Archives for May 21, 2014

The Carlyle Group to Acquire Talent Partners

by

The Carlyle Group has agreed to acquire a majority interest in Talent Partners, a talent payroll, production support services and rights management services provider to the advertising industry. The transaction is expected to close in the second quarter of 2014. Equity for the investment will come from the Carlyle Equity Opportunity Fund.

Paul Muratore will continue in his position as President and Chief Executive Officer.  Longtime investor Michael Donovan, who also serves as Executive Chairman of Mediaocean, will retain an investment stake in Talent Partners.

“We are impressed by the diverse, global capabilities of Talent Partners, its long-standing relationships with and the quality of its client roster, and its growth potential. We look forward to working with Paul and his team to expand their services to new and existing clients in the US and around the world,” said David Stonehill, Carlyle Managing Director.

Talent Partners is the world’s largest paymaster to on-air commercial talent, issuing over one million checks annually to performers around the globe. The company also provides other services including negotiations and business affairs, traffic and clearance, rights and royalty management, and signatory services.  The company has more than 750 clients including 23 of the top 25 largest US advertising agencies and 23 of the top 25 largest US advertisers. The company has approximately 250 employees and has offices in New York (headquarters), Chicago, Los Angeles, London and Toronto (www.talentpartners.com).

“Carlyle’s investment is a validation of our vision for the future,” said Mr. Muratore.  “It provides us with the resources to deliver new and innovative services to our clients and accelerate our global growth.”

The Carlyle Group (NASDAQ: CG) invests in buyouts, growth capital, real estate and leveraged finance in Africa, Asia, Australia, Europe, North America and South America. Carlyle has expertise in various industries, including: aerospace, defense & government services, consumer & retail, energy, financial services, healthcare, industrial, real estate, technology & business services, telecommunications & media and transportation.  The firm employs approximately 1,600 people in 38 offices across six continents and is based in Washington, DC (www.carlyle.com).

© 2014 PEPD • Private Equity’s Leading News Magazine • 5-21-14

Sentinel and TriArtisan Acquire TGI Fridays

by

Carlson has entered into an agreement for the sale of TGI Fridays Restaurants to Sentinel Capital Partners and TriArtisan Capital Partners. TGI Fridays will continue to be run by its current management team, led by President and CEO Nick Shepherd. The transaction is expected to close by July 2014.

TGI Fridays is a casual dining bar and grill with 900 restaurants in more than 60 countries.  The company’s restaurants include TGI Fridays, Fridays FrontRow Sports Grill and Fridays American Bar, and employ over 70,000 people globally.  System-wide sales of the group were $2.7 billion in 2013. The first TGI Fridays restaurant opened in 1965 and Carlson acquired the chain in 1975 when the brand had just 12 restaurants. TGI Fridays is headquartered north of Dallas in Carrollton, TX (www.fridays.com).

“We are proud of the Fridays brand and strong marketplace momentum that has been created over the past nearly four decades,” said Carlson President and CEO Trudy Rautio. “This transaction is a win for all parties and we are excited and confident that under Sentinel’s ownership Fridays will continue to experience significant growth and capitalize on new opportunities. For Carlson, this transaction frees up resources that the company can deploy to focus on and accelerate the growth of its hotel and travel businesses, at a time when significant opportunities exist in these markets.”

Sentinel, who will be TGI Fridays’ majority shareholder, has restaurant and franchising investment experience and a demonstrated ability to create successful independent businesses through complex corporate carve outs.  Sentinel has completed numerous acquisitions of both franchisors and franchisees, including Checkers/Rally’s, the largest franchisor and operator of dual drive-thru hamburger QSRs in the United States; Newk’s Eatery, a rapidly growing fast-casual concept in the Southeast United States; Falcon Holdings, the largest franchisee of Church’s Chicken restaurants; Huddle House, a leading franchisor of family dining restaurants in the Southeast; Massage Envy, the nation’s largest provider and franchisor of therapeutic massage and spa services; and Southern California Pizza Company, a 223-unit Pizza Hut franchisee operating in the greater Los Angeles market.

“We are very excited to partner with TGI Fridays’ outstanding management team,” said John McCormack, a Sentinel senior partner. “TGI Fridays is an iconic global brand with a long history of solid performance and a significant opportunity for future growth.”

Sentinel Capital Partners invests in middle market companies in the United States and Canada in partnership with management. The firm invests in management buyouts, recapitalizations, corporate divestitures, and going-private transactions of businesses with EBITDAs between $7 million and $40 million. Sentinel targets eight industry sectors: aerospace & defense, business services, consumer, distribution, food & restaurants, franchising, healthcare, and industrials. The firm is headquartered in New York (www.sentinelpartners.com).

