Archives for February 25, 2014

CCMP Capital Sells Medpace to Cinven

by

CCMP Capital has sold its portfolio company Medpace, a contract research organization, for $915 million to European private equity firm Cinven. In 2013, Medpace generated an adjusted EBITDA of $94 million resulting in a valuation multiple of 9.7x. CCMP acquired Medpace in May 2011.

Medpace is a late-stage focused clinical research organization (CRO) that provides a suite of clinical trial services to pharma, biotech and medical device companies. Medpace focuses on small to mid-size companies and has expertise in therapeutic areas such as metabolic, cardiovascular, oncology, anti-viral/anti-infective, central nervous system and medical devices. The company’s Phase II – IV services include development plan and protocol design, project management, clinical monitoring, data management and analysis, regulatory submissions and post-marketing clinical support. The company also provides central reference laboratory services, bioanalytical laboratory services, human pharmacology (Phase I) services and imaging lab services. Medpace was founded in 1992 and is headquartered in Cincinnati with operations in 45 countries. It has over 1,500 employees with approximately 40% of clinical operations employees in Europe (www.medpace.com).

The management team, led by Dr. August Troendle, the founder of Medpace and current President and CEO, will remain significant minority investors alongside Cinven.

Cinven invests in excess of €100 million of equity in companies with enterprise values typically greater than €300 million Sectors of interest include business services, financial services, healthcare, industrials, consumer, and technology, media and telecommunications. The firm was founded in 1977 and is headquartered in London (www.cinven.com).

Cinven’s healthcare team has been focused for some time on the CRO industry as an attractive market in which to invest. Increased R&D spend by the pharma and biotech industry, due to the growing number and complexity of clinical trials required to bring new products to market, is expected to fuel strong growth for the CRO industry, especially for those operators that focus on smaller pharma and biotech customers, where the outlook for R&D spend is most positive.

“Cinven’s healthcare team identified the CRO industry as an attractive market in which to invest given its fundamental growth characteristics. The CRO industry consolidation has created a gap in the market serving the mid-cap pharma and smaller biotech players – where Medpace operates and where we intend to capitalize on organic growth opportunities,” said Supraj Rajagopalan, Partner at Cinven.

In addition, Medpace has been rapidly expanding its presence in Europe and has the opportunity to achieve greater penetration across Europe and Asia, where Cinven has a strong track record of portfolio company growth.

“Medpace has a highly experienced management team and a strong market positioning, with growth in Europe and Asia presenting a real opportunity for the business,” said Alex Leslie, Principal at Cinven. “The Cinven team is well placed to accelerate this growth given our considerable European presence and also the strength of our Asia portfolio team –which has been instrumental in the success of international businesses in the region.”

Cinven was advised by Barclays and Wells Fargo Securities. Medpace was advised by Jefferies LLC and Fairmount Partners.

Fairmount Partners (www.fairmountpartners.com) previously represented Medpace in the sale of control to CCMP in May 2011, and assisted them in acquiring CRO MediTech, a European medical device company, in 2012.

“Medpace is one of the best CROs in the world, and it has been our pleasure to work closely with Dr. August Troendle and his team for over 12 years, and we look forward to continuing our long and deep relationship,” said Neal McCarthy, Managing Director of Fairmount Partners.

Fairmount Partners specializes in assisting companies in mergers and acquisitions, capital raising and strategic advice. Fairmount completes most of its transactions in its key focus areas: Technology & Software, IT & Business Services, Healthcare, and Consumer & Industrial, and has completed transactions throughout North and South America, Europe and Asia. The firm is based in the Philadelphia suburb of West Conshohocken (www.fairmountpartners.com).

CCMP specializes in making buyout and growth equity investments in the United States and Europe. The firm typically invests $100 million to $500 million of equity per transaction in companies with enterprise values of $500 million to $2 billion. Sectors of interest include consumer/retail, industrial, healthcare, and energy. CCMP is headquartered in New York (www.ccmpcapital.com).

© 2014 PEPD • Private Equity’s Leading News Magazine • 2-25-14

Birch Equity Partners Invests in Tempo Telecom

by

Birch Equity Partners has closed its first transaction through an investment in Tempo Telecom, a provider of prepaid and discount telecommunications services.

“Birch Equity Partners’ decision to invest in Tempo was an easy one,” said Vincent Oddo, Managing Partner. “We observed the historical growth and the excitement in the marketplace for prepaid and Lifeline services and knew this was an expansion-stage business that had great potential.”

Tempo Telecom is a provider of prepaid and discount communications services for either traditional landlines or wireless. The company offers discounts to consumers through the FCC-sponsored Lifeline program (through the Universal Service Fund) which provides a discount on phone service for qualifying low-income consumers. Tempo is based in Kansas City, MO and was founded in 1996 (www.mytempo.com).

“In addition to growth capital, Birch Equity will also be providing management expertise and several back-office and call center services to Tempo,” said Mr. Oddo. “We believe this multi-faceted approach to supporting a growth-stage business like Tempo will allow the company to expand exponentially over the next several years, and beyond.”

Birch Equity Partners was launched in January 2014 by Holcombe Green, Jr., Vincent Oddo and Dr. R. Kirby Godsey. The firm makes minority and control investments of $1 million to $10 million in companies with $5 million to $50 million of revenue. Sectors of interest include business services, consumer services, education, telecom and broadband services, entertainment, internet and media, financial services, healthcare, information services, and technology. Birch Equity is based in Atlanta (www.birchequity.com).

