Archives for June 2014

American Securities Closes Third Fund at $1Billion Hard Cap

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American Securities has held a final closing of its third distressed private equity investment partnership, American Securities Opportunities Fund III, L.P.(ASOF III), with total capital commitments from external investors of $1 billion.  The partnership was oversubscribed and hit its hard capitalization, ending with nearly 40 percent more capital than its $753.4 million predecessor, American Securities Opportunities Fund II L.P.

In announcing the closing of ASOF III, American Securities Opportunities Fund’s Chief Investment Officer, Lawrence First, said, “We are pleased to have raised a new pool of capital that will allow us to continue to apply our value-based investment approach in a disciplined manner to generate attractive risk-adjusted returns from debt instruments of middle market companies.”

American Securities Opportunities Fund invests in securities of companies that may be stressed or undergoing operational, financial, or other challenges, and in securities trading at a discount to intrinsic value.  The firm has the ability to invest across the entire capital structure, make loans to – and equity or equity-like investments in – stressed companies, fund recapitalizations, provide debtor-in-possession loans and exit financings, and invest in securities in order to fund both in-court and out-of-court restructuring plans.  American Securities Opportunities Fund can participate in both control and non-control investments.

In 2006, American Securities LLC created a dedicated team to invest in primarily debt instruments of stressed businesses under the American Securities Opportunities Fund brand because it believed that there would be opportunities to generate attractive risk-adjusted returns through investments in these types of situations.  American Securities Opportunities Fund is an affiliate of American Securities LLC, and is led by a separate investment team with over 95 years of collective investing, restructuring, and bankruptcy experience.

Michael Fisch, President and Chief Executive Officer of American Securities LLC, said “Larry First, Tony Grillo, and the other members of the American Securities Opportunities Fund team have been strong generators of attractive returns historically and we are enthusiastic about their ability to continue this success on behalf of investors in American Securities Opportunities Fund III, L.P.  We are delighted that the team will be able to continue investing on behalf of many long-standing investors and select new relationships.”

American Securities Opportunities Fund makes risk-adjusted investments in securities of companies that are distressed or undergoing operational, financial, or other stress and securities trading at a discount to intrinsic value.  American Securities Opportunities Fund’s strategy includes making control, as well as non-control, investments.  American Securities Opportunities Fund has more than $2 billion under management.  The firm is affiliated and works in collaboration with American Securities LLC.  More information about American Securities Opportunities Fund can be found at www.asopportunitiesfund.com.

2014 PEPD • Private Equity’s Leading News Magazine • 6-30-14

Lincoln Advises Sun on Sale of Manoir Aerospace

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Lincoln International Represents Sun Capital Partners in its sale of Manoir Aerospace to Lisi Aerospacem. Lincoln International acted as the exclusive financial adviser to Sun Capital.

Manoir Aerospace is a supplier of highly complex, flight critical forged and precision machined aerostructure and aeroengine components for the aerospace sector. The company is positioned on a compelling mix of mid-life and next generation programs including the Leap, the next generation engine developed by Safran and GE. Manoir Aerospace reported FY2013 revenue of €164 million with staff of about 1,100 employees working in three sites in France, one in Belgium and one in Mexico (www.manoiraerospace.com).

“As part of the Lisi Group, Manoir Aerospace is well placed to continue its growth trajectory through the combination of complementary products and industrial know-how which both parties will cross-fertilize,” says Géraud Estrangin, Managing Director at Lincoln International.

Lincoln International specializes in merger and acquisition advisory services, debt advisory services, private capital raising and restructuring advice on mid-market transactions. Lincoln International also provides fairness opinions, valuations and pension advisory services on a wide range of transaction sizes. Lincoln International has 16 offices in the in the Americas, Asia and Europe and is headquartered in Chicago (www.lincolninternational.com).

“Lincoln International’s global reach and cross-border capabilities were instrumental in engineering the sale of Manoir Aerospace to a key strategic buyer that will be able to support the company’s future growth opportunities so effectively, said Razmig Arzoumanian who heads Lincoln International’s Aerospace & Defense Group in North America.

Lincoln International’s Global Aerospace & Defense specializes in aerospace & defense transactions in the mid-market. The group’s highly integrated, international team of M&A professionals has extensive experience advising the leading OEMs, Tier I or Tier II suppliers in the industry, as well as privately-held and private equity owned companies supplying components, systems and services.

