February 3, 2014
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Archives for February 3, 2014

TPG Growth Acquires e.l.f. Cosmetics

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elf nfTPG Growth has acquired a majority stake in e.l.f. Cosmetics from the company’s founders and TSG Consumer Partners. Existing management will continue to have a meaningful investment in and an ongoing role with the company.

Eyes Lips Face, also known as e.l.f. Cosmetics, is an international cosmetics brand that was founded by Joseph Shamah and Scott Vincent Borba in 2004. The company sells products largely at $1, $3, and $5 price points. Products include bath and skin-care products, mineral-based makeup, professional tools, eyeliners, lipstick, glosses, blushes, bronzers, brushes, and mascara, among others. e.l.f. Cosmetics is based in New York (www.eyeslipsface.com).

“Through its differentiated approach, e.l.f.’s offering has resonated among a key segment of the cosmetics market,” said John Bailey, Principal at TPG Growth. “We believe that many opportunities lie ahead, and are happy to partner with e.l.f. to build the company and accelerate its already impressive growth trajectory.”

TPG Growth is the middle market and growth equity investment platform of TPG. With $3.6 billion under management, TPG Growth targets investments in a range of industries and geographies, utilizing leveraged buyout, growth equity, and private investment in public equity structures. The firm has offices in San Francisco, Ft. Worth, New York, Hong Kong, Beijing, Singapore and Mumbai (www.tpggrowth.com).

“Our team is proud of what we have built and are extremely excited to have a value-added partner like TPG Growth to help us scale the business,” said Joseph Shamah, co-founder of e.l.f. Cosmetics. “Their track record in building consumer businesses, international distribution relationships, e-commerce capabilities, global operational resources and access to incremental talent make them an ideally suited partner for our company.”

TSG Consumer Partners makes control and non-control investments of $15 million to $100 million in companies with EBITDAs of $3 million to $50 million where there is an opportunity to enhance value by extending brand, expanding distribution and/or improving operations. Since its founding in 1987, TSG has been an active investor in the food, beverage, restaurant, beauty, personal care, household and apparel & accessories sectors. The firm has $2.9 billion in equity capital under management and is headquartered in San Francisco (www.tsgconsumer.com).

“The growth of e.l.f. Cosmetics has been phenomenal, and TSG is fortunate to have been partnered with such an exciting company,” said Jennifer Baxter Moser, Managing Director at TSG Consumer Partners. “We look forward to watching the brand continue to grow and develop in the future.”

Financo (www.financo.com) served as exclusive financial advisor to e.l.f. Cosmetics and TSG Consumer Partners.

© 2014 PEPD • Private Equity’s Leading News Magazine • 2-3-14

Grey Mountain Acquires Dimex

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dimex nfGrey Mountain Partners has acquired Dimex, a manufacturer of plastic extruded products. Brookside Mezzanine Partners provided subordinated debt and equity financing to support the acquisition.

Dimex is a manufacturer of plastic extruded products used in a variety set of end markets such as industrial matting, landscaping, marine products, masonry construction and office chair mats. Products are manufactured using polyethylene, rigid and flexible polyvinyl chloride or EPDM (ethylene propylene diene monomer) rubber. The company was founded in 1991 and operates a 200,000 square foot manufacturing facility at its headquarters in Marietta, OH (www.dimexcorp.com). Dimex is led by its CEO David Wesel.

“We are thrilled to partner with David and the Dimex leadership team,” said Jason Urband, Vice President with Grey Mountain. “The company is a leader in several end markets and has developed a reputation for quality products and unmatched customer service. We look forward to supporting the growth of the business organically and through strategic acquisitions.”

Grey Mountain Partners invests up to $75 million in control acquisitions of companies with enterprise values between $30 million and $150 million. Sectors of interest include aerospace & defense, building products & materials, business process outsourcing, diversified manufacturing, energy & power, financial services, food & beverage, healthcare services & technology, industrial services, packaging, professional services, specialty chemicals, technology, transportation & logistics, wholesale and distribution. Grey Mountain was founded in 2003 by Managing Partners Rob Wright and Jeff Kuo and is based in Boulder with an additional office in Minneapolis (www.greymountain.com).

