Archives for May 2014

Vista Equity Partners Acquires STATS

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FOX Sports and The Associated Press have agreed to sell their sports data company, STATS LLC, to Vista Equity Partners. Both AP and FOX Sports own 50% of STATS and will continue their usual business relationship with the company after the sale. The transaction is expected to close this summer.

STATS is a sports technology, data and content company providing real-time scores, historical sports information, sports content from AP and specialized technology for viewing, tracking and analyzing sports.  The company name originated as an acronym for “Sports Team Analysis and Tracking Systems” and was founded in April 1981.  STATS was acquired by Fox Sports in 2000 and the Associated Press invested in the company when STATS merged with AP Megasports in 2005.  STATS is based in the Chicago suburb of Northbrook (www.stats.com).

“It’s been a privilege to partner with the AP, and under the leadership of STATS CEO Gary Walrath, help grow STATS into one of the most innovative sports technology and information companies in the world,” said Eric Shanks, president and COO, FOX Sports. “We’re confident Vista will be able to build upon that success and drive STATS to even greater heights.”

Vista Equity Partners has more than $12 billion in committed capital and makes equity investments in enterprise software businesses and technology-enabled services companies. The firm was founded in 2000 and has over 50 investment professionals operating out of Austin, Chicago, and San Francisco (www.vistaequitypartners.com).

The Associated Press is a global news network, delivering news from every corner of the world to all media platforms and formats.  The organization was founded in 1846 and is based in New York (www.ap.org).

FOX Sports is the umbrella entity representing 21st Century FOX’s array of multi-platform US-based sports assets. FOX Sports includes ownership and interests in linear television networks, digital and mobile programming, broadband platforms, multiple web sites, joint-venture businesses and several licensing partnerships.  The company is based in Los Angeles (www.foxsports.com).

“AP and FOX Sports have had an excellent and productive partnership. Together with the STATS team we’ve built a highly successful enterprise that we expect will be able to continue its growth and innovation under Vista,” said AP President and CEO Gary Pruitt.

The Raine Group (www.raine.com) acted as exclusive financial adviser to The Associated Press and 21st Century Fox.

© 2014 PEPD • Private Equity’s Leading News Magazine • 5-20-14

Heritage Invests in EPTAM Plastics

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Heritage has completed a management-led equity recapitalization of EPTAM Plastics, a fabricator of machined plastic components.  Partnering with Heritage are members of the EPTAM management team, led by President Jeff Hollinger.

“We welcome this partnership with Heritage, a firm that shares our commitment to building stakeholder value and has an excellent reputation as an equity partner for closely-held businesses,” said Mr. Hollinger. “They bring a deep experience base in precision components manufacturing. This expertise will enable us to maintain our current position as a market leader in precision machined plastic components as well as grow into important new market segments.”

EPTAM is a fabricator of machined plastic components for customers in the aerospace & defense, semiconductor, medical, industrial and power generation industries.  The company uses high performance engineered plastics such as Delrin, Ultem, Radel, Torlon, Ertalyte, Acetron GP, Vespel, PEEK and carbon fiber filled materials  that are stocked and machined for customers requiring close tolerances and consistent quality for CNC milling, turning, routing and sawing. EPTAM has a 60,000 sq. ft. manufacturing facility and is headquartered in Northfield, NH (www.eptam.com).

“We are very proud to invest alongside the EPTAM management team and are pleased to partner with them to continue the company’s long history of growth,” said Mark Jrolf, Managing General Partner at Heritage. “EPTAM has differentiated itself from competitors by building long-term, enterprise-level partnerships with its customers. We look forward to leveraging our experience in precision machining to expand the value EPTAM brings to these deep relationships.”

Heritage invests minority or majority equity in companies with minimum revenues of $30 million and at least $5 million of EBITDA. Sectors of interest include aerospace, business services, consumer products, distribution, education & training, food & beverage, healthcare & healthcare services, industrial & infrastructure, manufacturing, pet products & services, specialty chemical, and test & measurement. Heritage was founded in 2006 and is headquartered in Boston (www.newheritagecapital.com).

“The EPTAM management team has a long and impressive track record of achieving successful outcomes for its customers, and represents the type of passionate and entrepreneurial team we look to invest behind,” said Judson Samuels, Principal at Heritage.

Bigelow (www.bigelowllc.com) provided investment banking services to EPTAM. Choate, Hall & Stewart (www.choate.com) provided legal services to Heritage. Crescent Capital (www.crescentcap.com) and Bank of New Hampshire (www.banknh.com) provided the debt financing.

© 2014 PEPD • Private Equity’s Leading News Magazine • 5-20-14

“The REST of the Story…”

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By Andy Greenberg, CEO GF Data

Valuation multiples in the GF Data M&A universe of M&A transactions were largely unchanged in the first few months of this year – 6.4 times Trailing Twelve Months (TTM) Adjusted EBITDA compared to 6.5 times in 2013 – but that constancy obscures – as Paul Harvey would say, “the REST of the story.”

