Archives for April 15, 2014

KPS Capital Partners Acquires Anchor Glass

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KPS Capital Partners has entered into an agreement to acquire Anchor Glass Container Corporation from Ardagh Holdings USA.  Completion of the transaction is expected during the second or third quarter of 2014.

Anchor Glass is a North American manufacturer of glass packaging products for the beer, liquor, food, beverage, ready-to-drink and consumer end-markets.  The company is headquartered in Tampa and employs approximately 2,000 people, with six manufacturing facilities located in Florida, Georgia, Indiana, Minnesota, New York and Oklahoma, in addition to an engineering and spare parts facility in Illinois and a glass mold manufacturing facility in Ohio (www.anchorglass.com).

“Anchor Glass presents a tremendous investment opportunity” said Jay Bernstein, a Partner of KPS.  “The company is a leading North American manufacturer of premium glass packaging products with long-standing customer relationships and a widely recognized reputation for product quality, customer service and product innovation.  The company is uniquely positioned to supply the rapidly expanding craft beer and premium liquor segments of the glass packaging market.”

KPS Capital Partners is the manager of the KPS Special Situations Funds, a group of private equity funds with over $6 billion of committed capital focused on investing in restructurings, turnarounds and other special situations. The KPS investment strategy targets manufacturing and industrial companies with strong market positions that are going through a period of transition or experiencing operating or financial difficulties. The firm’s portfolio companies have aggregate annual revenues of approximately $7 billion, operate 93 manufacturing plants in 26 countries, and employ over 37,000 associates worldwide. KPS Capital Partners is headquartered in New York (www.kpsfund.com).

“Our investment in Anchor Glass is the first step in creating a thriving enterprise in the glass packaging industry, and we intend to aggressively grow the Anchor Glass platform both organically and through acquisitions on a global scale. We look forward to working with Chief Executive Officer Jim Fredlake and all of Anchor Glass’ employees to catalyze the next phase of Anchor Glass’ growth,” said Mr. Bernstein.

Financing for the transaction will be provided by a syndicate of banks and institutional investors with UBS Investment Bank and RBC Capital Markets acting as Lead Arrangers.

© 2014 PEPD • Private Equity’s Leading News Magazine • 4-15-14

Castle Harlan Acquires Gold Star from Prospect

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Castle Harlan has acquired Gold Star Foods, a food distributor to K-12 schools and a portfolio company of Prospect Partners.  Castle Harlan invested in Gold Star through its fifth fund, Castle Harlan Partners V.  Prospect Partners acquired Gold Star in October 2007.

“Gold Star is a proven leader in the stable and moderately growing school food distribution market, and it promotes healthy nutritional meals to its customers,” said Bill Pruellage, Co-President of Castle Harlan.  Gold Star has the scale to acquire smaller competitors in a fragmented market, as well as to expand into newer territories, such as Northern California and other Western states, additional product lines and new end-markets.”

Gold Star Foods is a food distributor to K-12 schools in California, Arizona and Nevada. The company serves 380 school districts comprised of more than 3,500 schools, enabling them to provide students meals through federal and state programs for breakfasts and lunches that include program-approved healthy ingredients.  Gold Star purchases products from more than 600 food manufacturers and farms and sells over 6,000 products of fresh bread and produce, as well as refrigerated, frozen and dry menu items. The company is headquartered near Los Angeles in Ontario, CA (www.goldstarfoods.com).

“There are many trends favorable to the school food-service distribution industry, including increasing awareness of the importance of nutrition in school breakfasts and lunches, continued population growth and increasing federal funding for programs supporting better nutrition in school meals,” said Joyce Demonteverde Schnoedl, Vice President of Castle Harlan.

Castle Harlan invests in controlling interests in the buyout and development of middle-market companies in North America, Europe and, together with CHAMP Private Equity, in Australia. Since its inception, Castle Harlan has invested in more than 54 companies representing more than $11 billion in enterprise value. The firm was founded in 1987 and is based in New York (www.castleharlan.com).

© 2014 PEPD • Private Equity’s Leading News Magazine • 4-15-14

Gridiron Capital Invests in Counsel On Call

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Gridiron Capital has made a growth capital investment in Counsel On Call, a provider of outsourced legal services.

