Archives for May 2014

Huron Lunches New Specialty Coatings Platform

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Huron Capital Partners has co-founded Valentus Specialty Chemicals in partnership with industry veteran Ray Chlodney in order to build a platform company in the specialty coatings industry.

Through Valentus, Huron Capital plans to invest in regional specialty coatings producers to build a company with technically-advanced and environmentally-friendly reactive coating products serving a variety of end markets and geographies.  According to Huron Capital, the US specialty coatings market is an $18 billion industry.  Valentus will look to acquire companies with at least $20 million of annual revenues and a recurring revenue base with high customer retention.  Product portfolios should also include innovative, environmentally-friendly, and reactive coatings technologies.

“Valentus marks the ninth specialty chemicals business that Huron Capital has funded over the past decade.  Through our established buy-and-build model, the Valentus coatings platform follows our established history of investing in successful niche specialty chemical platforms, including Quest Specialty Chemicals and Bloomer Plastics.  We are surrounding the Valentus initiative with a significant amount of intellectual and financial capital,” said Mike Beauregard, a Senior Partner at Huron Capital.

Huron Capital’s partner in this venture, Ray Chlodney, has spent over 30 years in the specialty chemical industry.  He is the former President and COO of Spraylat Corp and has held executive roles at PPG Industries, Lilly Industries, Bayer Corp, and Benjamin Moore Paints.  His coatings experience includes working as a senior chemist and technical director, as well as director of strategic planning and business development.  He has managed international expansion and acquisition integration, and established partnerships with research institutions to develop next generation coatings technologies.

“We are excited to partner with a proven operator in Ray Chlodney,” said Jim Mahoney, a Partner at Huron Capital.  “The specialty coatings market is highly fragmented, and we expect Ray’s expertise and connections within the industry will be instrumental in identifying, investing in, and growing businesses with market-leading technologies.”

“It is great to work with Huron Capital,” said Mr. Chlodney.  “Since its founding, Huron Capital has a history of partnering with executives in order to create value through buy-and-build strategies.  The specialty coatings market is a perfect fit for our strategy, with a large number of private, family-owned businesses that could benefit from additional capital and operational expertise.”

Huron Capital Partners invests up to $70 million per transaction in middle market companies that have revenues up to $200 million and EBITDAs of $5 million or more. Sectors of interest include education & training, healthcare, specialty chemicals, specialty packaging, consumer products, home decor, business services, industrial manufacturing, food & beverage, and marketing services. The firm was founded in 1999 and currently manages over $1.1 billion in committed equity through four private equity funds. Huron Capital Partners has offices in Detroit and Toronto (www.huroncapital.com).

© 2014 PEPD • Private Equity’s Leading News Magazine • 5-12-14

SunTrust Robinson Humphrey Expands Chicago Corporate Banking Team

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SunTrust Robinson Humphrey (STRH) has added three banking industry veterans to its Chicago-based Midwest Corporate Banking team with the hirings of Wes Frangul, Jonathan Twichell and Mark Wegener.

“Wes, Jon, and Mark are seasoned financial services professionals who share our commitment to meeting the evolving needs of clients over the long term,” said Ted Heldring, head of Midwest Corporate Banking. “Their experience and knowledge of the Midwest, combined with STRH’s full suite of financial capabilities and industry-specific expertise, will allow us to help more clients across the region grow their business.”

A 29-year veteran, Mr. Frangul joins STRH from NewStar Financial and BMO Capital Markets.  At NewStar, Mr. Frangul was responsible for leveraged finance origination in the Midwest and Western US, and at BMO Capital Markets he was responsible for industrial & sponsor investment banking origination.

Mr. Twichell has 25 years of experience in the greater Chicago area, most recently with HSBC and JPMorgan, where he managed general corporate banking relationships across the Midwest.

Mr. Wegener brings to STRH nearly 30 years of banking experience in the Midwest, including commercial and corporate banking positions at US Bank, The Royal Bank of Scotland, and JPMorgan, where he covered mid-cap companies across the Midwest.

The STRH Midwest Corporate Banking team offers corporate and investment banking products and services, including debt and equity capital markets, treasury and payment solutions, financial risk management, foreign exchange, M&A advisory, and liquidity and investment products to clients in nine Midwestern states. STRH has recently extended its reach to middle market businesses and corporate clients, with new offices in Dallas and San Francisco and key hires in Charlotte and other target cities (www.suntrustrh.com).

© 2014 PEPD • Private Equity’s Leading News Magazine • 5-12-14

Greene Holcomb Fisher Advises Klement’s On Sale to Altamont

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Investment bank Greene Holcomb Fisher was the advisor to Klement Sausage Co. on its recent sale to Tall Tree Foods, a portfolio company of Altamont Capital Partners.

Klement Sausage is a manufacturer of smoked, fresh and summer sausage, snack sticks and deli meats. The company was founded in 1956 by three brothers – George, John and Ron Klement – and is based in Milwaukee (www.klements.com).  Ray Booth, the current CEO of Klement’s, will continue to lead the business along with the current management team which is based in Milwaukee.