Within GF Data’s Total Enterprise Value (TEV) parameters of $10 to $250 million, the premiums buyers are applying to selling businesses offering greater size and better financial performance have never been higher.

Businesses in the $50-$250 million swath of the market traded at an average of 8.8x in 1Q, compared to 5.1x on deals in the $10-$50 million bracket.  This 3.7x spread dwarfs the historical average of 1.3x and was propelled in part by the most pronounced differentials in debt levels seen in a transaction universe that dates back to 2003.

The premium for above-average financial performance – defined roughly as TTM EBITDA margins and revenue growth in excess of 10 percent – was 20 percent for 1Q.  This is in line with the 2013 mark of 18 percent.  However, the average “quality premium” over the past 11 years is four percent.

“We’d expect the magnitude of these spreads to revert a bit to the mean over the course of this year,” said Andrew Greenberg, GF Data’s CEO, “but the directional message is unmistakable. The market has never been more bifurcated, and never hungrier for quality properties of a certain size.”

With respect to deal volume, the 188 private equity firms that are active contributors to GF Data reported 30 completed transactions in 1Q 2014, up from 24 in the year-ago quarter but markedly down from the 57 deals reported in 4Q.

“In the past, we’ve noted that the drop off in completed deal activity from the fourth quarter of one year to the first quarter of the next generally averages about 25 percent, with last year’s standstill following the 2012 year-end rush of course a major exception.  That benchmark would point to 42 completed deals, not 30. Financial buyers and deal professionals clearly expected more carry over momentum from the 2013 year-end,” said B. Graeme Frazier, IV, GF Data Co-Founder and Principal.

“Debt markets are clearly continuing to support healthy valuation multiples, particularly in transactions valued over $50 million,” said Phil Gilbert, Managing Director of investment banking firm PMCF.  “While the number of reported transactions in the first quarter is a bit lower than most expected, we’ve seen the number of private equity firms competing aggressively on value with strategic buyers increase substantially this year.  Much of this can be attributable to the availability of low-cost debt capital.”

GF Data provides external information for use in valuing and assessing M&A transactions to private equity firms, investors, lenders and other users.  GF Data collects and publishes proprietary transaction information from private equity groups on a blind and confidential basis.  The pool of active contributors comprises 188 private equity firms, mezzanine groups and other financial sponsors.  Data contributors and paid subscribers receive four products: (1) a quarterly report containing high-level valuation, volume and leverage data; (2) a quarterly supplement offering detailed information on debt and capital structure trends; (3) a semi-annual supplement o indemnification cap, escrow and other details; and (4) continuous access, through GF Data’s secure website, to detailed valuation data organized by NAICS code.

For information on subscribing or on contributing data as a private equity participant, please contact Bob Wegbreit at [email protected] or 610-260-6263.

© 2014 PEPD • Private Equity’s Leading News Magazine • 5-20-14

Post Capital Has First Close at $52 Million

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Post Capital Partners has held a first closing of Post Capital Equity Partners III, its second fund, at $52 million. The target size of the fund is $100 million.

“We are very pleased with the reception that our fund has received to this point in the marketplace. At the same time, we remain focused on partnering with proven operators who share a clear vision to transform businesses and materially enhance shareholder value,” said Mitch Davidson, a Managing Director and co-founder of Post Capital.

Earlier this month, an investment group led by Post Capital Partners acquired the solid waste operations of Waste Management in Puerto Rico.  Joining Post in the investment group is 30-year waste management industry veteran Randy Jensen.  Waste Management will remain an investor in the new company, which is called EC Waste. The transaction also includes landfill and hauling operations in Alabama.  The acquisition of the Waste Management Puerto Rico operations is the first investment for Post Capital Equity Partners III.

Post Capital invests from $5 million to $15 million of equity in companies with $10 million to $100 million of revenue and a minimum EBITDA of $2 million.  Industries of interest include business services; financial/insurance services; consumer products and services; healthcare services; media and publishing; niche manufacturing and industrial; and transportation and logistics.  Post Capital was founded by Mitch Davidson and Michael Pfeffer and is based in New York (www.postcp.com).

“Mitch and Michael have worked together for 10 years successfully executing their strategy. Given this level of experience and fund size, they are well positioned to enjoy continued success,” said Rafael Astruc of Garrison Securities. Mr. Astruc has partnered with Post Capital to invest in the fund and is also acting as a strategic advisor and helping to diversify and expand Post Capital’s investor base.

© 2014 PEPD • Private Equity’s Leading News Magazine • 5-20-14

CCMP Capital Acquires The Hillman Companies

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CCMP Capital Advisors and The Hillman Companies, a portfolio company of Oak Hill Capital Partners, have signed an agreement under which CCMP will acquire a controlling interest in Hillman in a transaction valuing the company at $1.48 billion.  Oak Hill first invested in The Hillman Companies in June 2010 when it acquired the company from Code Hennessy & Simmons and the Ontario Teachers’ Pension Plan.