“We are thrilled to partner with Counsel On Call’s impressive, passionate and accomplished management team, team members and attorneys,” said Tom Burger, Managing Partner of Gridiron.  “There is a significant opportunity to build on their successes, and we look forward to working together to achieve further milestones for the company.  We will continue to deliver on the company’s commitment to excellence and high-level value, as well as expand Counsel On Call’s areas of expertise and geographic presence.”

Counsel On Call provides outsourced legal services to in-house legal departments and law firms. The company provides Managed Services, or teams of attorneys on voluminous work that needs process and expert management; one attorney at a time for specific assignments or durations; and acts in a consultative role, collaborating with clients to determine how best to handle and execute legal work. Counsel On Call has eight locations, three standalone managed services centers, and approximately 1,000 attorneys working domestically and internationally. The company is headquartered in Nashville (www.counseloncall.com).

“We have built a successful company that approaches the delivery of legal services in a unique manner that prioritizes both legal and business results,” said Counsel On Call CEO Jane Allen.  “We are excited about our partnership with Gridiron – it is an exciting step in helping us achieve our business goals, continuing to improve upon the delivery of legal services for our clients and our employees.  Gridiron’s experience and success in the business services sector, as well as its operational expertise, will be indispensable as we continue to grow.”

Gridiron Capital invests in manufacturing, service and specialty consumer companies that have EBITDAs from $5 million to $30 million and that are located in the United States and Canada. The firm is based in New Canaan, CT (www.gridironcapital.com).

“We are impressed with Counsel On Call’s unique position in a new market and the depth and quality of the relationships the company has with its clients,” said Will Hausberg, Principal at Gridiron. “We look forward to leveraging Gridiron’s relationships to expand the company’s reach and build on Counsel On Call’s status as a trusted partner.”

Atlanta-based mid-market investment bank CHILDS Advisory Partners (www.childsadvisorypartners.com) served as Counsel on Call’s exclusive financial advisor.

© 2014 PEPD • Private Equity’s Leading News Magazine • 4-15-14

Madison Dearborn Exits Nuveen

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Financial services provider TIAA-CREF has agreed to acquire Nuveen Investments from an investor group led by Madison Dearborn Partners at an enterprise value of $6.25 billion. Madison Dearborn acquired Nuveen in 2007.

Nuveen Investments is provider of financial asset management services to institutions and high net worth individuals. The company has approximately $220 billion of assets under management and is based in Chicago (www.nuveen.com).

“We are proud of the accomplishments Nuveen has made in recent years and its status as a provider of top performing investment funds,” said Sam Mencoff, co-chief executive officer, Madison Dearborn Partners. “TIAA-CREF is the right home for Nuveen and its investment affiliates moving forward. We thank John Amboian and his team for their partnership and we wish them well as Nuveen enters this exciting new chapter.”

Nuveen will operate as a separate subsidiary within TIAA-CREF’s Asset Management business, retaining its current business model and continuing to support its investment affiliates through scaled distribution, marketing and administrative services.  John Amboian will remain the chief executive officer of Nuveen, and Nuveen’s current leadership and key investment team will stay in place.

TIAA–CREF (Teachers Insurance and Annuity Association – College Retirement Equities Fund) is a Fortune 100 financial services organization with approximately $569 billion in assets under management and is a leading provider of retirement services in the academic, research, medical and cultural fields.  The company was founded in 1918 by Andrew Carnegie and is headquartered in New York (www.tiaa-cref.org).

“For nearly a hundred years, we have been wise financial stewards for those who make a difference in the world in the academic and non-profit communities,” said Roger Ferguson Jr., president and chief executive officer, TIAA-CREF. “The acquisition of Nuveen can generate greater returns that will benefit our customers. This transaction reinforces our position as a leading diversified financial services organization with a broad mix of product offerings to serve clients today and those in retirement for decades to come.”

Madison Dearborn Partners has more than $18 billion of capital under management. Sectors of interest include basic industries; business and government services; consumer; financial and transaction services; health care; and telecom, media and technology services.  Madison Dearborn was founded in 1992 and is based in Chicago (www.mdcp.com).

Lazard acted as lead financial advisor to TIAA-CREF and J.P. Morgan Securities LLC also acted as financial advisor to TIAA-CREF.