“Over a period of nearly 50 years, the Klement family nurtured and grew a business that developed an iconic brand associated with authentic, butcher block quality sausage and related meat products.  This transaction represents an exceptional opportunity for Klement’s management and Altamont to extend the legacy of the Klement family by driving continued growth on a national basis,” said Eric Nicholson a Managing Director at Greene Holcomb Fisher.

Greene Holcomb & Fisher maintains offices in Minneapolis, Phoenix, Seattle and Atlanta and specializes in middle market mergers and acquisitions, private placements and financial advisory services (www.ghf.net).

Tall Tree Foods is a food holding company backed by Altamont Capital.  In June 2013, Tall Tree Foods acquired Blue Ribbon, a bacon and sausage brand, and Richard’s Cajun Foods, a manufacturer of sausage and ready-to-eat meals. Tall Tree Foods is led by Tim Bruer, CEO of Tall Tree and an Operating Partner of Altamont.

Altamont Capital Partners invests in middle market businesses with specific interest in the government services, financial services, consumer/retail, industrials, and healthcare sectors.  Altamont has approximately $1.3 billion of capital under management.  The firm was formed in 2010 by Jesse Rogers, Randall Eason and Keoni Schwartz who previously worked together at Golden Gate Capital and Bain & Company.  Altamont Capital Partners is based in San Francisco (www.altamontcapital.com).

© 2014 PEPD • Private Equity’s Leading News Magazine • 5-12-14

Highlander Exits SensoryEffects

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Highlander Partners has sold its portfolio company, SensoryEffects, to Balchem Corporation, a publicly-traded human and animal health and wellness company, for $567 million.  According to Highlander Partners, the investment in SensoryEffects is the most successful one in the firm’s history.

SensoryEffects is a supplier of customized food and beverage ingredients and products. The company operates through three divisions: (1) SensoryEffects Powder Systems with locations in Ohio, Pennsylvania, Wisconsin and Minnesota; (2) SensoryEffects Flavor Systems located in Bridgeton, MO, and (3) SensoryEffects Cereal Systems located in Lincoln, NE. SensoryEffects is headquartered in St. Louis (www.sensoryeffects.com).

The sale of SensoryEffects to Balchem represents the culmination of eight years of collaboration and enterprise building between Highlander Partners and SensoryEffects’ founder, Chairman and CEO, Charles Nicolais, and the management team he assembled.

In 2005, Highlander decided to partner with SensoryEffects to consolidate and professionalize certain segments of the food ingredient manufacturing industry.  SensoryEffects first acquisition in the spring of 2006 was Diehl, a 125 year old family-owned business located in Defiance, OH, with revenues of approximately $15 million.  After eight years and twelve additional acquisitions, substantial organic growth, millions of dollars of capital expenditures and investment in human resources, SensoryEffects now has six manufacturing sites that in 2014 are expected to generate revenues of $260 million and EBITDA $53 million.

During the term of ownership, the relationship between SensoryEffects and Highlander Partners was highly collaborative.  While the day-to-day running of the business was always in the hands of management, there was constant interaction and communication between senior management and Highlander team members, particularly in the areas of acquisition strategy, tactics and negotiations; new product development projects; management recruiting; budgeting; development of key performance indicators; and overall business philosophy.

Highlander Partners makes investments in middle market businesses in targeted industries in which the principals of the firm have significant operating and investing experience. Sectors of interest include healthcare, basic manufacturing, food, and building materials. The firm has over $600 million in capital under management and is based in Dallas (www.highlander-partners.com).

Balchem Corporation (NASDAQ: BCPC) develops, manufactures, and sells specialty performance ingredients and products for the food, nutritional, feed, pharmaceutical, and medical sterilization industries in the United States and internationally. The company operates in three segments: Specialty Products; Food, Pharma & Nutrition; and Animal Nutrition & Health. Balchem is headquartered outside of New York City in New Hampton, NY (www.balchem.com).

© 2014 PEPD • Private Equity’s Leading News Magazine • 5-8-14

Graycliff Partners Acquires Ameritherm

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Graycliff Partners has acquired Ameritherm (DBA Ambrell), a designer and manufacturer of induction heating products and systems.  Exium Partners co-invested with Graycliff on this transaction.

“We are very excited to partner with Ambrell,” said Andrew Trigg, Managing Director, Graycliff Partners. “Ambrell provides proprietary heating products to a loyal global customer base and as a result has experienced 25 years of strong success. We see a great deal of growth opportunities for the company and look forward to partnering with management to continue to offer new products and to expand both in the US and internationally.”

Ambrell designs, manufactures, and markets induction heating products, which may be sold individually or as part of an Ambrell system-solution.  The company products are sold globally to energy, electronics, medical, and general industrial manufacturers.  Ambrell was founded in 1989 and is based near Rochester in Scottsville, NY and operates foreign subsidiaries in the United Kingdom, France and the Netherlands (www.ambrell.com).

“Graycliff’s success and deep experience in investing in the manufacturing industry appealed to us as we looked for the right partner to take Ambrell to the next stage of growth,” said Richard Rosenbloom, Chief Executive Officer, Ambrell. “We are excited to partner with their team, and we look forward to leveraging their expertise and proven investment approach to continue to grow the company and service our global clients.”

