Archives for April 21, 2014

Catterton Exits Van’s Natural Foods

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Catterton Partners has signed an agreement to sell its portfolio company Van’s Natural Foods to The Hillshire Brands Company for $165 million.  The transaction is expected to close in May of 2014.

“We are proud of the brand and distinctive market positioning that we and the Van’s management team have created over the past few years,” said Marc Magliacano, a Partner at Catterton.  “This transaction is a win for all parties involved and we are confident and excited that under Hillshire’s ownership Van’s will continue to experience significant growth and capitalize on new opportunities.”

Van’s is a developer, manufacturer and marketer of branded, all-natural breakfast and snack products including waffles, pancakes, cereal, crackers and snack bars. Van’s frozen breakfast and snack foods are available at grocery stores, mass merchandise stores and natural food retailers nationwide.  The company is headquartered in Phoenix (www.vansfoods.com).

Van’s Natural Foods will become part of Hillshire Brands’ Retail segment, pairing with well-known brands such as Jimmy Dean, Hillshire Farm and Ball Park. Van’s Natural Foods’ management will continue to lead the business.  Van’s is expected to have net revenues of approximately $60 million in calendar year 2014.

“As a leader in branded foods including breakfast products, Hillshire Brands is an ideal strategic partner for Van’s,” said Eric Kufel, CEO, Van’s Natural Foods. “Our positioning in the large and growing wellness consumer lifestyle segment is a perfect complement to Hillshire Brands’ product portfolio. We are pleased to have worked with Catterton, which helped drive our significant growth and market expansion into multiple new categories. I am truly excited to be joining with Hillshire and beginning the next phase of Van’s growth journey.”

Catterton Partners focuses exclusively on the consumer industry and invests in all major segments including food and beverage; retail and restaurants; consumer products and services; and media and marketing services. Catterton was founded in 1989 and has more than $4 billion in capital under management. The firm is located in Greenwich, CT (www.cpequity.com).

The Hillshire Brands Company (NYSE: HSH) is a producer of branded foods. The company’s product portfolio includes iconic brands such as Jimmy Dean, Ball Park, Hillshire Farm, State Fair, Sara Lee frozen bakery and Chef Pierre pies, as well as artisanal brands Aidells, Gallo Salame and Golden Island premium jerky.  The company generated approximately $4 billion in annual sales in fiscal 2013, has more than 9,000 employees, and is based in Chicago (www.hillshirebrands.com).

“The Van’s brand is a terrific addition to our portfolio,” said Sean Connolly, president and chief executive officer, The Hillshire Brands Company. “Not only does it expand our presence in the frozen category, it also gives us a proven health and wellness brand with extendability beyond frozen.”

Centerview Partners served as financial advisor and Stinson Leonard Street served as legal advisor to Hillshire Brands. Houlihan Lokey served as financial advisor and Gibson Dunn & Crutcher served as legal advisor to Van’s in connection with the transaction.

© 2014 PEPD • Private Equity’s Leading News Magazine • 4-21-14

American Capital Exits Scientific Protein Laboratories

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American Capital has sold its portfolio company SPL Acquisition, parent company to Scientific Protein Laboratories , to Shenzhen Hepalink Pharmaceutical Co.

Scientific Protein Laboratories (SPL) is a manufacturer and supplier of active pharmaceutical ingredients with a focus on pancreatic enzymes and heparin.  SPL specializes in cGMP (Current Good Manufacturing Practice) biopharmaceutical manufacturing and is one of the largest commercial suppliers of Heparin Sodium USP, Pancreatin USP and Pancrelipase USP (USP refers to the US Pharmacopeial Convention, a scientific nonprofit organization that sets standards for the identity, strength, quality, and purity of medicines, food ingredients, and dietary supplements manufactured, distributed and consumed worldwide).  SPL serves the pharmaceutical, veterinary and food industries globally and is headquartered near Madison in Waunakee, WI (www.spl-pharma.com).

American Capital first invested in SPL in August 2006.  At that time, American Capital’s investment took the form of a revolving credit facility, a senior term loan, a senior second lien loan, senior and junior subordinated debt and equity.

American Capital and its affiliated funds received $291 million in debt and equity proceeds, including escrows and expected tax refunds, and realized a gain of $59 million from the transaction, subject to post-closing adjustments.  Of the total proceeds, American Capital received $210 million in debt and equity proceeds, including escrows and expected tax refunds, realizing a gain of $33 million from the transaction, subject to post-closing adjustments.

American Capital also recognized $33 million of dividend income over the life of its investment.  In addition to the proceeds received at closing, there are contingent earn-out payments in the amount of $211 million, which may be paid to American Capital and its affiliated funds upon SPL achieving specified milestones.  American Capital’s compounded annual rate of return earned on its debt and equity securities over the life of its investment was 15%, including interest, realized gains and fees.