Brookside Mezzanine Partners provides subordinated debt and minority equity to small and mid-sized companies. Target companies generally have trailing twelve month revenue of at least $15 million and EBITDA of at least $3 million. The firm was founded in 2001 and has offices in Stamford, CT and Boston, MA (www.brooksidemezzanine.com).

“Dimex has a strong team of talented employees and everyone is extremely excited about the company’s future. Grey Mountain’s financial and operational support will allow us to continue to grow the company and maintain our outstanding customer service,” said Dimex’ CEO David Wesel.

© 2014 PEPD • Private Equity’s Leading News Magazine • 2-3-14

Kinderhook Acquires GlobalHealth

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globalhealth nfKinderhook Industries has acquired GlobalHealth, an Oklahoma health maintenance organization (HMO). GlobalHealth is Kinderhook’s seventh healthcare platform investment and eighteenth purchase in the healthcare services space, including add-on acquisitions.

GlobalHealth is an HMO serving over 40,000 individuals, employers, Medicare beneficiaries, federal employees, and state, education and municipal government employees, in Oklahoma. GlobalHealth is one of five companies offering health plan options on the Federal Healthcare Marketplace in Oklahoma. The company is headquartered in Oklahoma City and has an additional office in Tulsa (www.globalhealth.com).

“We are excited about our new partnership with Kinderhook which will enable us to expand our affordable health plans to more citizens in Oklahoma,” said Scott Vaughn, CEO of GlobalHealth. “Our mission is to make quality healthcare more affordable for the communities we serve. The Kinderhook team shares our strategic vision of bringing our unique healthcare delivery model to more Oklahomans and creating more consumer choices in the marketplace.”

Kinderhook Industries makes control investments in companies with transaction values of $10 million to $75 million in which the firm can achieve financial, operational and growth improvements. The firm pursues private equity investments in non-core divisions of public companies, management buyouts of entrepreneurial-owned businesses, troubled situations and existing small capitalization companies lacking institutional support. The firm, founded in 2003, has $770 million of committed capital and is based in New York (www.kinderhook.com).

michalik nf2“Under Scott’s leadership, GlobalHealth has served its members very well and has made great strides toward bending the healthcare cost curve through its common sense approach to healthcare delivery,” said Chris Michalik, Managing Director at Kinderhook. “The combination of GlobalHealth’s unique delivery model and the significant changes to the US healthcare industry creates a tremendous opportunity for GlobalHealth to offer affordable health plans to more citizens in Oklahoma. We are very excited to partner with Scott and his management team and to accelerate the success of GlobalHealth.”

Allegiance Capital Corporation (www.allcapcorp.com) served as financial adviser to GlobalHealth.

© 2014 PEPD • Private Equity’s Leading News Magazine • 2-3-14

Thoma Bravo Invests in Segall Bryant & Hamill

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thoma nfThoma Bravo has completed its investment in Segall Bryant & Hamill, an investment management firm.

“We are pleased to finalize our investment in Segall Bryant & Hamill,” said Carl Thoma, managing partner at Thoma Bravo. “We believe in their business – they’ve built a 20-year track record of success by recruiting experienced professionals and exceeding their clients’ expectations – and we look forward to partnering with management to help them continue to prosper.”

sbh nfSegall Bryant & Hamill is an independent, employee-owned investment management. The firm provides management of equity and fixed income investments for institutional and private clients in the United States and abroad. Segall Bryant & Hamill has assets under management in excess of $9 billion. The firm was founded in 1994 and is headquartered in Chicago (www.sbhic.com).