Graycliff Partners invests from $5 million to $25 million of equity and mezzanine capital in companies with revenues of at least $10 million and EBITDA margins of 10% or higher. Sectors of interest include manufacturing, services and distribution.  Both control and minority investments are considered. The firm was formed in December 2011 by the former investment team of HSBC Capital.  Graycliff Partners is headquartered in New York with an additional office in São Paulo (www.graycliffpartners.com).

“The Ambrell management team is experienced, committed, and guided by the same core values that we believe help build strong, sustainable businesses,” said Jeff Valentine, Partner, Exium Partners.

Exium Partners is an operationally-focused investment group that invests in companies with revenues of $5 million to $100 million and EBITDA of $2 million to $20 million. Sectors of interest include business services, software, digital media, manufacturing, telecommunications, and financial technology & services. Exium Partners is based near Rochester in Fairport, NY (www.exiumpartners.com).

© 2014 PEPD • Private Equity’s Leading News Magazine • 5-8-14

Teakwood Capital Sells ExamSoft to Spectrum

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ExamSoft, a provider of computer-based testing services and a portfolio company of Teakwood Capital, has been acquired by Spectrum Equity.  Daniel Muzquiz, Chief Executive Officer, and David Schnabel, President, as well as the rest of the senior management team of ExamSoft will continue to lead the company. Teakwood acquired ExamSoft in June 2010.

ExamSoft is a provider of computer-based testing software to academic institutions and professional certification entities.  ExamSoft is used by more than 550 clients, including an array of higher education institutions and 43 of the 50 US state bar examiners.  The company has offices in Dallas (headquarters) and Boca Raton (www.examsoft.com).

Teakwood Capital invests equity capital primarily in technology enabled business-to-business companies with revenues of less than $25 million and EBITDAs from $500,000 to $3 million. The firm focuses on management buyouts as well as control growth equity investments. Teakwood Capital was founded in 2005 and is based in Dallas (www.teakwoodcapital.com).

“Teakwood is proud of this investment and what ExamSoft’s talented management team has achieved. The team briskly grew revenues by expanding within its core markets while also developing new products to target large, adjacent markets,” said Shawn Kelly, Managing Director at Teakwood Capital. “ExamSoft is a great example of the operational and strategic value Teakwood delivers by working closely with a portfolio company team to jumpstart growth and achieve its true potential.”

The buyer of ExamSoft, 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).

“As technology and software continue to impact education, and as curricular design, testing and accreditation continue to shift in response to these changes, we believe market demand for assessment management solutions will continue to grow,” said Steve LeSieur, Principal of Spectrum Equity. “We view ExamSoft as a growth platform with exceptional management and technology that should scale considerably over the coming years as the company expands its portfolio of products and services offered to clients. We feel very fortunate to be partnered with Daniel, David and the entire ExamSoft team.”

Mid-market investment bank MHT MidSpan (www.mhtmidspan.com) acted as the exclusive financial advisor to ExamSoft in the transaction.

© 2014 PEPD • Private Equity’s Leading News Magazine • 5-8-14

OFS Closes Third Fund at $175 Million Hardcap

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OFS Energy Fund (OFS) has held a final closing of its third private equity fund (Fund III) which was well oversubscribed at its $175 million hard cap.  The new fund closed in less than 90 days from the start of fundraising.

As with the firm’s prior funds, Fund III will maintain the focus of acquiring and recapitalizing middle-market companies in the energy service industry.  OFS’ first fund (Fund I) had $47 million in commitments and was raised primarily from energy industry executives and closed in 2008 and has achieved in excess of four times cash-on-cash returns. The firm’s second fund (Fund II) has $90 million in commitments and is 80% deployed with six remaining platform companies and two other companies that sold for approximately four times cash-on-cash returns.

“We are very honored to have the opportunity to continue to work with sophisticated private and public institutional investors as well as our core of energy industry executives who have invested across Fund I to Fund III. We are also pleased to have our portfolio company CEOs from Fund I continue to invest in Fund II and Fund III reflecting their belief in our ability to find good company investments and add value as we work with our management teams to rapidly grow the underlying business,” said Bruce Ross, managing partner of OFS.

In addition to a number of energy industry executives who invested previously in the first two funds, Fund III has new limited partners including an Ivy League university endowment, a private pension plan for a Fortune 100 company, a private charitable endowment, multiple public pension plans and fund of funds investors.

The OFS’ team has significant experience in the energy service market, including direct executive operating responsibilities.  The entire operating team from OFS’ prior funds remains together to manage Fund III.  This includes Bruce Ross, Jerad McMayon, Scotty Reynolds, Ross Canion and Logan Kelley.

Two new members have joined the OFS team to help manage Fund III. Frank Schageman, former CFO of R360 Environmental Solutions, has joined OFS as an Operating Partner where he oversees portfolio company initiatives and assists the deal team in evaluating transaction opportunities.  Robert Whilden, former Executive Vice President of Continental Energy Services, has joined OFS as a Principal where he assists in identifying, evaluating and executing new investments as well as supports various portfolio company initiatives.