Hillman Group is a value-added distributor of fasteners, key duplication systems, letters, numbers and signs, engraved tags, and builder’s hardware to over 26,000 retail customers in the United States, Canada, Mexico, South America and Australia.  Hillman also provides its customers with product category management services for over 60,000 SKUs, including sourcing, logistics, merchandising displays, inventory management and in-store sales and service support.  Customers include home improvement centers, mass merchants, national and regional hardware stores, pet supply stores and other retailers, including Ace Hardware, Do it Best Corp, Home Depot, Lowe’s, Menards, Petco, PetSmart, RONA, Tractor Supply, True Value and Walmart.  Hillman was founded in 1964 and is headquartered in Cincinnati (www.hillmangroup.com).

“Hillman has been a successful investment for Oak Hill Capital.  Since investing in the company in 2010, we have worked closely with management to define and execute a strategic and operational plan that has enabled Hillman to grow EBITDA by approximately 50% during that time and positioned the company for future growth.  We thank Jim Waters, Mick Hillman and the entire Hillman team for their efforts, and we are excited to partner with CCMP and management moving forward,” said Tyler Wolfram, Managing Partner of Oak Hill Capital.

CCMP is investing in partnership with Hillman’s current management team, led by CEO Jim Waters.  Oak Hill will retain a significant minority interest in the company.  Completion of the transaction is expected in the second or third quarter of 2014.

“Jim and his team have established Hillman as an essential product and services provider in the hardware and home improvement industry.  The company has a tremendous platform, including a unique, high-touch sales and service team of over 800 members and a sophisticated sourcing and distribution network throughout the U.S., Canada and Mexico,” said Joe Delgado, Managing Director of CCMP.  “We look forward to working with Jim and the entire Hillman team to help drive Hillman’s next phase of growth as the company expands organically and through strategic acquisitions into adjacent markets and new geographies.”

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).

Oak Hill Capital Partners has $8 billion of committed capital and invests in the following sectors six sectors: basic industries; business and financial services; consumer, retail & distribution; healthcare; media & telecom; and technology. Over the past 25 years, the professionals at Oak Hill Capital Partners and its predecessors have invested in more than 70 private equity transactions. The firm is located in Stamford, CT (www.oakhillcapital.com).

The Hillman Companies is being advised by Barclays on the transaction.  CCMP is being advised by Morgan Stanley.

© 2014 PEPD • Private Equity’s Leading News Magazine • 5-19-14

Propel Equity Acquires Summit Products

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Alex Brands, a portfolio company of Propel Equity Partners, has acquired toy company Summit Products.

Summit Products is a maker and marketer of toys sold under the brand names Zillionz, Backyard Safari, Covert Force, Test Pilot, and Stink Bugzz. The company was founded in 1995 and is based in Birmingham, AL (www.summittoy.com).

“From Zillionz, which was designed to help children better understand the value of money through play, to Backyard Safari, which celebrates the natural sciences, the brands we are bringing into Alex Brands align perfectly with our core mission,” says Michael Cornell, Chairman and CEO of Propel Equity Partners. “We are a company dedicated to providing high quality, innovative and trend leading toys that encourage exploration, build confidence and introduce valuable skills. These brands – including the emphasis upon learning through creative play – will help us further deliver upon that commitment.”

Alex Brands is a family of brands owned by Propel Equity Partners that includes some of the most iconic brand names in the toy industry, including Alex Toys, Poof, Slinky, Scientific Explorer, Ideal and Zoob.  The company is based in Northvale, NJ (www.alextoys.com).

Propel Equity Partners (formerly MCC Capital Partners) invests up to $50 million of equity in branded consumer products businesses with$10 million to $100 million of revenue and adjusted EBITDAs from $2 million to $20 million. The firm was founded in 2012 and is based in Greenwich, CT (www.propelequity.com).

© 2014 PEPD • Private Equity’s Leading News Magazine • 5-19-14

ACAS Names Team to Lead Lower Mid-Market Buyouts

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Earlier this month, American Capital entered into agreements with a group of investors to establish American Capital Equity III, LP (ACE III), a new private equity fund with $1.1 billion of commitments focused on investing in companies in the lower middle market. Today, American capital has named the professionals who will lead the newly formed Lower Middle Market Buyout group.

The new group will be led by Sean Eagle, Eugene Krichevsky, David Steinglass and Justin DuFour, who have more than a decade of experience working together at American Capital and more than 50 years of collective experience managing and investing in lower middle market buyouts.  The Lower Middle Market group has an initial staff of 10 investment professionals and is located in the company’s Bethesda, MD office.

“We are delighted to have Sean, Eugene, David, Justin and their entire team continue to devote their attention to lower middle market buyouts and deploy and manage our new ACE III fund,” said Malon Wilkus, American Capital Chairman and Chief Executive Officer.  “They have broad industry experience, complementary skill sets and an excellent track record investing in lower middle market buyouts through several economic and credit cycles while at American Capital.  The Lower Middle Market Buyout group complements our larger investment platform where we target middle and upper middle market buyout opportunities up to $750 million in size, as well as energy, infrastructure and special situations investment strategies.”