“This investment in our business is a testament to our accomplished team of investment professionals and the consistent results we’ve provided for our clients,” said Philip Hildebrandt, the company’s chief executive officer. “Having the support of a partner like Thoma Bravo, a firm with a history of growing industry-leading companies, will allow us to grow and continue to help our institutional and private clients achieve their investment goals.”

Thoma Bravo provides equity and strategic support to management teams building growing companies. The firm originated the concept of industry consolidation investing, which seeks to create value through the strategic use of acquisitions to accelerate business growth. Thoma Bravo currently manages approximately $4 billion of equity capital. The firm was founded in 1981 and has offices in Chicago and San Francisco (www.thomabravo.com).

© 2014 PEPD • Private Equity’s Leading News Magazine • 2-3-14

Brookside Closes Third Mezz Fund above Target

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brookside nfBrookside Mezzanine Partners has closed its third fund, Brookside Mezzanine Fund III, LP (Fund III), at $250 million which was just above its target of $225 million. The investor base of Fund III consists of family offices, entrepreneurs and institutional investors.

buttolph nf“We are very pleased with the strong support our existing investor base and new limited partners have shown Fund III,” said David Buttolph, Founder and Co-Manager of Brookside Mezzanine Partners. “We look forward to continuing our strategy of investing capital in the lower-middle market where we believe we can continue to achieve the strongest returns for our limited partners.”

Fund III will continue the same investment strategy of its two predecessor funds by providing subordinated debt and minority equity to small and mid-sized companies seeking capital 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.

Target companies generally have trailing twelve month revenue of at least $15 million and EBITDA of at least $3 million.

Brookside does not have a specific industry or geographic focus and will invests in a range of industries with specific interest in manufacturing, business services, distribution, restaurant, retail and healthcare.  Brookside manages $500 million through three mezzanine funds.

sclar nf“Since our founding in 2001, we have strived to be a value-added, solutions-based partner in every transaction,” said Corey Sclar, Co-Manager of Brookside Mezzanine Partners. “Our investment team’s extensive and complementary experience lending and investing in the middle market across various market cycles allows us to find the right capital solution for our partners.”

Most recently, Brookside provided subordinated debt and equity financing to support the acquisition of Dimex, a manufacturer of plastic extruded products used in a variety set of end markets such as industrial matting, landscaping, marine products, masonry construction and office chair mats, by Grey Mountain Partners.

Brookside Mezzanine Partners was founded in 2001 and has offices in Stamford, CT and Boston, MA (www.brooksidemezzanine.com).

© 2014 PEPD • Private Equity’s Leading News Magazine • 2-3-14

Fashion and Luxury Pro Joins Castanea Partners

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castanea nfRon Frasch, the former president of Saks Fifth Avenue, has joined Castanea Partners as an Operating Partner focusing on luxury products and services.

“Ron is a world-class merchant and a talented and experienced business executive. This is a rare skill set and we’re very excited to add Ron to the Castanea team,” said Brian Knez, Managing Partner of Castanea. “As a firm, we are focused on bringing unique operating experience and insight to our portfolio companies and Ron’s extensive knowledge and network in luxury goods and services will add significant value to our existing portfolio and help us identify exciting new opportunities for investment.”

frasch nfPrior to joining Castanea, Mr. Frasch was President and Chief Merchandising Officer at Saks Fifth Avenue until the sale of the company to Hudson’s Bay Co. in 2013. Previously, he was CEO and President at Bergdorf Goodman.

“I am very honored to be joining Castanea,” said Mr. Frasch, “and to have the opportunity to be working closely again with Brian Knez and Rob Smith, both founders of Castanea, and to identify and partner with exceptional small and mid-size companies in the luxury women’s and men’s apparel, accessory, shoe, and jewelry sectors. . I look forward to collaborating with creative entrepreneurs and management teams to build successful businesses with Castanea Partners.”

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 third fund, a $500 million fund that targets companies with enterprise values up to $250 million. Castanea is headquartered in Newton, MA (www.castaneapartners.com).

© 2014 PEPD • Private Equity’s Leading News Magazine • 2-3-14

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