OFS specializes in acquiring and recapitalizing lower middle-market energy service companies with enterprise values between $5 million and $150 million.  Combining Fund II and Fund III, OFS now has $265 million of capital under management. OFS is based in Houston (www.ofsfund.com).

© 2014 PEPD • Private Equity’s Leading News Magazine • 5-8-14

Arsenal Acquires RTH Processing and RDT Manufacturing

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Arsenal Capital Partners’ portfolio company Accella Performance Materials (rebranded from Dash Multi-Corp) has acquired RTH Processing and RDT Manufacturing.  The acquired companies will be owned by Ultimate RB, a new wholly owned subsidiary of Accella Performance Materials.

“RTH Processing and RDT Manufacturing have a long history of innovation in the custom colored EPDM and recycled rubber market that fits very well with Accella’s history and culture.  The custom color compounding technology continues to evolve and address unmet needs in the market.  As we expand the Accella recycled rubber and polyurethane systems businesses, this will help support our customers in their growth,” said John Televantos, a Partner at Arsenal Capital Partners and co-head of the firm’s Specialty Industrials Group.

RTH Processing is the largest US manufacturer of colored EPDM (ethylene propylene diene monomer rubber – a type of synthetic rubber) rubber granules.  These products are used in poured-in-place playground surfacing, running tracks, athletic flooring and custom molded products.  The granules are available in a variety of standard colors and the company also develops custom colors.  RTH Processing was founded in 1989 and operates out of a single manufacturing facility – that it shares with RDT Manufacturing – in Delphos, OH (www.rthprocessing.com).

RDT Manufacturing (DBA Ultimate Systems) produces rolled rubber products and tiles made from recycled materials.  Specific products include athletic flooring for use in fitness centers and commercial flooring for use in schools, offices, retail and healthcare facilities.  The company also manufactures acoustical underlayment, load containment matting and molded interlocking pavers. RDT was founded in 2000 and operates out of a single manufacturing facility – that it shares with RTH Processing – in Delphos, OH (www.ultimatesystemsltd.com).

“RTH Processing and RDT Manufacturing represent ideal additions to the Accella Performance Materials platform,” said Accella CEO, Andy Harris. “In addition to bringing expanded capabilities and colored EPDM technology to our recycled rubber products business, they will allow for tremendous cross-selling opportunities with our polyurethane business in the athletic surfacing market.  With the combination of RTH Processing, RDT Manufacturing and Accella’s RB Rubber, we are now the only manufacturer in the world that offers complete “custom” systems encompassing all of the components of playground surfacing and running tracks.”

Accella is a manufacturer of custom formulated polyurethane systems, specialty vinyl plastisols and recycled rubber products.  The polyurethane business is focused on tire-fill, foams, adhesives, sealants and elastomers.  Primary end-use products for plastisols include caps and closures, adhesives and carpet/rug backings.  The recycled rubber products business manufactures recycled tire crumb, equine matting, athletic flooring, playground surfacing and custom molded products.  The company has ten production facilities across the United States, one in the UK and one in China.  Accella is headquartered in St. Louis (www.accellacorp.com).

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).

© 2014 PEPD • Private Equity’s Leading News Magazine • 5-7-14

Wind Point Acquires Stevens Urethane

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Wind Point Partners’ portfolio company Argotec has acquired Stevens Urethane, a division of JPS Industries.  This is the first add-on acquisition for Argotec since being acquired by Wind Point in May 2013.

“Part of our original value creation plan at Argotec was to acquire businesses that gave Argotec access to new customers and new products. The Stevens acquisition is a great opportunity to expand into complementary markets with minimal customer overlap,” said Paul Peterson, a managing director at Wind Point.

Stevens Urethane is a polyurethane manufacturer in blown film, extruded sheet, tubing, cord, and profile form. The company’s products are used by OEMs in a wide variety of “can’t fail” applications in a range of markets, including medical, industrial, sporting goods, and consumer products.  The company is based in Easthampton, MA (www.stevensurethane.com).

Argotec is a manufacturer of specialty polyurethane film and sheet with used in a variety of niche applications, including surface protection and impact resistant glass.  Argotec is headquartered in Greenfield, MA (www.argotec.com).

Wind Point acquired Argotec in May 2013 in partnership with Guy Broadbent, who joined the company as CEO.  Mr. Broadbent has 27 years of experience in the plastics, specialty chemicals and technical & manufacturing industries, most recently serving as CEO of Xcellerex, an early stage bio-manufacturing business.  Prior to that, he was President of the $1.8 billion Laboratory Products Group at ThermoFisher Scientific.

“Stevens is an ideal fit for Argotec,” said Mr. Broadbent.  “Stevens brings Argotec new technical and manufacturing resources that will allow us to meet the rapidly increasing global demand for TPU film and sheet. We look forward to continuing to meet our customers’ application challenges and provide the excellent products and high level of customer service that Stevens and Argotec customers expect.”