Mr. Oddo has spent his entire 30-year career working with companies in the telecommunications and technology industries. He also serves as the President and Chief Executive Officer of Birch Communications, an IP-based communications and cloud services provider headquartered in Atlanta.

Commenting on the launch of Birch last month Mr. Oddo said, “Birch Equity Partners has been a vision of ours for some time and we are excited to finally get started. Our success growing and operating Birch Communications over the past 18 years has enabled us to develop a unique set of assets and resources which we think will be very valuable to small and mid-sized expansion-stage businesses that are seeking capital as well as practical management expertise and a unique set of back-office capabilities.”

© 2014 PEPD • Private Equity’s Leading News Magazine • 2-25-14

Intervale Capital Beats Target on Fund 3

by

Energy-focused private equity firm Intervale Capital has closed Intervale Capital Fund III, LP with capital commitments of $495 million. The new fund was raised in less than five months and surpassed its target of $400 million.

Fund III will make control investments in lower middle-market companies in the oilfield services industry (the “OFS” industry), located predominantly in North America and Europe.

Intervale is led by partners Charles Cherington and Erich Horsley, who have executed more than 30 OFS transactions together since 2006. Fund III brings the cumulative funds raised by Intervale to just over $1.1 billion, including $281 million for its first fund in 2008 and $376 million for its second fund in 2012.  “We appreciate our investors’ continued support. Intervale’s focus on the oilfield should continue to yield attractive opportunities,” said Mr. Cherington.

In addition to investing in existing operating companies, Intervale will seek opportunities to back experienced management teams in the start-up and formation of new OFS companies.

“We look forward to partnering with first-class management teams to create value for our investors,” said Mr. Horsley.

Current Intervale portfolio companies include Proserv Group (offshore and subsea equipment and services), TEAM Oil Tools (completions equipment and services), Allied Oil & Gas Services (cementing and acidizing services), Aegis Chemical Solutions (production chemicals and water treatment), Certus Energy Solutions (diversified oilfield rental equipment), Epic Lift Systems (artificial lift), Tier 1 Energy Solutions (Canadian wireline and completions), Energes Oilfield Services (well flow control, water transfer and safety services) and Antelope Oil Tool (casing and cementing products).

Intervale was founded in 2006 and is headquartered in Boston (Cambridge) with an additional office in Houston (www.intervalecapital.com).

Credit Suisse Securities (USA) served as Intervale’s placement agent and Choate Hall & Stewart provided legal counsel.

© 2014 PEPD • Private Equity’s Leading News Magazine • 2-25-14

Healthcare Private Equity Association Names New President

by

Michael Dal Bello, a healthcare investment partner at Pritzker Group Private Capital, has been named president of the Healthcare Private Equity Association, a trade group comprised of more than 50 private equity firms representing 400 healthcare portfolio companies. As president, Mr. Dal Bello will lead the organization’s advocacy, research and communication efforts when he takes office in July. Prior to assuming the presidency, Mr. Dal Bello was a board member of the organization.

“I am honored to take leadership of this organization at such a pivotal time for the healthcare industry. Private equity plays a significant and constructive role in supporting the growth of leading healthcare companies, which provide the products and services that lead to effective, efficient and high-quality patient outcomes,” said Mr. Dal Bello

Mr. Dal Bello joined Pritzker Group Private Capital in December 2013 from Blackstone Group, where he invested more than $7 billion of equity capital in 13 transactions while helping to lead the firm’s sourcing efforts in healthcare. Before joining Blackstone, Mr. Dal Bello was an Associate at Hellman & Friedman where he was involved with the analysis and execution of private equity investments in the media and professional services sectors. Prior to that, he worked as a consultant at Bain & Company and also was a Research Associate at the China Center for Economic Research in Beijing. Mr. Dal Bello earned an MBA from Harvard Business School, an MA from Oxford University and undergraduate degrees from the Wharton School and the College of Arts and Sciences at the University of Pennsylvania.

The Healthcare Private Equity Association (HCPEA) was founded in 2010 by a group of private equity firms involved in healthcare. The organization advocates on behalf of members with government, represents the industry to the media and other organizations, and promotes knowledge sharing and best practices among association members. Member companies have a minimum of 3 healthcare related portfolio companies and are focused on investing in healthcare leveraged buyouts or late stage growth equity (www.hpea.org).

Founding Members of the HCPEA include: Abingworth; Apax Partners; Bain Capital; Bain Capital Ventures; Baird Capital Partners; Beecken Petty O’Keefe and Company; Blackstone; Charterhouse; Cressey & Co.; DW Healthcare Partners; Enhanced Equity Fund; Ferrer Freeman; Flexpoint Ford; Frazier; Frontenac; General Atlantic; Genstar Capital; Health Enterprise Partners; Kohlberg Kravis Roberts & Co.; Linden Capital Partners; Madison Dearborn Partners; MetalMark; MedEquity; MTS Health Advisors; Nautic Partners; Oak Hill Capital; Parthenon Capital Partners; Riordan, Lewis & Haden; Riverside Company; Roundtable Healthcare Partners; Sterling Partners; Summer Street Capital Partners; SV Life Sciences; TA Associates; TPG Capital; Vestar Capital Partners; Water Street Healthcare Partners; Waud Capital Partners and Welsh, Carson, Anderson & Stowe. HCPEA’s founding sponsors are Ernst & Young, McDermott Will & Emery and West Monroe Partners.

© 2014 PEPD • Private Equity’s Leading News Magazine • 2-25-14