Prior to the closing of ACE III, which is expected in the next 90 days, American Capital will contribute all of its equity and equity-related investments in seven portfolio companies and an option to acquire American Capital’s equity investment in an additional portfolio company to ACE III.  The aggregate agreed upon value of these investments, assuming the option is exercised, is approximately $640 million.  An additional $445 million in capital commitments will be provided by an investor group and American Capital to allow the Lower Middle Market Buyout group to make new investments in companies with $5 million to $25 million of EBITDA that are active in technology services, healthcare products and services, and industrial markets.

The investor group, which was led by funds advised by Coller Capital, Goldman Sachs Asset Management and StepStone Group, also includes sovereign wealth funds, state retirement and pension systems, high net worth family offices, superannuation funds and foundations.

“We are excited by the opportunity to manage ACE III and deploy its $445 million of committed capital in lower middle market buyouts of companies with EBITDA of $5 to $25 million,” said Sean Eagle, Managing Director, Lower Middle Market Buyouts.

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 lower and 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).

The Lower Middle Market Buyout group will operate within American Capital’s asset management affiliate, American Capital Asset Management LLC, which creates, capitalizes and manages alternative investment funds across asset classes, including private equity, private finance, real estate and energy and infrastructure.

“We believe our collective experience investing in lower middle market companies, coupled with American Capital’s infrastructure and significant market coverage, differentiates us in this segment of the market and positions us well to deliver attractive returns for our investors,” said Eugene Krichevsky, Managing Director, Lower Middle Market Buyouts.

© 2014 PEPD • Private Equity’s Leading News Magazine • 5-19-14

Golden Gate Acquires Red Lobster

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Darden Restaurants has entered into an agreement to sell its Red Lobster business and certain other related assets and assumed liabilities to Golden Gate Capital for $2.1 billion in cash.  The purchase price is approximately 9x Red Lobster’s EBITDA for the twelve months ending April 27, 2014.  Darden expects the sale of the Red Lobster business to close in the first fiscal quarter of 2015.

Red Lobster is a casual dining restaurant chain with705 Red Lobster locations worldwide. The company has operations in Canada, Saudi Arabia, the United Arab Emirates, Qatar and Japan. Red Lobster was founded in March 1968 by entrepreneurs Bill Darden and Charley Woodsby and is based in Orlando (www.redlobster.com).

“Red Lobster is an exceptionally strong brand with an unparalleled market position in seafood casual dining,” said Josh Olshansky, Managing Director at Golden Gate Capital.  “Red Lobster is exactly the type of company in which we seek to invest given its great brand profile and strong management team.  We see significant opportunities for future growth by partnering with CEO Kim Lopdrup and the management team to support the long-term success of Red Lobster.”

Golden Gate Capital has obtained committed debt financing from Deutsche Bank AG, Jefferies and GE Capital, and has fully executed a separate $1.5 billion sale-leaseback agreement with American Realty Capital Properties, the proceeds of which will be used to support the financing of Golden Gate Capital’s purchase of Red Lobster.

Deutsche Bank Securities and Jefferies are serving as financial advisors to Golden Gate Capital in connection with the transaction.  Goldman, Sachs & Co. is serving as Darden’s exclusive financial advisor on the sale of Red Lobster.

Golden Gate Capital targets companies across a range of industries and transaction types, including leveraged buyouts, recapitalizations, corporate divestitures and spin-offs, build-ups and venture stage investing. The firm has approximately $12 billion of capital under management and is based in San Francisco (www.goldengatecap.com).

Darden Restaurants (NYSE: DRI) is a multi-brand restaurant operator headquartered in Orlando.  The firm owns several casual dining restaurant brands: Olive Garden, LongHorn Steakhouse, Red Lobster, Bahama Breeze, Seasons 52, Eddie V’s Prime Seafood, The Capital Grille and Yard House. Darden has more than 2,100 restaurant locations and more than 200,000 employees, making it the world’s largest full-service restaurant company (www.darden.com).

© 2014 PEPD • Private Equity’s Leading News Magazine • 5-16-14

Spectrum Equity Invests in Verafin

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Verafin, a provider of fraud detection and anti-money laundering software, has received a C$60 million investment by Spectrum Equity.

Spectrum will receive a substantial minority stake in the company in return for its investment which will be used to support Verafin’s rapid growth and continued investment in its Software-as-a-Service platform. RBC Capital Markets acted as exclusive placement agent for the financing.

Verafin is a provider of fraud detection and anti-money laundering (FRAML) software. The company has a customer base of over 1,100 financial institutions across North America. Utilizing advanced behavior-based analytics that help financial institutions prevent fraud and meet BSA, USA PATRIOT Act, and FACTA compliance requirements, Verafin is the exclusive provider of fraud detection and BSA/AML software for the California Bankers Association, Florida Bankers Association, Massachusetts Bankers Association, Illinois Bankers Association and the Credit Union National Association. Verafin maintains industry endorsements in 44 states across the US. The company was founded in 2003 by Jamie King, Raymond Pretty and Brendan Brothers and is headquartered in St. John’s, NL (www.verafin.com).