Wind Point Partners invests from $20 million to $70 million of equity in companies with revenues from $100 million to $500 million and EBITDAs of at least $8 million. Industries of interest include business services, consumer products, healthcare and industrial products. The firm has approximately $2.5 billion in capital under management and has completed more than 90 investments and 161 add-on acquisitions across its seven private equity funds. Wind Point Partners is based in Chicago (www.wppartners.com).

© 2014 PEPD • Private Equity’s Leading News Magazine • 5-7-14

Encore Exits PhillySwirl

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Encore Consumer Capital has sold its portfolio company Swirl Holdings (DBA PhillySwirl), a manufacturer and marketer of frozen novelty products, to J&J Snack Foods (NASDAQ: JJSF).

PhillySwirl is a niche manufacturer and marketer of kid-oriented frozen novelty products sold through club stores and retail grocery stores.  PhillySwirl’s annual revenues are approximately $25 million. The company was founded in 1992 and is based in Tampa (www.phillyswirl.com).

“Encore is very pleased to have had the opportunity to work with the great team at PhillySwirl. The company has become the leading frozen novelty innovator for grocery and club store retailers across North America,” said Robert Brown, managing director of Encore Consumer Capital.

“I joined PhillySwirl in 2009 because I saw an opportunity for PhillySwirl to become the leading innovator in the frozen novelties space and work with a partner like Encore that understands the food industry so well and would give me the strategic guidance to succeed. I am very happy with the outcome,” said PhillySwirl CEO Jan Grywczynski.

Encore Consumer Capital invests exclusively in consumer products companies that have revenues between $10 million and $100 million and where it can utilize its own consumer experience and the expertise of its operating partners at Encore Associates, a strategic advisory firm to the consumer products industry. The firm has raised nearly $400 million in equity capital and invested in 16 companies.  Encore Consumer Capital was founded in 2005 and is headquartered in San Francisco (www.encoreconsumercapital.com).

© 2014 PEPD • Private Equity’s Leading News Magazine • 5-7-14

Wind Point and Teachers Acquire Lance Private Brands

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Shearer’s Foods, a portfolio company of Wind Point Partners and Ontario Teachers’ Pension Plan (Teachers’), has signed an agreement to acquire Lance Private Brands, a private label manufacturer of cookies, crackers and wafers, from Snyder’s-Lance (NASDAQ:LNCE). The transaction is expected to close in the second quarter of 2014.

Lance Private Brands is a private label manufacturer of cookies, crackers and wafers and operates as a division of Snyder’s-Lance (NASDAQ:LNCE). Lance Private Brands is based in Burlington, IA (www.lanceprivatebrands.com).

Wind Point and Teachers’ acquired Shearer’s in October 2012 in partnership with CJ Fraleigh, who joined as Chairman and CEO. Mr. Fraleigh, who most recently served as CEO of Sara Lee – North America, has 25 years of experience in consumer products.  Lance Private Brands will be Shearer’s second add-on acquisition. Shearer’s acquired Medallion Foods, a manufacturer of tortilla chips, corn chips and cheese snacks, in April 2014.

“Lance Private Brands is a transformative acquisition for Shearer’s, significantly expanding our product offerings,” said Mr. Fraleigh. “With this acquisition, Shearer’s is well-positioned to capitalize on the growth of contract manufacturing and private label brands with new product capabilities in cookies and crackers, in addition to our existing salty snack products.”

Shearer’s is the largest producer of private label salty snacks in North America and the largest producer of kettle cooked potato chips in the world. Shearer’s produces a range of salty snack products including kettle cooked potato chips, traditional potato chips, tortilla chips, rice crisps, cheese curls and other extruded snacks, and whole grain chips.  Shearer’s manufactures both branded and private label snacks for retailers and contract manufactures for some of the nation’s largest branded snack food companies. Shearer’s operates six manufacturing facilities in Ohio, Texas, Arkansas, Oregon and Virginia and is headquartered south of Cleveland in Massillon, OH (www.shearers.com).

Wind Point Partners invests from $20 million to $70 million of equity in companies with revenues from $100 million to $500 million and EBITDAs of at least $8 million. Industries of interest include business services, consumer products, healthcare and industrial products. The firm has approximately $2.5 billion in capital under management and has completed more than 90 investments and 162 add-on acquisitions across its seven private equity funds. Wind Point Partners was founded in 1984 and is based in Chicago (www.windpointpartners.com).

“Lance Private Brands is an exciting opportunity for Shearer’s. Acquisitions like Lance are a strategic element of our value creation plan for Shearer’s. CJ has an excellent track record of integrating and growing add-on acquisitions, and we’re excited about the growth potential of the combined businesses,” said Mark Burgett, a managing director at Wind Point.

Teachers’ Private Capital is one of the world’s largest private equity investors, having participated as a long-term investor in numerous management buyouts in Canada, the United States and Europe. It is the private investment division of the Ontario Teachers’ Pension Plan, the largest single-profession pension plan in Canada. Teachers’ Private Capital is based in Toronto with offices in New York and London (www.teachersprivatecapital.com).

© 2014 PEPD • Private Equity’s Leading News Magazine • 5-7-14

Post Capital Acquires Waste Management Puerto Rico Operations

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An investment group led by Post Capital Partners has acquired the solid waste operations of Waste Management (NYSE: WM) 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.