BofA Merrill Lynch, Wells Fargo Securities, and Citigroup Global Markets acted as financial advisors to Nuveen Investments. UBS Investment Bank, Goldman Sachs & Co. and Moelis & Company acted as financial advisors to the Nuveen management team.

Morgan Stanley, Deutsche Bank and RBC Capital Markets acted as financial advisors to Madison Dearborn Partners.

© 2014 PEPD • Private Equity’s Leading News Magazine • 4-15-14

Pomona Closes Eighth Secondary Fund at Hard Cap

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Global private equity firm Pomona Capital has held a final close of its eighth secondaries fund, Pomona Capital VIII, LP with commitments of $1.75 billion. The new fund had a target of $1.3 billion and was substantially oversubscribed, hitting its hard cap.  Pomona Capital VIII, like its predecessor funds, will purchase interests in private equity funds, as well as portfolios of private equity-backed companies.

“Over the years, Pomona has executed a differentiated middle-market value strategy in the secondaries business,” said Pomona CEO Michael Granoff. “Our approach resonates with investors who recognize the long-term attractiveness of private equity but are concerned about risk.”

Limited partners participating in the fund include pension funds, sovereigns, financial institutions, endowments, foundations, and family offices from over 25 countries. Support from existing investors was complemented by a significant number of new investors from across the globe.

Today’s macroeconomic and private equity environments create interesting, and also challenging, opportunities in the secondaries market. “Pomona’s focus on purchasing high-quality, mature, diverse assets at compelling prices is well-suited to the current environment,” said Mr. Granoff.

Pomona Capital is an international private equity firm with approximately $8.5 billion in capital commitments across a series of secondaries, primaries and co-investment strategies.  Pomona has invested in partnership interests in over 500 private equity funds with investments in 5,000+ companies. The firm was founded in 1994 and is based in New York, London, Hong Kong, and Sydney (www.pomonacapital.com).

© 2014 PEPD • Private Equity’s Leading News Magazine • 4-15-14

Behrman Completes $570 Million Recap of Pelican

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Behrman Capital has completed a $570 million recapitalization of Pelican Products.  Proceeds from the recapitalization were used to repay existing debt and accrued interest, pay fees and expenses, and pay a cash dividend to the shareholders of Pelican.

The recapitalization is comprised of a $365 million first-lien term loan, a $175 million second-lien term loan, and a $30 million revolving credit facility, which was unfunded at close. Credit Suisse and Morgan Stanley acted as syndication agents and co-bookrunners on the transaction, and Credit Suisse was the administrative agent.

“We are very pleased to have completed this recapitalization, which allowed us to return capital to shareholders, significantly lower Pelican’s interest rate, and substantially increase the company’s financial flexibility,” said Grant Behrman, Managing Partner of Behrman Capital.

Pelican Products is a designer and manufacturer of both high-performance case solutions and advanced portable lighting systems. The company’s products are used by professionals in demanding markets including fire safety, law enforcement, defense & military, aerospace, entertainment, industrial and consumer. The company, headquartered in Torrance, CA, operates in 19 countries, with 27 offices and 6 manufacturing facilities across the globe (www.pelican.com).

Since acquiring Pelican in October 2004, Behrman Capital and management have together completed several add-on acquisitions for the company, including, most recently, Minnesota Thermal Science in 2013 and Cool Logistics in 2014.

“The highly successful syndication reflects the strong credit profile that we have created in partnership with CEO Lyndon Faulkner and the entire Pelican team. The company continues to build market share in its core products while diversifying its business, domestically and internationally, through a combination of organic growth and strategic acquisitions,” said Mr. Behrman.

This is the second recapitalization of Pelican completed by Behrman Capital.  In December 2010 the firm completed a $435 million recapitalization comprised of a $405 million first-lien term loan and a $30 million revolving credit facility, which was unfunded at close. Credit Suisse served as lead arranger and bookrunner for the offering, with GE Capital serving as joint lead arranger and joint bookrunner. Proceeds from the credit facilities were used, in conjunction with cash-on-hand, to pay a cash dividend to Pelican’s shareholders and repay existing debt.

© 2014 PEPD • Private Equity’s Leading News Magazine • 4-15-14