“We have long been impressed by Verafin’s commitment to developing innovative risk analytics and to harnessing these efforts in a solution that is both state of the art and easy to deploy,” said Chris Mitchell, Managing Director at Spectrum Equity. “Large and small financial institutions alike are converging on Verafin’s FRAML solutions as the optimal way to manage financial risk and to comply with regulation, and we are thrilled to be partnering with Jamie King and the rest of the management team to continue driving Verafin’s rapid growth and building a world class company.”

“Financial institutions are facing ever increasing fraud threats and compliance mandates from regulators, and Verafin is committed to providing our customers with the best software solutions to allow them to effectively fight financial crime,” said Jamie King, CEO of Verafin. “Spectrum brings a wealth of experience working with other high-growth technology businesses of a similar profile to Verafin, and we are excited to welcome them to our team.”

Spectrum Equity invests in growth companies in the information industry with particular interest in internet and digital media; communications, media and entertainment; and software and information. Spectrum Equity has raised $4.7 billion in capital across six funds. The firm was founded in 1994 and has offices in Boston and Menlo Park (www.spectrumequity.com).

© 2014 PEPD • Private Equity’s Leading News Magazine • 5-16-14

Audax Group Acquires MIRATECH

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Audax Group has acquired MIRATECH, a provider of emissions equipment for industrial engines.  As part of this transaction, Audax’s existing portfolio company, Phillips & Temro Industries, will spin off its Silencing Division and simultaneously merged it with MIRATECH to form MIRATECH Group.

“The combination of MIRATECH and PTI’s silencing division allows the combined business to offer a full spectrum of emissions and noise control solutions, while continuing to offer best-in-class products and service to their respective customers,” said Geoffrey Rehnert, Co-CEO of Audax Group.  “We are looking forward to backing Kevin O’Sullivan, CEO of MIRATECH Group, and his team as they grow the business organically and through strategic add-on acquisitions.”

MIRATECH is a provider of emissions solutions for industrial engines. The company’s product suite includes catalysts, housings, silencers, control and monitoring systems and other related services. MIRATECH specializes in high specification solutions sold primarily to engine packagers, engine dealers, engineer procure and construct contractors and end users. The company was founded in 1992 and is headquartered in Tulsa (www.miratechcorp.com).

The Phillips & Temro Industries’ Silencing Division designs and manufactures silencers and exhaust system components for a variety of industrial engine applications through two brands of silencing products: EM Products and Cowl. The company serves manufacturers and distributors in various markets including power generation, off-highway, industrial mobile equipment, commercial marine and gas compression. The division has operations in Minnesota and Winnipeg (www.phillipsandtemro.com).

“Combining these teams gives MIRATECH Group strong expertise in both technology and manufacturing. This larger platform provides a distinct competitive position with the resources to innovate, develop and grow in the global industrial engine space. Our goal is to be a leading provider of engineered emission and noise attenuation solutions within the North American large format industrial engine market. In addition, we are pleased to be working with Audax Private Equity to build the business through organic growth and acquisitions,” said Kevin O’Sullivan, President and CEO of MIRATECH Group.

The Audax Group makes control investments of $10 million to $100 million in middle market companies with transaction values of $25 million to $500 million. Sectors of interest include industrial manufacturing; energy; outsourced industrial services; consumer products; healthcare devices and services; non-asset based logistics; technology; aerospace & defense; business services; and direct marketing. Audax has over $5 billion in assets under management in its private equity, mezzanine, and senior debt businesses. The firm was founded in 1999 and has offices in Boston and New York (www.audaxgroup.com).

Lincoln International advised MIRATECH. Medley Capital, Stellus Capital, and Bank of Oklahoma provided financing to support the transaction.

© 2014 PEPD • Private Equity’s Leading News Magazine • 5-16-14

RLH Exits Cymetrix

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Riordan, Lewis & Haden has sold its portfolio company Cymetrix Corporation, a provider of revenue cycle management services to hospitals, to Navigant for $75 million. Riordan, Lewis & Haden first invested in Cymetrix in June 2005.

Cymetrix is a provider of outsourced business services to major for-profit, faith-based, and community hospital systems. The company serves over 200 hospitals nationwide.  Cymetrix helps its clients improve speed, accuracy, and effectiveness at each stage in the hospital revenue cycle, including gathering patient data, coding medical records, and collecting receivables. Cymetrix is headquartered in Irvine, CA (www.cymetrix.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).

Navigant (NYSE: NCI) is a specialized expert services firm that assists clients in creating and protecting value in the face of business risks and opportunities. 2012 revenues were $845 million and the company has over forty offices across the United States, Canada, Europe, and Asia. Navigant is headquartered in Chicago (www.navigant.com).