“An important element of the sales process was finding a new ownership team that understands the waste management industry from the bottom up,” said Waste Management’s Vice President of Supply Chain, David McConnell. “We are pleased to participate as investors in EC Waste and look forward to working with the new ownership team.”

EC Waste is a waste management provider in the Commonwealth of Puerto Rico, with fully integrated operations that include four hauling operations, two transfer stations and three landfills. The landfill facilities include two of the island’s three Subtitle-D landfills which are licensed to receive household waste, non-hazardous sludge, industrial solid waste, and construction and demolition debris.  EC Waste will be headquartered southeast of San Juan in Humacao, with additional facilities in San Juan, Caguas, Peñuelas, Humacao, and Mayagüez.

“We are pleased to continue working with our industrial and commercial customers as well as our major municipal customers in San Juan, Caguas, Humacao, and Mayagüez to provide high quality, environmentally sound services,” said EC Waste Chief Executive Officer Randy Jensen. “EC Waste has a talented and seasoned workforce, and we anticipate increasing employment opportunities in Puerto Rico as EC Waste invests in growth initiatives. At the same time, we will focus on simplified invoicing and enhancing the customer experience, while providing additional resources focused on expanding our relationships with existing customers and attracting new customers.”

Randy Jensen started his career in suburban Chicago on the back of a garbage truck at a small private hauling company before working his way up to facilities management, operations management, sales, and senior management positions at large waste management companies. He was a regional manager for American Disposal Services (ADSI) prior to ADSI’s acquisition by Allied Waste. Following Allied Waste’s sale to Republic Services, he served as Republic’s Area President for the Gulf Coast.

Post Capital invests from $5 million to $15 million of equity in companies with $10 million to $150 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.  The firm is making investments out of its second investment fund. Post Capital is based in New York (www.postcp.com).

Waste Management is a provider of waste management services in North America. Through its subsidiaries, the company provides collection, transfer, recycling and resource recovery, and disposal services. The company is based in Houston (www.wm.com).

Banco Popular de Puerto Rico provided debt financing for the transaction.

© 2014 PEPD • Private Equity’s Leading News Magazine • 5-7-14

American Capital Launches New Lower Middle Market Fund

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American Capital has 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.

Prior to the closing of ACE III, 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 the investor group and American Capital to allow ACE III to make new investments in companies with $5 million to $25 million of EBITDA. The closing of ACE III fund is expected to occur within 90 days.

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 pleased to announce the signing of ACE III,” said Malon Wilkus, American Capital Chairman and CEO.  “ACE III significantly diversifies and enhances our asset management franchise and expands our institutional investor base.  This is another example of using our well capitalized balance sheet to incubate new funds under management.”

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).

“We welcome our new partners investing in ACE III,” said Tom McHale, American Capital Senior Vice President, Finance.  “Our limited partners are diversified across various types of institutions, individuals and geographies.  We thank them for their support of American Capital and look forward to continued success with them in ACE III.”

The Private Fund Group of Credit Suisse is serving as the exclusive placement agent for the transaction.

Kirkland & Ellis is serving as lead counsel to American Capital on the transaction.  The Kirkland team is led by private funds partners Bruce Ettelson, Michael Belsley and Jeff Kaplan.

Fried, Frank, Harris, Shriver & Jacobson is serving as lead counsel to the funds advised by Coller Capital, Goldman Sachs Asset Management and StepStone Group.

© 2014 PEPD • Private Equity’s Leading News Magazine • 5-7-14

LBC Backs Frontenac Add-on of Rite Way Service

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LBC Credit Partners has agented a second lien term loan to Diversified Maintenance Systems, a portfolio company of Frontenac Company.  Proceeds from the facility were used to finance Diversified’s recent acquisition of Rite Way Service and to refinance existing indebtedness.  Frontenac first invested in the Diversified in 2010.

Rite Way is a regional provider of janitorial and facility services in the Southeastern US.  Rite Way serves customers across a range of end markets that include manufacturing operations, commercial office buildings, financial institutions, airports, government buildings, educational facilities, and public utilities. The company is headquartered in Birmingham, AL (www.ritewayservice.com).

Diversified Maintenance Systems is a national provider of outsourced janitorial and facilities maintenance services to major retailers, logistics firms and grocery stores.  Customers include Best Buy, Home Depot, JC Penney, Kroger, Sears/Kmart, Target and UPS.  Diversified was founded in 1997 and is headquartered in Tampa (www.diveinc.com).

LBC Credit Partners is a provider of middle market financing to companies with EBITDAs generally greater than $10 million. Products include senior term, unitranche, second lien, junior secured and mezzanine debt and equity co-investments supporting sponsored and non-sponsored transactions. LBC invests from $10 million to $50 million per transaction supporting acquisitions, growth strategies, refinancings, recapitalizations, and restructurings. LBC has more than $1.4 billion of capital under management and is headquartered in Philadelphia with additional offices in Chicago and New York (www.lbccredit.com).