Tri-Artisan Capital Partners operates as the investment arm of Morgan Joseph TriArtisan Group and invests in consumer and retail, industrial, healthcare, media and telecommunication, leisure, real estate, gaming, lodging, hospitality, and diversified service sector companies. Tri-Artisan Capital Partners is based in New York (www.morganjoseph.com).

Carlson is a hospitality and travel company. The Carlson Rezidor Hotel Group includes more than 1,340 hotels in operation and development, including, Quorvus Collection, Radisson Blu, Radisson, Radisson Red, Park Plaza; Park Inn by Radisson and Country Inns & Suites By Carlson; and a majority stake in Carlson Wagonlit Travel.  Carlson operates in more than 150 countries and territories and its brands employ more than 100,000 people.  The company is headquartered in Minneapolis (www.carlson.com).

Piper Jaffray & Co. served as Carlson’s financial advisor for this transaction and Locke Lord served as legal counsel.  Kirkland & Ellis served as legal counsel to Sentinel.

© 2014 PEPD • Private Equity’s Leading News Magazine • 5-21-14

Silver Oak Exits Convergent Resources

by

Silver Oak Services Partners has completed the sale of its equity interest in portfolio company Convergent Resources to strategic buyer Account Control Technology Holdings.  Silver Oak first invested in Convergent Resources in June 2007.

Convergent Resources is a provider of outsourced receivables management and revenue cycle management services to the utility, telecom, financial services and healthcare sectors. The company offers a suite of services, including first-party outsourcing, third-party early and late stage collections, insurance follow-up, extended business office services and patient access services for hospitals. Convergent has over 2,800 employees and operates fifteen office locations. The company was founded in 1998 and is headquartered in Atlanta (www.convergentusa.com).

The buyer of Convergent, Account Control Technology Holdings (ACT), represents a group of companies offering outsourced business services. Its flagship company, Account Control Technology, provides consultative debt management, collection, call center and business office services for education, government and consumer entities. The company was founded in 1990 and is based in Canoga Park, CA (www.accountcontrol.com).

“We believe the acquisition of Convergent by ACT is a great outcome for all parties,” said Dan Gill, Managing Partner at Silver Oak. “Our management team did a remarkable job growing the business in a difficult environment, positioning Convergent well to continue its strong momentum in its new partnership with ACT.”

Silver Oak makes control investments of $10 million to $30 million in companies with revenues from $15 million to $150 million and EBITDAs from $3 million to $20 million. Sectors of interest include business services, healthcare services, and consumer services.  Silver Oak is based in the Chicago suburb of Evanston (www.silveroaksp.com).

During Silver Oak’s ownership, Convergent expanded into new lines of business such as Patient Access, developed near-shore capabilities with a facility in Guatemala, made investments in technology and improved operating efficiencies.  As a result, Convergent grew the business nearly 35% during the period of Silver Oak’s investment.

“We are very appreciative of the support and guidance from the Silver Oak team over the last seven years.  Convergent is a much stronger business with significant momentum due to the strength of our team but also Silver Oak’s investments in the business and its strategic counsel,” said Mike Meyer, CEO of Convergent.

© 2014 PEPD • Private Equity’s Leading News Magazine • 5-21-14

Pharos Capital Acquires Employee Benefit Solutions

by

Pharos Capital Group has acquired Employee Benefit Solutions, a provider of healthcare cost containment and wellness programs for small and mid-sized employers.

The acquisition of Employee Benefit Solutions marks the second investment from Pharos Fund III, following Pharos’ acquisition of behavioral health services provider Seaside Healthcare this past January.

“Healthcare remains an important focus for Pharos, and we believe our experience with underserved markets and mid-sized businesses can help EBS take advantage of positive, ongoing trends,” said Bob Crants, Managing Partner at Pharos.

Employee Benefit Solutions (EBS) serves employer groups in almost every state in the continental US with a total customer base of over 30,000 employees, including 58,800 covered lives.  EBS is best known for its primary product, the Difference Card, an employer-funded debit card programmed for reimbursement of approved out-of-pocket employee healthcare expenditures.  The company has offices in White Plains, NY (headquarters); San Francisco, CA; and Chicago, IL (www.differencecard.com).

In connection with the transaction, Gregg Lehman, Ph.D. has been named as CEO of EBS. Dr. Lehman, a healthcare executive who formerly served as CEO of Gordian Health Solutions, a former Pharos portfolio company in the wellness industry, replaces EBS founder Paul Staubi.  Dr. Lehman most recently served as CEO of cardio-respiratory medical device manufacturer MGC Diagnostics, and prior to that was CEO of population health management company Health Fitness Corporation. Mr. Staubi retains a minority stake in EBS and will serve on the company’s Board.

“It’s an exciting time for me to join and lead the company,” said Dr. Lehman. “EBS has a strong presence in the health benefit and employee wellness industry, and I look forward to building upon Paul’s great work.”