2014 PEPD • Private Equity’s Leading News Magazine • 6-30-14

New Head of Global Retail and Consumer Sector at General Atlantic

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Andrew Crawford has joined General Atlantic as a managing director based in New York.  Mr. Crawford will lead General Atlantic’s global investment activity in the retail and consumer sector.

“We are pleased to welcome Andy to our global team and to lead our efforts in the retail and consumer sector,” said William Ford, CEO of General Atlantic. “Andy’s investing acumen, retail and consumer expertise and leadership qualities will be a significant addition to our team.”

Mr. Crawford joins GA from Advent International, where he has been a principal focused on retail and consumer investments. He led or co-led and served on the board of directors of a number of Advent investments including Bojangles, Charlotte Russe, and Five Below. He also worked with lululemon athletica and Shoes For Crews. Mr. Crawford joined Advent in 2003.  Mr. Crawford received a BS from Washington and Lee University and an MBA from Harvard Business School.

“I have long admired General Atlantic and its long-term, value-added approach to building great companies. GA’s global footprint and team of highly experienced professionals will be very attractive for retail and consumer companies looking to expand beyond their native borders into developed as well as emerging economies. I am thrilled to be joining GA’s dynamic team at this exciting time,” said Mr. Crawford.

General Atlantic is focused on providing capital and strategic support to growth companies. The firm was founded in 1980 and manages approximately $18 billion in capital. General Atlantic has more than 90 investment professionals based in New York, Greenwich, Palo Alto, São Paulo, London, Munich, Amsterdam, Beijing, Hong Kong, Mumbai and Singapore (www.generalatlantic.com).

© 2014 PEPD • Private Equity’s Leading News Magazine • 6-27-14

Kim Shrum Joins Teakwood as Managing Director of Business Development

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Teakwood Capital has added Kim Shrum to its team as the Managing Director of Business Development.  She will be responsible for developing, nurturing, and sourcing potential opportunities for investment.

Ms. Shrum will be based in Teakwood’s Austin office and will focus her time on finding tech-enabled, profitable businesses with $5 million to $25 million in revenues that are looking for growth capital or a buyout.

Prior to joining Teakwood Capital, Ms. Shrum spent the last 10 years of her career creating and implementing sales strategies for DLA Piper, the largest law firm in the world. As one of their leading business development executives, she developed and maintained an extensive network of entrepreneurs, investors, service providers and executives in the technology industry. Previously, she also spent three years at the Lance Armstrong Foundation, implementing their corporate sponsorships through events.

“Kim has an extraordinary record of achievement in everything she’s done. She has a unique background and set of skills that bring a fresh and entirely new dimension to Teakwood’s deal sourcing strategies. We are very fortunate to have her as part of our team,” said Shawn Kelly, a Managing Director at Teakwood Capital.

“Throughout my career, I’ve been fortunate to be in positions where I can help connect great people with great opportunities. Teakwood presents an even greater opportunity for me to incorporate financing strategies as part of my discussions,” said Ms. Shrum.

Ms. Shrum holds an undergraduate degree in Corporate Communications from the University of Texas at Austin.

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).

© 2014 PEPD • Private Equity’s Leading News Magazine • 6-27-14

Stellus Receives Approval for SBIC License

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Stellus Capital Investment Corporation has announced that its wholly-owned subsidiary, Stellus Capital SBIC, LP, has received approval for a license from the United States Small Business Administration to operate as a Small Business Investment Company.

The license will allow Stellus SBIC to obtain leverage by issuing SBA-guaranteed debentures, subject to the issuance of a capital commitment by the SBA and customary procedures.

“We are pleased to have obtained approval from the SBA for our initial SBIC license and we look forward to working closely with the SBA in the years ahead,” said Robert Ladd, Chief Executive Officer of the company. “This is a significant milestone for our company and will contribute meaningfully to our long term capital plans.”

Stellus Capital Investment Corporation (NYSE: SCM) investment activities are managed by its investment adviser, Stellus Capital. Stellus Capital invests in private middle-market companies with $5 million to $50 million of EBITDA through first lien, second lien, unitranche and mezzanine debt financing, and corresponding equity investments. The firm invests across a range of industries with specific interest in the energy, specialty finance, software, general industrial, defense, and business services sectors. Stellus Capital has offices in New York, Washington DC, and Houston (www.stelluscapital.com).

In May 2014, Stellus received its “green light” letter from the U.S. Small Business Administration which allowed the firm to continue its application process to obtain a license to form and operate a Small Business Investment Company subsidiary.