Frontenac Company invests in mid-sized businesses that operate primarily in the business services, industrial, food, and healthcare industries.  Frontenac has completed over 25 buyout transactions and nearly 60 add-on acquisitions since 2000, and more than 70 platform acquisitions in the last 30 years. The firm was founded in 1971 and is headquartered in Chicago (www.frontenac.com).

© 2014 PEPD • Private Equity’s Leading News Magazine • 5-7-14

Tech Banker J. Stuart Francis to Join Evercore

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Investment bank Evercore has hired J. Stuart Francis as a Senior Managing Director in its Technology Group.  Mr. Francis will be based in Evercore’s office in Menlo Park.

Mr. Francis, who will join Evercore in August, was most recently Vice Chairman of Investment Banking and Chairman of the Global Technology Group for Barclays since 2008, when Barclays purchased the US businesses of Lehman Brothers.  Prior to that, he was Vice Chairman of Lehman Brothers and Chairman of the Lehman Brothers Global Technology Group since 2003. He was Head of the Global Technology Group at Lehman Brothers from 1991 to 2003 where he was a member of the Lehman Brothers Investment Banking Executive Committee and the Operating Committee.

“Since inception, Evercore’s business philosophy has been summarized in the same two words: excellence and integrity. It would be hard to find a senior banker who better epitomizes these attributes than Stu Francis, and that’s why we are so excited to have him join us. He is the ideal senior banker to lead our Silicon Valley business, where we are engaged in a long-term build-up and which is a top priority for the firm,” said Roger Altman, Evercore’s Executive Chairman.

Mr. Francis’ recent transactions include advising Qualcomm on the sale of its Omnitracs division to Vista Equity Partners for $800 million and on the sale of its BWA division to Bharti for $1 billion, advising Google on the sale of its Motorola cable TV set top box business to Arris for $2.4 billion, serving as joint book runner for Facebook on its $16 billion IPO, its $4 billion equity follow-on offering and its $6.5 billion credit facility, and advising Abbott Labs on its $55 billion spin-off of AbbVie.

“Stu’s extraordinary experience, judgment, broad network of relationships and reputation for integrity will serve our technology clients well.  He is an important addition to the build-out of our world-class technology effort, which in recent years has provided advisory services to clients like Dell, Samsung, Accenture, Ericsson, Nokia, Nuance, and many others,” said Ralph Schlosstein, Evercore’s CEO.

Evercore Partners is an investment banking boutique providing advisory services to multinational corporations on mergers, acquisitions, divestitures, restructurings and other strategic corporate transactions. Evercore also has an investment management business through which it manages private equity and venture capital funds for institutional investors. The firm has offices in New York; Boston; Waltham, MA; Chicago; Houston; Los Angeles; Minneapolis; Menlo Park; San Francisco (2 offices); Washington DC; Toronto; London; Madrid; Singapore; Aberdeen, Scotland; Mexico City and Monterrey, Mexico; Hong Kong; and Rio de Janeiro and São Paulo, Brazil (www.evercore.com).

“It is clear that Evercore has a leading strategic advisory business and a rapidly expanding equity business. I look forward to helping deliver these critical skill sets to the global technology marketplace in a highly focused manner,” said Mr. Francis.

© 2014 PEPD • Private Equity’s Leading News Magazine • 5-7-14

American Capital Hits 17% Return on Sale of Specialty Brands

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American Capital has sold its portfolio company BCCK Holdings, parent to Specialty Brands of America, to B&G Foods.  American Capital and its affiliated funds received $93 million in equity proceeds and realized a gain of $60 million from the transaction.  American Capital first invested in Specialty Brands in December 2003.

Of the $93 million in total proceeds, American Capital received $54 million in equity proceeds, realizing a gain of $35 million and also recognized $20 million of dividend income and additional realized gains over the life of its investment.  American Capital’s compounded annual rate of return earned on its debt and equity was 17%, including interest, realized gains and fees.  American Capital received 2.2 times its equity investment, and realized a compounded annual rate of return of 19% over the life of its equity investment, including dividends and fees.

Specialty Brands of America (SBA) is a packaged foods company with a portfolio of brands in a variety of food categories.  The company’s largest brand is Bear Creek Country Kitchens, a brand of dry soups, pasta dishes and rice dishes.  Specialty Brands also offers Spring Tree, Cary’s and MacDonald’s pure maple syrups and pancake syrups, New York Flatbreads and Canoleo margarine.  Specialty Brands is based on Long Island in Westbury, NY (www.sbamerica.com).

American Capital invested $68 million in the acquisition of SBA in December 2003. American Capital’s investment took the form of a revolving credit facility, senior term debt, senior and junior subordinated debt, redeemable preferred stock and common equity.  In May 2005, American Capital invested an additional $55 million in a revolving credit facility, senior term loans, senior and junior subordinated debt and convertible preferred equity to support SBA’s acquisition of Bear Creek.

“We are delighted with the results of our investment in SBA and proud of how the company excelled throughout our investment and solidified its leading position within the packaged foods industry,” said Brian Graff, American Capital Senior Managing Director.  “Our investment in SBA is an excellent example of American Capital’s One Stop Buyout strategy of investing in middle market companies with strong market positions and partnering with management teams to enhance performance, grow operations and create value.”