© 2014 PEPD • Private Equity’s Leading News Magazine • 5-16-14

Moelis Adds Healthcare IT Pro to Team

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Moelis Capital Partners has appointed John Gomez as an Executive Advisor focusing on healthcare IT investments. He will also provide strategic and operating support to Moelis’ portfolio companies.

Mr. Gomez is currently the CEO of Sensato, a cyber-security and privacy healthcare company, JGo Labs, a product design and management consulting firm, and Group Espada, which provides counter-terrorism services. Previously, Mr. Gomez was the Chief Technology Officer/Co-President of Allscripts, a provider of healthcare information solutions. Mr. Gomez was also the CTO of Eclipsys and WebMD and worked at Microsoft in various capacities.

“Healthcare IT is an increased area of focus for investment opportunities at Moelis Capital Partners and an important aspect of the healthcare companies we look at.  John’s expertise and experience will help us evaluate investment opportunities in this sector,” said Ted Yun, a Managing Partner.

Moelis Capital Partners is a middle market private equity firm founded in 2007 in connection with the formation of Moelis & Company, an independent investment bank. Moelis Capital Partners manages $850 million of committed capital and specializes in traditional private equity investments in the middle market. The firm is based in New York (www.moeliscapitalpartners.com).

© 2014 PEPD • Private Equity’s Leading News Magazine • 5-16-14

Water Street Invests in Orgentec Diagnostika

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Water Street Healthcare Partners has invested in Orgentec Diagnostika, a specialty diagnostics company.  Water Street has committed equity to both acquire a majority position in Orgentec and invest in future acquisitions.

Orgentec specializes in diagnostic assays for autoimmune and infectious diseases. It offers a portfolio of more than 300 tests, primarily enzyme-linked immunosorbent assays (ELISA), that help diagnose rheumatology, thrombosis and gastroenterology disorders, as well as infectious diseases. It also offers an automated instrument and associated test kits that enable laboratories to complete multiple assays and deliver faster results than traditional ELISA tests. The company was founded in 1988 and is headquartered in Mainz, Germany (www.orgentec.com).

The investment in Orgentec expands Water Street’s presence in the specialty diagnostics sector, particularly in Europe and emerging markets. Scott Garrett, former chairman and CEO of Beckman Coulter and senior operating partner with Water Street, will serve as chairman of Orgentec.

“I’m excited to partner with Water Street to expand Orgentec into new areas of testing and increase our presence in emerging markets. Water Street has incredibly deep knowledge and extensive relationships in our industry,” said Dr. Wigbert Berg, who co-founded Orgentec in 1988.  “Its team has worked closely with us to create a plan that supports our goal of thoughtfully growing Orgentec into a global leader that will bring greater value to our customers and employees.”

Dr. Berg will maintain an ownership position in Orgentec and serve on the company’s board of directors. He and Water Street have appointed Werner Hofacher, an executive with more than 30 years of experience in the diagnostics industry, to serve as CEO. Mr. Hofacher most recently led European operations for Beckman Coulter, and previously held leadership positions at Baxter and Dade Behring.

“It is an honor to be selected by Water Street and Dr. Berg to build on Orgentec’s history of success. For more than 25 years, the company has led the industry in developing new tests for complex diseases that were previously difficult to diagnose,” said Mr. Hofacher. “With Water Street’s support, we have a unique opportunity to expand Orgentec’s global position and to grow its portfolio of tests in order to help providers detect rare conditions and positively impact millions of lives.”

Water Street Healthcare Partners targets investments ranging from $50 million to $500 million in four health care sectors: distribution, medical products, health care services, and pharmaceutical products and services. The firm has particular expertise in corporate divestitures from healthcare companies. Water Street has more than $1 billion of capital under management and is based in Chicago (www.waterstreet.com).

Orgentec is Water Street’s third investment in a European-based business and its second new transaction announced in the past six weeks. Last month, Water Street signed agreements to acquire and merge CHS Health Services and Take Care Employer Solutions, a subsidiary of Walgreens.

© 2014 PEPD • Private Equity’s Leading News Magazine • 5-15-14

Dubin Clark Acquires Kellstrom Defense

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The Merex Group, a portfolio company of Dubin Clark & Company, has acquired Kellstrom Defense Aerospace, a provider of aerospace logistics.  This is the fourth add-on acquisition for The Merex Group since being acquired by Dubin Clark in October 2011.

Kellstrom Defense provides aftermarket logistics and inventory support for a variety of defense derivative aircrafts. The company is headquartered in Miramar, FL (www.kellstrom.com).

The Merex Group is a provider of support services for US manufactured legacy defense platforms including aircraft, helicopters and their respective engines.  Supporting more than 35 armed forces worldwide that operate legacy defense platforms, Merex provides spares & components, repair & overhaul management, and project management of systems upgrades. The company is headquartered in Camarillo, CA (www.merexinc.com).

“This transaction reaffirms the opportunity we see to drive consolidation and scale in the global defense aftermarket space. The opportunity to support a strong management team and well-positioned strategy continues to be embraced by our investor base,” said Michael Hompesch, a Partner at Dubin Clark.