“The success of the SPL investment is a result of its strong management team, leading market position and commitment to the safety and quality of its products,” said Kyle Bradford, American Capital Managing Director, Healthcare Group.  “We are proud of the company’s improvements and success over our investment period, which made it an attractive purchase for Hepalink.”

Shenzhen Hepalink Pharmaceutical Co. is one of the largest suppliers of heparin sodium in the world.  The company is headquartered in Shenzhen, China (www.hepalink.com/en).

“American Capital was able to contribute significantly to SPL’s growth and success over the last few years,” said Will Fletcher, American Capital Senior Associate.  “By using the resources of our investment, operations, legal and other staff teams, we helped SPL complete a notable acquisition, navigate through changing market conditions and resolve significant product quality challenges.”

American Capital (NASDAQ: ACAS) is a publicly traded private equity firm and asset manager that originates, underwrites and manages investments of $10 million to $750 million in middle market private equity, leveraged finance, real estate and structured products. Founded in 1986, American Capital has $93 billion in total assets under management and has eight offices in the US, Europe and Asia. The firm is headquartered in Bethesda (www.AmericanCapital.com).

“For more than seven years, American Capital partnered with us as we grew our business, developed new products and supported our valued customers,” said Robert Mills, SPL Chief Executive Officer.  “American Capital’s deep appreciation for SPL, our employees and customers and its understanding of our unique industry, products and complex regulatory requirements proved instrumental to SPL’s success.”

© 2014 PEPD • Private Equity’s Leading News Magazine • 4-21-14

RLH Exits Secure Mission Solutions

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Riordan, Lewis & Haden has sold its portfolio company Secure Mission Solutions, a security consulting firm, to Parsons Corporation.

Secure Mission Solutions (SMS) provides security consulting services to agencies of the US government including the Department of Defense, the military health system, the intelligence community, and select civilian agencies.  The company’s services are used to defend against and avoid disruptions in operations from cyber attacks, theft, and physical damage.  The company is based in Reston, VA (www.securemissionsolutions.com).

“In the past four years, SMS has become a premier provider to the federal government of cyber and electronic security solutions, an area that has been widely recognized as America’s highest priority for national defense,” said J. Christopher Lewis, Managing Partner of Riordan, Lewis & Haden.  “This positioning has enabled the SMS team to earn many sizable federal contract awards in support of vital missions such as protecting military data networks and securing key elements of the nation’s critical infrastructure.  We congratulate the entire SMS organization on their achievements and their contributions to our nation, and wish them continued success in the future as part of the Parsons team.”

Parsons Corporation is a privately held engineering, construction, technical, and management services firm which generated $3 billion of revenue in 2013.  The company serves customers in the transportation; defense and security; environmental and infrastructure; and natural resources sectors. Parsons has over 14,000 employees and is headquartered in Pasadena, CA (www.parsons.com).

Riordan, Lewis & Haden invests in high growth, lower middle market companies that have revenues from $20 million to $150 million. Sectors of interest include business services, healthcare, and government services. The firm currently manages over $600 million of assets and is actively seeking new portfolio companies. Riordan, Lewis & Haden is based in Los Angeles (www.rlhequity.com).

© 2014 PEPD • Private Equity’s Leading News Magazine • 4-21-14

Clearview Acquires Northwest Cosmetic Laboratories

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Clearview Capital has acquired Northwest Cosmetic Laboratories (NCL), a formulator and manufacturer of cosmetic and skin care products.  Gary Voigt, Northwest Cosmetic Laboratories’ owner, will remain a significant investor and will be active as a member of the board of directors.  The company will continue to be led by its current management team including its CEO, Matt Bryant.

“We are thrilled to be working with Gary, Matt and the entire NCL team,” said Calvin Neider, Managing Partner of Clearview Capital. “NCL has many attractive avenues of growth which we intend to pursue, and we look forward to supporting the company as it seeks to expand into new product categories and markets, both organically and potentially through acquisition.”

Northwest Cosmetic Laboratories is a formulator and manufacturer of cosmetic and skin care products for branded cosmetic and personal care companies. NCL specializes in formulating “physician strength” skincare and prestige cosmetic products, which are growing categories benefitting from new ingredient technologies and shifting consumer preferences for anti-aging and other cosmetic or health benefits. NCL’s products are sold through retail, internet and direct marketing channels. The company is headquartered in Idaho Falls, ID (www.trustncl.com).

“We are very enthusiastic about our new partnership with Clearview,” said Mr. Voigt. “NCL has significant growth opportunities ahead and Clearview Capital has the experience and resources to help us reach the next level while also preserving the culture that has made us successful.”