© 2014 PEPD • Private Equity’s Leading News Magazine • 6-27-14

RLMcCall Capital Partners Invests in Case Drilling

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RLMcCall Capital Partners has partnered with Dos Rios Partners to acquire Case Drilling & Pump Service, a provider of fresh water well drilling and maintenance services.

Case Drilling & Pump Service is a provider of fresh water well drilling and maintenance services to contract drilling firms, E&P operators, agri-businesses, residential consumers and municipalities across West Texas. Historically, the company’s service area extended within a 150-mile radius of Stanton, TX and covered Martin, Midland, Howard and Glasscock counties. However, in the last six months, the company has begun to expand its operations into Andrews County, which lies west of Martin County.  The company was founded in 1939 and is based in Stanton, TX (no website found).

“We are excited to be partnering with Case Drilling and Dos Rios,” said Eric Blue, Partner of RLMcCall, “and we look forward to working with Case’s talented and experienced management team to advance the company’s successful strategy.”

RLMcCall Capital Partners invests in both lower middle-market change-of-control transactions and in non-control, growth investments in the oil & gas, general industrials and media & telecommunications sectors. RLMcCall sponsors or co-sponsors transactions involving businesses with enterprise values from $10 million to $50 million with EBITDA of $500,000 to $15 million. The firm is based in New Orleans (www.rlmcall.com).

“We are particularly excited about the expansion of our oil and gas services acquisition platform in the Permian Basin as we believe the Permian has many more years of exploration-, drilling- and logistics-linked growth to come,” said Earl Robinson, an RLMcCall Partner.

RLMcCall is committed to sourcing and executing non-traditional, supply chain-focused transactions that grow the industrial services opportunity set and the skilled labor pool in certain regions of the United States. “Our focus is to partner with management teams to fuel the expansion of niche-focused, lower middle market companies, the growth engine of the US economy,” said RLMcCall Partner Neill Wright.

This transaction underscores not only our commitment to investing in the oil and gas sector, but also our focus on high growth opportunities and regions such as the Permian,” said Hank Torbert, an RLMcCall Partner.

Dos Rios is private equity partnership formed by four Partners: Bo Baskin, Wayne Patterson, Jay Turner and Kevin Benoit. Dos Rios invests from $5 million to $15 million in the junior securities of proven, growing niche businesses with approximately $2 million to $8 million in EBITDA.  Dos Rios can help these small businesses with either control or non-control transactions. The firm is based in Austin with additional offices in San Antonio, Dallas and Houston (www.dosriospartners.com).

© 2014 PEPD • Private Equity’s Leading News Magazine • 6-27-14

Alcoa’s To Acquire Firth Rixson from Oak Hill

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Alco, a leader in aerospace jet engine components, will purchase Firth Rixson from Oak Hill Capital Partners, for $2.85 billion in cash and stock and an additional $150 million potential earn-out.  The buy of Firth Rixson increases Alcoa’s 2013 pro forma aerospace revenue by 20 percent to $4.8 billion and expands product suite in growing jet engine segment and is expected to contribute incremental $1.6 billion revenues and $350 million EBITDA in 2016.

“The acquisition of Firth Rixson is a major milestone in Alcoa’s transformation,” said Klaus Kleinfeld, Alcoa Chairman and Chief Executive Officer. “This transaction will bring together some of the greatest innovators in jet engine component technology; it will significantly expand our market leadership and growth potential. Firth Rixson increases the earnings power and broadens the market reach of our high-value aerospace portfolio and will deliver compelling and sustainable value for customers and shareholders.”

Firth Rixson provides rings, forgings and metal products to the aerospace sector and other industries requiring highly engineered material applications. It is the world’s largest supplier of seamless rings for aero-engines and leads the way in conventionally and isothermally forged engine disc technology. The company’s integrated extrusion and closed die forging operation serves the jet engine, landing gear system, mining and oilfield component markets, and its specialized cast and wrought superalloy material operation supplies a multitude of high technology markets.  Approximately 75 percent of Firth Rixson’s revenues in 2013 were from the aerospace industry, with the balance split between other markets such as industrial gas turbine, commercial transportation and oil and gas, complementing Alcoa’s growth markets.  The company has 13 operating facilities in the US, UK, Europe and Asia.  Firth Rixson is based in Sheffield, UK (firthrixson.com).

The acquisition strengthens Alcoa’s robust aerospace business. It positions the company to capture additional aerospace growth with a broader range of high-growth, value-add jet engine components. The acquisition is strategically aligned with the company’s objective to continue to build its value-add businesses.