GE Antares served as administrative agent on the senior secured credit facility used to support the acquisition of Kellstrom.  GE Capital Markets served as sole lead arranger and joint bookrunner on this facility.

“GE Antares is a valued business partner, bringing more than just capital,” said Mr. Hompesch.  “They also brought GE’s expertise in aerospace, helping us realize the opportunity we see to drive consolidation and scale in the global defense aftermarket space.”

Dubin Clark seeks to acquire manufacturing, value-added distribution, and service companies with $10 million to $100 million in revenues and at least $2 million of EBITDA. The firm was founded in 1984 and is based in Greenwich, CT (www.dubinclark.com). 

© 2014 PEPD • Private Equity’s Leading News Magazine • 5-15-14

AIP Acquires SERVA from Wexford Capital

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American Industrial Partners has completed the acquisition of SG Holdings I, LLC (SERVA), a designer and manufacturer of fracking equipment, from Wexford Capital.

SERVA is a designer and manufacturer of fracking equipment, coiled tubing equipment, and well intervention and workover equipment.  The company’s products are sold primarily in the United States and to an increasing degree in Asia.  SERVA manufactures and distributes coiled tubing, cementer, blender, frack and hydration units at its three manufacturing facilities in Tulsa (OK), Duncan (OK) and Calgary (Canada), and at its distribution facility located in Wichita Falls (TX).  The company currently has 282 full-time employees.  In addition to its North American operations, SERVA has established joint ventures in two Chinese businesses: SJS which produces pumps for fracking related equipment, fluid-end replacement parts, cementing units, data vans, and downhole tools; and SDS which produces downhole cementing tools. The company was founded in 1991 and is headquartered in Tulsa (www.servagroup.com).

“We believe SERVA is currently well positioned to participate in a recovery from what has been a cyclical low point of fracking equipment capital spending,” said Constantinos Coutifaris of AIP.  “The company’s leading edge line of products allows SERVA to compete with differentiated offerings in many important end markets.”

American Industrial Partners invests in North American headquartered industrial companies with sales ranging from $100 million to $500 million. The firm was founded in 1989 and is currently managing more than $1.1 billion in equity capital. American Industrial Partners was founded in 1989 and is based in New York (www.americanindustrial.com).

“We believe that AIP will be a value-added partner for the company going forward,” said Jorge Amador of AIP.  “In collaboration with management, we have developed a compelling operating agenda that will allow SERVA to continue to successfully meet oil and gas customer needs through engineering excellence and new product development.”

The seller of SERVA, Wexford Capital, is an investment advisor with over $4 billion of assets under management.  Sectors of interest include bankruptcy/distressed, energy/natural resources, real estate, technology/telecommunications and transportation.  The firm, which was founded in 1994, manages a series of hedge funds and private equity funds from its Greenwich, CT headquarters (www.wexford.com).

© 2014 PEPD • Private Equity’s Leading News Magazine • 5-15-14

SFW Capital Partners Invests in Essen BioScience

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SFW Capital Partners has made an investment in Essen BioScience.  SFW is partnering in this investment with Essen’s co-founders, Kirk Schroeder and Brad Neagle, who serve as the current President and Vice-President of Operations and Engineering respectively, and its management team.

Essen BioScience is a provider of analytical instrumentation, software, reagents and services used in cell-based life science research.  Essen’s customers include biopharmaceutical companies including Merck, Genentech, Amgen, GlaxoSmithKline, AstraZeneca, Bristol-Myers Squibb and Pfizer, amongst others, and academic and research institutions including Harvard, MD Anderson, Yale, Cambridge, University of Michigan, Tokyo, Seoul National University, and Kyoto University. The company was founded in 1999 by Messrs. Schroeder and Neagle and is based near Detroit in Ann Arbor, MI with additional offices in the United Kingdom and Japan (www.essenbioscience.com).

“Essen exhibits the key characteristics that we look for in our investments in the analytical instrumentation market: high-value products and services, deep customer relationships, and significant opportunities for growth,” said Roger Freeman, SFW Partner, who will be a member of the Essen Board of Directors. “We look forward to partnering with Kirk, Brad and the Essen management team to build on and extend the success of the company.”

With SFW’s strategic support and resources, Essen plans on making investments to further expand its applications and assays, develop and introduce new products, and continue to enhance its sales, service and support capabilities.

“We are very pleased to be partnering with the SFW team, which is a well-known long-term investor and builder of analytical instrumentation businesses,” said Mr. Schroeder. “We are very proud of our current and historical accomplishments here at Essen, and this significant investment serves as a strong endorsement for our business model, growth strategy and future prospects.”

SFW focuses exclusively on analytical tools and related services companies, including providers of instrumentation, software, information and analytical services. SFW typically invests from $10 million to $75 million of equity in middle market companies that have up to $25 million in EBITDA. The firm has offices in Rye, NY and Hudson, OH (www.sfwcap.com).