“Since our initial investment in 2003, we helped SBA achieve significant growth through acquisitions, new product launches and existing product enhancements,” said Jim Gregory, American Capital Principal, Buyouts Group.  “We are pleased to have supported SBA’s successful acquisition and integration of Bear Creek in 2005, which resulted in a new suite of nationally known food products as well as significant operational synergies.  SBA owns leading brands in the pure maple syrup, sugar free table syrup and hearty dry soups categories and we believe it is a direct fit for B&G Foods’ family of top brands.

“B&G Foods (NYSE:BGS) and its subsidiaries manufacture, sell and distribute a portfolio of branded shelf-stable foods across the United States, Canada and Puerto Rico. B&G Foods is based in Parsippany, NJ (www.bgfoods.com).

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).

“Our close working relationship with American Capital allowed us to significantly invest in our business to drive growth.  We worked together to expand our product offering, enhance distribution efficiencies and ultimately increase our profitability.  They understood our strategic vision for SBA and our products and together worked with us to advance SBA and as such, we are poised for even more growth under B&G Foods’ leadership,” said Dom Bastien, SBA Founder and Chief Executive Officer.

Evercore acted as exclusive financial advisor to American Capital on the transaction.

© 2014 PEPD • Private Equity’s Leading News Magazine • 5-6-14

Golub Backs Battery Ventures Recap

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Golub Capital was the Sole Bookrunner and Administrative Agent on a senior credit facility to support the recapitalization of Data Innovations by Battery Ventures, which first invested in the company in 2010.

Founded in 1989, Data Innovations is a clinical and blood laboratory middleware company. The company products are used to manage laboratory operations, including pre-analytical, analytical, and post-analytical sample processing and non-clinical tasks such as equipment maintenance and specimen archiving.  Data Innovations is headquartered in South Burlington, VT and has additional offices in Belgium, Brazil, China, France, and the United Kingdom (www.datainnovations.com).

“Consistent with our past experiences, Golub’s deep understanding of the software and technology services industry, ability to offer value-added financing solutions across the capital structure, and efficient execution led to a smooth closing. We look forward to closing additional transactions with Golub in the future,” said Chelsea Stoner, a General Partner at Battery Ventures.

Golub offers buy-and-hold products ranging from $10 million to $75 million and includes one-loan financings, senior, 2nd lien and subordinated debt, preferred stock and co-investment equity. The firm underwrites and syndicates first lien loans up to $300 million. Golub Capital will hold up to $200 million per transaction. Industries of interest include consumer products, business and consumer services, defense, manufacturing, value-added distribution, media, healthcare services and restaurants. Golub has offices in New York and Chicago (www.golubcapital.com).

“With their strong market leadership, differentiated products, and excellent management team, Data Innovations is well positioned to capitalize on the attractive market dynamics within the laboratory middleware industry,” said Andy Steuerman, Head of Middle Market Lending at Golub Capital. “We are excited to partner with this exceptional company and sponsor.”

Battery Ventures invests in seed, early, growth and buyout opportunities in technology and related markets. Sectors of specific interest include software and services, web infrastructure, e-commerce, digital media and industrial technologies. The firm was founded in 1983 and is based in Boston with additional offices in Silicon Valley and Israel (www.battery.com).

© 2014 PEPD • Private Equity’s Leading News Magazine • 5-6-14

Monroe Capital Adds Levine Leichtman Debt Pro to Team

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Monroe Capital has hired Lee Stern as a new Managing Director in the firm’s New York office.  Mr. Stern comes to Monroe from Levine Leichtman Capital Partners where he was a Managing Director responsible for expanding the firm’s credit strategies platform. He joined Levine Leichtman in October 2012.

“We are very excited to add Lee Stern to the Monroe Capital team,” said Ted Koenig, President & CEO of Monroe Capital. “He has an accomplished career providing debt solutions to middle-market companies and brings with him creativity and structuring expertise across multiple industries. Lee will lead the Monroe effort in working with our important club and co-lending investment partners as well as assist in expanding the firm’s efforts in the junior capital area for both private equity sponsored and non-sponsored transactions.”

Prior to his time at Levine Leichtman, Mr. Stern was a Director and founding member of KKR’s mezzanine debt business where he was a key participant in raising the largest first time mezzanine fund at $1 billion in 2009. Prior to KKR, he was a Managing Director at Blackstone/GSO Capital Partners responsible for senior and mezzanine investments. Mr. Stern was also the Chief Transaction Officer at Technology Investment Management Corp., a business development company.  Mr. Stern has previously held Managing Director positions at Nomura Merchant Banking, Kidder, Peabody & Co., Inc. and Drexel Burnham Lambert.  Mr. Stern received a BA degree from Middlebury College and an MBA from the Wharton School of the University of Pennsylvania.

Monroe Capital is a specialty finance company providing senior and junior debt and equity co-investments to middle-market companies. The firm was founded in 2004 and maintains offices in Chicago, Atlanta, Boston, Charlotte, Dallas, Los Angeles, New York and San Francisco (www.monroecap.com).

© 2014 PEPD • Private Equity’s Leading News Magazine • 5-6-14