“We at Oak Hill Capital have worked closely with the Firth Rixson team, led by CEO David Mortimer, to create long-term strategic value,” said Denis Nayden, Managing Partner of Oak Hill Capital. “By investing in new capabilities and technology in partnership with the leading aerospace engine customers, we strengthened Firth Rixson’s global leadership and built a business with strong growth, a large backlog of booked business and significant further potential. We are excited about the equity we are receiving in Alcoa and confident that the combination of Alcoa and Firth Rixson will achieve great success as a strategic supplier to the world’s best aerospace companies.”

Oak Hill Capital Partners has $8 billion of committed capital and invests in the following 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 and its predecessors have invested in more than 70 private equity transactions. The firm is located in Stamford, CT (www.oakhillcapital.com).

Alcoa is a leader in lightweight metals engineering and manufacturing.  The company’s products are used in automotive and commercial transport to air and space travel, and improve industrial and consumer electronics products. Products are made of titanium, nickel and aluminum, and best-in-class bauxite, alumina and primary aluminum products.  The company was founded over 125 years ago, and today, employs 60,000 people in 30 countries. The company is based in New York (www.alcoa.com).

The transaction, which has been approved by the Boards of Directors of both companies, remains subject to customary conditions and receipt of regulatory approvals. Alcoa expects to obtain all required regulatory clearances and close the transaction by the end of 2014.

The acquisition will be supported by a fully committed bridge facility from Morgan Stanley. Alcoa will subsequently issue a combination of debt and equity-content securities and remains committed to maintaining its investment grade rating.

Greenhill and Morgan Stanley acted as financial advisors to Alcoa and Wachtell, Lipton, Rosen & Katz acted as legal advisor. Citigroup and Lazard acted as financial advisors to Firth Rixson and Paul, Weiss, Rifkind, Wharton & Garrison acted as legal advisor.

© 2024 PEPD • Private Equity’s Leading News Magazine • 6-26-14

Silver Oak Recaps Construction Labor Contractors

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Silver Oak has recapped Construction Labor Contractors, a provider of temporary staffing of skilled tradesmen for the commercial construction market.

The company has 15 sales offices throughout the Midwest, Mid-Atlantic and Southwest that service clients in all 50 states.  CLC provides a variety of skilled trades to construction sites, including electricians, plumbers, carpenters and HVAC technicians. The company was founded in 1997 and is based in south of Cleveland in Richfield, OH (www.constructionlabor.com).

 “This transaction enables CLC to focus on the next phase of the company’s development with a value-added partner and the capital resources necessary to grow our company through organic investments in new offices and improved sales, marketing and recruiting execution” said CLC president George Cook, who will continue to lead the Company as CEO.

“We are excited to partner with the founder of CLC, Timothy Cherotti, and with the current CEO, George Cook, as well as the rest of the CLC management team.  The company has a successful track record of growth and a strong reputation among construction contractors across the country.  We look forward to leveraging the company’s existing strengths, while further investing in both new and existing markets,” said Greg Barr, Managing Partner of Silver Oak.

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

CLC is actively looking for add-on acquisition opportunities. Please contact Greg Barr or David Friedman of Silver Oak for additional information.

© 2024 PEPD • Private Equity’s Leading News Magazine • 6-26-14

LaSalle Capital Acquires Avtex from Marquette

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LaSalle Capital and Marquette Companies today announced that LaSalle Capital has purchased Avtex Solutions from Marquette Companies, a part of the Pohlad Companies. The acquisition closed yesterday, June 24. Avtex was acquired by Marquette Companies in 2006.

“The sale of Avtex is a logical outcome of our strategic focus on financial services, commercial real estate, automotive sales, and sports and entertainment,” said Bert Colianni, CEO of Marquette Companies. Avtex has been a good performer with a great team, and we believe the transaction will benefit Avtex in its growth goals. We wish them the best in the future,”

Avtex provides professional communications services and strategic consulting services. Services include design, application development, unified communications, contact centers, portals, business intelligence, and customer relationship management.  Avtex is a Microsoft Gold Certified and Managed Partner and a platinum-elite reseller of Interactive Intelligence communications software. The company serves more than 500 customers in the U.S., and has more than 160 employees in 17 states.  Avtex is based in Minneapolis (www.avtex.com).

“George Demou and his team have built a reputation for delivering exceptional customer experiences and customized, technology-enabled solutions,” said Nick Christopher, partner at LaSalle Capital.  They are a quality organization and are nationally recognized as a leading provider of Microsoft and Interactive Intelligence solutions. We are impressed by the Avtex business model, their strategic plan and the experienced team of seasoned professionals within the organization.”