© 2014 PEPD • Private Equity’s Leading News Magazine • 5-15-14

Arsenal Acquires Service Refrigeration

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Source Refrigeration & HVAC (Source), a portfolio company of Arsenal Capital Partners, has acquired Service Refrigeration, LLC. This is the fourth add-on acquisition for Source since being acquired by Arsenal in January 2007.

Service Refrigeration is a provider of refrigeration and HVAC services to grocery, commercial, and industrial clients throughout the state of Texas.  Services include maintenance programs, emergency repairs, new installations and remodels of mission-critical refrigeration and HVAC systems.  The company has over 150 full time employees in five service regions across Texas.  Service Refrigeration was founded in 1986 by current president W.L. “Butch” Edmonds Jr. and is based in Houston (www.servref.com).

Source Refrigeration & HVAC is a provider of commercial refrigeration and HVAC services to supermarket chains, many of the largest convenience store chains and leading telecom and industrial companies. With over 1200 employees and service locations nationally, Source designs, installs, services, maintains and optimizes mission-critical refrigeration & HVAC systems. The company is headquartered in Anaheim, CA (www.sourcerefrigeration.com).

The acquisition of Service Refrigeration builds on Source’s platform as a leading provider of commercial refrigeration and HVAC services in North America, serving the nation’s top supermarket chains, many of the largest convenience store chains, and leading telecom and industrial companies.

“Service Refrigeration is well-established in the Texas market for mission critical refrigeration and HVAC services and provides Source with complementary capabilities and expanded market coverage in the state. The acquisition of Service Refrigeration demonstrates our continued commitment to further expand and strengthen Source’s national presence and service offering,” said Sal Gagliardo, an Operating Partner at Arsenal Capital Partners.

Arsenal Capital Partners invests in middle-market specialty industrial and healthcare companies that have $50 million to $250 million in enterprise value. Industries of specific interest include specialty & fine chemicals; segments of healthcare; transportation and logistics; power generation; aerospace & defense; and process industry components and services. Arsenal has $1.7 billion of committed capital under management. The firm was founded in 2000 and has offices in New York and Shanghai (www.arsenalcapital.com).

“Service Refrigeration has built a solid reputation for performing with an impressive group of accounts,” said Brad Howard, President and Chief Executive Officer of Source. “We are excited to welcome their employees and their customers into the Source portfolio.  Our combined capabilities will provide a great platform for serving Texas.”

© 2014 PEPD • Private Equity’s Leading News Magazine • 5-15-14

Victory Park Capital Expands Leadership Team

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Victory Park Capital (VPC) has promoted two investment professionals in its Chicago office with the promotions to Principal of Derek Ferguson and Chad Peterson.

“The expansion of our leadership team reflects our initiative to build a strong foundation and more structured platform,” said Richard Levy, co-founder and managing partner of VPC. “These individuals’ contributions to the team are invaluable and their new roles will impact the development of our firm significantly as we continue to position for growth.”

As a Principal, Mr. Ferguson will develop and maintain value creation initiatives and strategic alternatives for VPC’s investments. He will also manage the sourcing, analysis and execution of direct private debt and equity investments in the industrials, energy and natural resources and healthcare sectors for VPC. He will continue to serve as a member of the Board of Directors of VPC’s portfolio companies Enteris Biopharma and Surefire Industries.

Mr. Ferguson joined VPC in 2012. Previously, he was a Vice President with Maxim Partners, a private equity firm that concentrates on entrepreneurial companies in the lower middle market. He also held positions at private equity firms Wynnchurch Capital and Thoma Cressey Equity Partners, and in the M&A Investment Banking division of J.P. Morgan Securities.  Mr. Ferguson received a BS from the University of Illinois and an MBA from Northwestern University.

As a Principal, Mr. Peterson will develop and maintain value creation initiatives and strategic alternatives for VPC’s investments. He will also oversee the sourcing, analysis, execution and management of direct private debt and equity investments in the consumer, restaurant, gaming, lodging and leisure sectors for VPC. He will continue to serve as a member the Board of Directors of VPC’s portfolio company VPC Pizza Operating Corp. (DBA Giordano’s).

Mr. Peterson joined VPC in 2011. Previously, he worked at Qorval, a turnaround advisory and interim-management firm focusing on financial and operational improvements for middle-market companies. He also worked in the Special Situations Group at American Capital and held various financial advisory positions at Bridge Associates and Deloitte Consulting.  Mr. Peterson received a BS from Miami University of Ohio and an MBA from Northwestern University.

Victory Park Capital invests from $10 million to $50 million per transaction in small cap public companies and middle market private companies that typically generate less than $150 million in revenue and less than $30 million of EBITDA. The firm focuses on complex situations and seeks to build long term sustainable value in its companies. Victory Park was founded in 2007 and is based in Chicago with additional offices in Boston, New York and San Francisco (www.victoryparkcapital.com).

© 2014 PEPD • Private Equity’s Leading News Magazine • 5-15-14