Clearview Capital was founded in 1999 by Jim Andersen and Cal Neider and is headquartered in Old Greenwich, CT with additional offices in Chicago and Los Angeles (www.ClearviewCap.com).  The acquisition of NCL marks Clearview’s third platform investment for its third fund in the last six months and the ninth acquisition for all Clearview Capital funds in the past twelve months.

© 2014 PEPD • Private Equity’s Leading News Magazine • 4-21-14

Gen Cap Exits Van Pool Transportation

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Gen Cap America has sold its portfolio company Van Pool Transportation to Fort Point Capital.  Gen Cap America acquired Van Pool in October 2008 and realized more than eight times its original investment on the sale.

Van Pool Transportation provides transportation to and from school for special needs children in more than 100 school districts across New England. The company was founded in 1980 and is headquartered in Wilbraham, MA (www.vanpooltransportation.com).

“The relationship between Gen Cap and Van Pool was very successful for both companies,” said Gen Cap America Senior Vice President Matt Lane. “Van Pool’s differentiated service model and its strong management team, led by CEO Kevin Hinkamper, were key factors in Gen Cap’s investment in Van Pool nearly six years ago, and we believe those same resources will usher in its next successful chapter of growth.”

Gen Cap America invests in companies with revenue between $5 million and $100 million that are active in the manufacturing, distribution or service sectors.  The firm is actively investing Southwest Fund VI, a $165 million fund which began making investments in May 2010. Gen Cap was founded in 1985 and is based in Nashville (www.gencapamerica.com).

The buyer, Fort Point Capital, invests from $5 million to $25 million in service-oriented, lower middle market companies across a range of sectors, including business services, healthcare, consumer, and software and information. Fort Point Capital is currently investing from FPC Small Cap Fund I. The firm is based in Boston (www.fortpointcapital.com).

© 2014 PEPD • Private Equity’s Leading News Magazine • 4-21-14

Succession Capital Acquires Floor Solutions

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Succession Capital has acquired Floor Solutions, a commercial flooring distributor and installer.

“Floor Solutions finds a strong competitive advantage in its people and reputation. Its reputation allows Floor Solutions to work closely with the design community. In addition, it is able to retain the best subcontractors because it is well known for fair treatment and timely payments,” said Brad Nathan, President of Succession Capital. “We are thrilled to have acquired this company and look forward to its continued success.”

Floor Solutions is a wholesale distributor, installer and maintenance provider of commercial flooring in both Oregon and Washington.  Customers include architects, designers and general contractors working on commercial flooring projects for government buildings, hospitals, universities, airports and senior care facilities. Floor Solutions purchases material directly from manufacturers based on customer specifications and manages the installation process, outsourcing the labor to subcontractors. In addition, the company provides post installation maintenance services.  Floor Solutions was founded in 1995 and is based in Portland (www.floorsol.com).

Succession Capital, a subsidiary of Lynx Equity Limited, seeks to acquire small to medium-sized businesses from owners looking to retire.  Succession targets transactions requiring between $2 million and $8 million of equity. The firm is based in La Jolla, CA (www.succession-capital.com).  Floor Solutions is Succession Capital’s and Lynx’s 10th combined acquisition in 2014.

© 2014 PEPD • Private Equity’s Leading News Magazine • 4-21-14

Palladium Closes Fund IV Way Above Target

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Palladium Equity Partners has held a final closing of Palladium Equity Partners IV, LP (PEP IV) at $1.14 billion. The new fund exceeded Palladium’s target of$800 million.  As with prior funds, PEP IV will invest in lower-middle market companies – particularly founder-owned enterprises – with a focus on the US Hispanic market.

“We are extremely pleased with our limited partners’ support.  With PEP IV, we plan to continue to apply our proven and disciplined investment process and our results-driven value creation model to seek to generate attractive risk-adjusted returns for our investors,” said Marcos Rodriguez, Chairman and CEO of Palladium.

PEP IV received strong support from existing limited partners of PEP IV’s predecessor funds, and also attracted many first-time investors, including well known corporate and public pension plans, family offices, funds of funds, insurance companies and other retirement plans in North America, Latin America and Europe.   PEP IV investors agreed to increase the Fund’s cap from its original $1 billion in order to accommodate strong demand.

“As we deploy PEP IV, we are excited to partner with founders and management teams to help improve and grow their companies into larger and more valuable market leaders,” said David Perez, President and COO of Palladium.

Palladium Equity Partners targets investments in financial services, business services, food, healthcare, industrial and media businesses.  Palladium has a focus on companies that operate in the rapidly growing US Hispanic market – a market segment where the firm has expertise, a broad network and an extensive track record of investing.  The principals of Palladium have invested over $1.5 billion of equity in 50 portfolio companies over the last two decades.  The firm was founded in 1997 and is based in New York (www.palladiumequity.com).

© 2014 PEPD • Private Equity’s Leading News Magazine • 4-21-14