“With the implementation of the Affordable Care Act, controlling healthcare costs is a growing concern for many businesses and should further fuel the impressive growth EBS has achieved over the last six years,” said Joel Goldberg, Partner at Pharos.

Pharos Capital Group invests $10 million to $40 million in companies seeking later stage funding for internal growth, acquisitions, management buyouts or recapitalizations. The firm invests across many sectors but has a particular interest in healthcare and business services. Pharos Capital Group has offices in Dallas and Nashville (www.pharosfunds.com).

Duff & Phelps Securities served as financial advisor to Employee Benefit Solutions.

© 2014 PEPD • Private Equity’s Leading News Magazine • 5-21-14

Mercer Expands Private Equity M&A Business in the Midwest

by

Mercer has added two new professionals to its North America Private Equity M&A team with the addition of Jennifer Jakubowski and Ken Weinberger.  Both Ms. Jakubowski and Mr. Weinberger report to Jeff Cox, Senior Partner and North America Private Equity M&A Leader

“I am happy to welcome Jennifer and Ken back to Mercer,” said Mr. Cox, “Each brings a depth of experience and knowledge that will immediately enhance our insights and service levels to our private equity clients as they try to navigate today’s increasingly competitive and complex deal environment.”

Jennifer Jakubowski has re-joined the Mercer M&A team in Chicago as Principal with a focus on Midwest-based private equity clients.  Ms. Jakubowski has a strong background in defined benefit pensions and retirement programs and her experience includes assisting private equity and corporate clients with mergers, acquisitions and spin-offs, analyzing plan design scenarios and projections under different economic and design scenarios for both small and large clients, and nondiscrimination testing for medium to large size clients.

Ms. Jakubowski joins Mercer from Bridgewater Associates where she served as Program Manager, Retirement Programs. Prior to that, she was part of Mercer’s Retirement business for 13 years. Ms. Jakubowski holds a Bachelor of Science in Actuarial Science from the University of Iowa.

Ken Weinberger has also re-joined Mercer as a Principal in its North America Private Equity M&A practice. Mr. Weinberger is an M&A consultant and ERISA attorney who now leads benefits and HR due diligence efforts for private equity clients in the Midwest.  In this role he provides a range of merger and acquisition services including due diligence, negotiation support, financial analysis, and program implementation. His experience includes both domestic and multinational transactions and includes experience with collectively bargained groups in the manufacturing sector.

Prior to re-joining Mercer, Mr. Weinberger was a Senior Vice President with Aon Hewitt where he led the Chicago M&A practice and held numerous other positions including Chicago Business Development Leader. His initial career at Mercer included serving as an ERISA attorney in the Chicago Legal Practice and working with clients on their M&A needs. Mr. Weinberger has a Bachelor degree in Economics from the University of Illinois and a law degree from the DePaul University College of Law.

Mercer is a provider of talent, health, retirement and investments consulting services. The firm has approximately 20,000 employees based in more than 43 countries and the firm operates in over 130 countries. Mercer is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE:MMC), a global team of professional services companies offering clients advice in the areas of risk, strategy and human capital (www.mercer.us).

© 2014 PEPD • Private Equity’s Leading News Magazine • 5-21-14

Corridor Capital Expands Team

by

Iman Navi has joined Corridor Capital as a Vice President. With more than eight years of middle market principal investment and investment advisory experience, Mr. Navi will focus on acquisitions of specialty manufacturing and business services platform companies and he will provide support services to the firm’s portfolio companies.

Prior to joining Corridor, Mr. Navi was the Founder and Managing Partner of Navi Capital, a strategic & financial advisory merchant banking firm focused on the lower middle market.  Prior to the formation of Navi Capital, he was an Associate at Lovell Minnick Partners, a middle market private equity firm.  During his 4-year tenure with Lovell Minnick Partners, Mr. Navi was responsible for deal execution, portfolio monitoring, and deal sourcing and he worked on multiple platform and add-on investments.

Mr. Navi began his career as an investment banker with Macquarie Securities where he focused on merger & acquisitions, capital raising and restructuring engagements. Mr. Navi earned his MBA from Columbia Business School and graduated with a BA in Economics and minor in Accounting from the University of California at Los Angeles.

Corridor Capital makes control investments of $3 million to $12 million in mid-market companies with EBITDAs of $2 million to $5 million. Sectors of interest include specialty manufacturing, business services, and environmental services. Corridor focuses on complex situations, particularly those requiring growth support or operational or financial engagement. Corridor’s investor base includes approximately 150 executives across an array of industries and disciplines that the firm uses as an active resource for its portfolio companies and their teams. The firm is based in Los Angeles (www.corridorcap.com).

© 2014 PEPD • Private Equity’s Leading News Magazine • 5-21-14