Archives for January 31, 2014

Glencoe Capital Buys Dialogue Marketing, Merges with Budco and NOVO1

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Glencoe Capital’s Michigan Opportunities Fund, has made an investment in Dialogue Marketing, a provider of customer engagement services.

Dialogue Marketing provides customer engagement services including predictive analytics, CRM, social media, lead generation, customer care, inside sales support, and order fulfillment services. The company is headquartered in Troy, MI and has four other locations in the US and one in Costa Rica with a combined workforce of 1,300 employees (www.Dialog-Marketing.com).

With the close of the acquisition, Dialogue Marketing will be combined with Glencoe’s existing marketing services and customer care businesses, Budco and NOVO 1, which were merged last year into a new entity called Dialog Direct (www.Dialog-Direct.com).

Ron Risher, the current Executive Chairman and CEO of Budco, has been named Executive Chairman and CEO of Dialog Direct. The total revenue of the three combined entities exceeds $200 million annually and has 4,100 employees in 12 operating facilities in the US and one in Costa Rica serving Latin America. The new organization will be headquartered in the Detroit suburb of Highland Park where Budco is presently headquartered.

Budco is a business process outsourcing company providing technology- enabled marketing services to the automotive, pharmaceutical, healthcare, retail, travel, leisure and consumer packaged goods sectors. The company was founded in 1982 and is based in the Detroit suburb of Highland Park. Glencoe Capital acquired the company in November 2011 (www.budco.com).

NOVO 1 is a provider of inbound customer contact services. The company serves a range of sectors through its call centers in Texas, Montana, Michigan and Wisconsin. Call center services include product support, customer retention, program enrollment, appointment setting, and sales. NOVO 1 was founded in 1984 and is headquartered in Fort Worth, TX. Glencoe Capital acquired the company in March 2010 (www.novo1.com).

“We are excited to fully integrate the collective strengths of these high-performing companies,” said Doug Kearney, Principal of Glencoe Capital. “Based upon their similar cultures and industry vertical expertise, we are confident that the organization will quickly demonstrate expanded service potential to both existing and new clients. The deal increases capacity, enhances capabilities and provides additional competitive differentiation for our company, particularly in the areas of big data, predictive analytics and social media.”

Glencoe Capital makes acquisitions and growth equity investments in lower-middle market companies that have EBITDAs between $3 million and $15 million. The firm has completed over 45 acquisitions, representing over $ 1.6 billion in transaction value. The firm currently manages three funds: the Glencoe Capital Michigan Opportunities Fund, Glencoe Capital Partners III, and Glencoe Capital Partners II. Founded in 1993, Glencoe Capital has offices in Chicago and in the Detroit suburb of Birmingham (www.glencap.com).

“Dialogue Marketing’s sophisticated analytics and customer interaction strategies blend perfectly with NOVO 1’s customer care solutions and Budco’s technology-enabled marketing solutions. By joining forces we bring together industry thought-leadership and proprietary technology to be leveraged between companies, supported by a passionate and innovative culture,” said Mr. Kearney.

© 2014 PEPD • Private Equity’s Leading News Magazine • 1-31-14

Wasserstein & Co. Acquires Recorded Books

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Wasserstein & Co. has acquired the assets of Recorded Books, a provider of unabridged audiobooks and digital content, from Haights Cross Communications. Northwestern Mutual and Lexington Partners are co-investing in the transaction with Wasserstein & Co.

Recorded Books is a publisher of unabridged audiobooks and a provider of digital content to the library, school, and retail markets. The company owns an exclusive catalog of over 13,500 audiobook titles narrated by professional, award-winning actors. Recorded Books provides digital audiobooks and eBooks to libraries through its OneClick Digital platform, as well as electronic resources, including digital magazines and films, through its RBdigital Gateway platform. The president and CEO of Recorded Books is Rich Freese. The company was founded in 1979 and is headquartered in Prince Frederick, MD with additional offices in the UK and Australia (www.recordedbooks.com).

“Recorded Books is a premier audiobook publisher, drawing from the days when it pioneered the industry over thirty years ago,” said Anup Bagaria, Co-Managing Partner of Wasserstein & Co. “With a proven management team, a portfolio of high quality exclusive content, and proprietary technology, Recorded Books is well-positioned to capitalize on the shift from physical audiobook formats to digital content. We look forward to working closely with the Recorded Books team as it continues to build on its long-standing customer relationships and track record of strong growth.”

