining Maranon he was with Morgan Stanley and KPMG. Mr. Kohorst received both an MS as well as a BBA in Accountancy from the University of Notre Dame.

Maranon Capital provides senior financing, mezzanine debt and equity co-investments for private equity-backed and non-sponsored middle market transactions. The firm is currently managing over $1 billion of committed capital. In October of 2013, Maranon Capital held a final close of Maranon Senior Credit Fund II at its target level of $330 million. Maranon has offices in Chicago, IL; Birmingham, MI (near Detroit) and South Bend, IN (www.maranoncapital.com).

© 2014 PEPD • Private Equity’s Leading News Magazine • 1-21-14

KKR and Affinity Exit Oriental Brewery

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AB InBev has entered into an agreement with KKR and Affinity Equity Partners to acquire Oriental Brewery, a South Korea brewer, for $5.8 billion. The transaction is subject to regulatory approval in South Korea and is expected to close in the first half of 2014.

Oriental Brewery (OB) is South Korea’s largest beermaker. Brands include OB, Cass and Cafri. The company was founded in 1933 and is based in Seoul (www.ob.co.kr). OB will become a part of AB InBev’s Asia Pacific Zone, led by Zone President Michel Doukeris.

Oriental Brewery’s EBITDA in 2013 was 529 billion won ($497 million) compared with 238 billion won ($293 million) in 2009. This translates to a purchase multiple of approximately 6.1x in 2009 and a sale multiple 2014 of 11.7x.

KKR acquired Oriental Brewery from InBev in July 2009 for $1.8 billion. As part of that transaction, InBev had a five-year option to repurchase the company from KKR based on a formula driven EBITDA valuation. After closing the purchase, KKR then sold 50% of Oriental Brewery to Affinity Equity Partners.

The July 2009 sale of Oriental Brewery to KKR was part of an asset sale program initiated by InBev to pay down acquisition debt related to the company’s $52 billion purchase of Anheuser-Busch in 2008.

“We are proud to have partnered with Oriental Brewery these past five years,” said Joseph Bae, Managing Partner of KKR Asia and Kok Yew Tang, Chairman and Managing Partner of Affinity. “The success experienced since 2009 is a testament to all the employees of OB, and we are gratified to have invested in the company and supported the company’s growth as well as their environmental and citizenship initiatives.”

AB InBev is a Belgian-Brazilian multinational beverage and brewing company. It is the world’s largest brewer with nearly 25 percent global market share. The company has more than 200 brands which include Budweiser, Corona, Stella Artois, Beck’s, Lowenbrau, and Bud Light. The company employs around 116,000 people in over 30 countries and is headquartered in Leuven, Belgium (www.ab-inbev.com).

AB InBev will fund the acquisition of Oriental Brewery with internal resources.

KKR makes private equity, fixed income and other investments in companies in North America, Europe, Asia and the Middle East. The firm has $90 billion in assets under management. KKR was founded in 1976 and 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).

Affinity Equity Partners has $8 billion of assets under management and typically invests in companies with enterprise value or net sales of $100 million to $500 million that are located in Australia, Greater China, Hong Kong, Japan, Korea, Singapore and Taiwan. The firm is industry agnostic but has specific interest in consumer-related goods and services, value-added manufacturing, healthcare, financial services and business services sectors. Affinity Equity was formed in March 2004 following the spin-off by UBS AG of its UBS Capital Asia Pacific team. Affinity currently advises and manages approximately $8 billion of funds and assets, making it one of the largest independent private equity firms in the Asia region. Affinity has offices in Hong Kong, Singapore, Seoul, Sydney, Beijing and Jakarta (www.affinityequity.com).

© 2014 PEPD • Private Equity’s Leading News Magazine • 1-21-14

H.I.G. Capital Exits MagnaCare

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H.I.G. Capital has completed the sale of its portfolio company MagnaCare Holdings to Goldman Sachs, Pamplona Capital Management, and members of the company’s management team.

MagnaCare is a provider of third party administrator (TPA) health plan services to companies in the New York and New Jersey region. The company maintains a provider network of approximately 95,000 contracted physicians, hospitals and other healthcare providers. MagnaCare provides services to approximately 850,000 members and manages approximately $1.5 billion of annual health care expenses. The company is based in New York (www.magnacare.com).

After acquiring MagnaCare in 2010, H.I.G. invested resources in the company to augment its infrastructure and expand its service offering into the workers compensation and commercial markets. These efforts resulted in significant revenue and EBITDA growth during H.I.G.’s ownership.

“H.I.G. has been an outstanding and committed partner to the MagnaCare management team. Together, we established a clear strategic vision and made significant investments to build out and strengthen our provider network, enhance our corporate infrastructure, and introduce a wide range of new products and services to develop a comprehensive solution for the self-insured market,” said Joseph Berardo Jr., CEO and President of MagnaCare.

H.I.G. Capital specializes in providing capital to small and medium-sized companies and invests in management-led buyouts and recapitalizations of manufacturing or service businesses. H.I.G. Capital has more than $13 billion of capital under management. The firm was founded in 1993 and is based in Miami with additional offices in Atlanta, Boston, Chicago, Dallas, New York, San Francisco, London, Hamburg, Madrid, Paris, and Rio de Janeiro (www.higcapital.com).

“We have been very fortunate to be able to partner with Joe Berardo and the executive team at MagnaCare. They have successfully executed on a number of strategic initiatives and significantly grown the business over the course of our ownership,” said Tenno Tsai, Managing Director of H.I.G. “MagnaCare has been a successful investment for management, H.I.G. and our investors.”

Goldman Sachs is an investment banking, securities and investment management firm. The firm is headquartered in New York (www.gs.com).

Pamplona Capital Management is an investment manager that provides an alternative investment platform across private equity, fund of hedge funds and single manager hedge fund investments. Pamplona manages over $6 billion in assets for a variety of clients including public pension funds, international wealth managers, multinational corporations, family offices and funds of hedge funds. Pamplona is currently managing its third private equity fund, Pamplona Capital Partners III, which was raised in 2011 and has committed capital of $2.7 billion. The firm was founded in 2005 and is based in London and New York (www.pamplonafunds.com).

© 2014 PEPD • Private Equity’s Leading News Magazine • 1-21-14