Wasserstein & Co. is focused primarily on leveraged buyout investments and related investment activities in the media, consumer products and water equipment and services industries. The firm has offices in New York and Los Angeles. The investment in Recorded Books was made through the firm’s third investment fund, Wasserstein Partners III (www.wasserco.com).
Financing for the transaction was provided by BNP Paribas. Berkery, Noyes & Co. acted as financial advisor to Haights Cross and Recorded Books.

“It was a pleasure working with the team at Haights Cross and Berkery, Noyes & Co. to complete this transaction.,” said Michael Struble, Managing Director of Wasserstein & Co. “We’re thrilled to be acquiring a business with great prospects in both the library and retail markets and to partner with the Recorded Books team during this next phase of growth.”

Haights Cross Communications is an educational and library publisher of books, periodicals, software, and online services, serving the following markets: K-12 supplemental education, public and school libraries, and consumers. Haights Cross companies include: Triumph Learning, Buckle Down Publishing and Options Publishing. The company was founded in 1997 and is based in New York (www.haightscross.com).

“With their world-class digital platform and new eBook offering rapidly gaining momentum, the timing is perfect for Recorded Books to be joining a quality, growth-oriented private equity firm like Wasserstein & Co. We wish them all every success,” said Rick Noble, CEO of Haights Cross Communications.

© 2014 PEPD • Private Equity’s Leading News Magazine • 1-31-14

Transition Capital Partners Exits LT Energy Services

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Transition Capital Partners (TCP) has closed the sale of its portfolio company, LT Energy Services, to B/E Aerospace. The sales price of the transaction was not disclosed, but TCP acquired LT Energy Services in Aril 2012 for approximately 4x EBITDA and sold to B/E Aerospace for approximately 6x EBITDA.

LT Energy Services provides rental equipment and temporary office/housing systems to oil & gas producers. The company is based in Houston (www.ltenergyservices.com).

During the term of ownership, TCP grew LT by providing growth capital and strategic direction, while also strengthening the management team, internal systems and processes. As a result, the company expanded from 10 employees with one field location in the Haynesville Basin in Northern Louisiana, to more than 100 employees across five locations operating in three regions, including the Eagle Ford basin in South Texas and the Colony Granite Wash region in Oklahoma.

The sale of LT Energy Services to B/E Aerospace was led by TCP Managing Director Kevyn DeMartino and TCP Principal Jake Williams.

Transition Capital Partners invests in companies that have revenues under $50 million and are active in the energy, business services, niche manufacturing, consumer products, healthcare, and consumer finance sectors. The firm was founded by Dan Patterson in 1993 and is based in Dallas (www.tcplp.com).

Houlihan Lokey served as the exclusive sell-side financial advisor to LT Energy Services and Locke Lord acted as corporate legal counsel.

© 2014 PEPD • Private Equity’s Leading News Magazine • 1-31-14

Auda Closes Secondary Fund III Above Target

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Auda International has held a final close of Auda Secondary Fund III LP (ASF III) with limited partner commitments of $332 million. ASF III garnered significant interest from a range of investors and exceeded its original target of $300 million.

“We are pleased by the strong support from existing Auda investors, who represented over 60% of capital committed to ASF III,” said Ernest Boles, Auda’s Chief Executive Officer. “We are also pleased to have attracted 12 new institutional investors, from both Europe and the United States, totaling over 30% of ASF III’s committed capital. With nearly 25 years of experience in the private equity markets, Auda’s track record of balancing risk and return clearly resonates with a variety of global investors.”

A majority of the capital committed to ASF III came from institutional investors, including public and private pension funds, insurance companies, endowments, foundations and financial institutions, as well as from family offices and high net worth individuals.

Following in the steps of earlier funds, ASF III will focus on less competitive niches in the global secondary market, especially smaller and more complex transactions.

“The private equity secondary market has grown significantly in recent years. We believe Auda’s global, integrated platform, which combines primary fund investing, co-investing and secondaries, is a key driver of success in the current environment,” said Stephen Wesson, Auda’s head of global private equity. “Our focus on small to mid-size transactions and our ability to engineer creative liquidity solutions for both limited partners and general partners are also critical elements in our strategy.”

Auda International is an investment manager and advisor focused exclusively on private equity. The firm’s private equity investment vehicles include funds-of-funds, secondary funds-of-funds, direct co-investment funds, and separately managed accounts. Auda has investment teams in the United States, Europe and Asia and manages capital commitments of $5.3 billion. The firm was founded in 1989 and has offices in New York, London, Hong Kong, and Bad Homburg (Germany) (www.auda.com).

© 2014 PEPD • Private Equity’s Leading News Magazine • 1-31-14