LaSalle Capital Group operated as a fund-less sponsor from 1984-2004, making over thirty equity investments. In 2004 the firm raised its first fund with $125 million in capital commitments. LaSalle is currently managing two committed funds totaling over $330 million in capital raised from financial institutions and high net worth individuals. The firm is currently investing its second fund which will seeks to make control investments in companies with revenues of $10 million to $100 million that have EBITDAs of at least $2 million. Typical enterprise valuations will be from $5 million to $50 million. Sectors of interest include food & beverage, outsourced business services and value-added distribution/manufacturing.  LaSalle Capital Group is based in Chicago, IL (www.lasallecapitalgroup.com).

LaSalle Capital was advised by Sidley Austin. Advisors to Marquette Companies were Cherry Tree & Associates and Briggs and Morgan.

Marquette Companies is part of the Pohlad Companies, a group of more than 25 companies owned by the Pohlad family. Founded by Carl Pohlad in the 1950s and now managed by his three sons Jim, Bob and Bill, the Pohlad Companies operate in financial services/banking; commercial real estate; automotive sales; sports and entertainment, including the Minnesota Twins, a Major League Baseball franchise; and investments in privately held companies. The company is based in Minneapolis (http://www.marquettecompanies.com).

© 2024 PEPD • Private Equity’s Leading News Magazine • 6-26-14

Investment Banking Community Divided on IPO Forecast for Second Half of 2014

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According to a new study by BDO USA capital markets executives at leading investment banks are closely divided when asked to forecast the market for initial public offerings in the US during the remainder of 2014.

More than one-third (38%) anticipate the pace of US IPO activity will increase further in the second half of 2014, while a similar proportion (35%) believe activity will be flat with the first half of the year. Just over a quarter (27%) of the bankers are predicting a decrease in deals. Overall, capital market executives are predicting a one percent increase in the number of US IPOs during the second half of the year.

“The US IPO market has had a very strong first half to the year, with both the number of offerings and total proceeds up significantly from a strong 2013 performance,” said Wendy Hambleton, a Partner in the Capital Markets Practice at BDO USA. “Although there is no definitive forecast for further growth, based on our survey, a majority (73%) of those in the capital markets community believe the US IPO market will at least maintain the current pace of offerings during the second half of 2014. This alone would make 2014 the best year for IPOs – both in offerings and proceeds – since 2000.”

When asked to identify the main impetus behind the increase in U.S. IPO activity during the first half of 2014, the investment bankers were evenly divided among four key drivers – private equity (PE) and venture capital (VC) firms needing to cash in profits (27%), positive IPO performance encouraging more businesses to move forward with offerings (26%), low interest rates increasing investor demand for higher yielding assets (24%) and increased confidence in the U.S. economy (23%).

IPO Threats
In reflecting upon the greatest threat to a healthy US IPO market during the remainder of 2014, almost one-third (31%) of the I-bankers cite the Federal Reserve paring back monetary stimulus, while more than one-quarter (27%) identify global political and financial instability. Other threats cited were the high number of IPOs leading to a decline in performance (22%), the threat of tax increases (15%), and high unemployment levels (3%).

Industry Forecast
For six of the past eight years the technology industry has led all sectors in bringing offerings to market. During that time, many would argue that the health of the IPO market was tightly linked to the offerings coming from the technology sector. However, in 2013 and thus far in 2014, the healthcare sector has led all industries in the number of US IPOs.

Moving forward, investment bankers predict more healthcare offerings (62%) during the second half of the year and an even greater proportion forecast an increase in IPOs from the technology (71%) and energy (66%) sectors. Biotech (54%) is the only other vertical where a majority anticipate an increase in deals during the remainder of the year (see full chart below).

These are just a few of the findings of The 2014 BDO IPO Halftime Report survey which examines the opinions of 100 capital markets executives at leading investment banks regarding the market for initial public offerings in the United States during the second half of the year. The survey was conducted in June of 2014.

Other major findings of The 2014 BDO IPO Halftime Report:

  • Global IPO Market Share. Through the first six months of 2014, US exchanges have led all countries in proceeds from initial public offerings. When asked to identify the main reason for the US leadership position in global IPO proceeds, large proportions of the bankers emphasized US exchanges benefitting from private equity and VC backed offerings (43%), the improving U.S. macro-economy (25%) and increased investor cash flowing into stock-focused mutual funds (23%). Sluggish IPO activity in China (6%) was cited by a small minority.
  • Only one-third (34%) of investment bankers anticipate US exchanges increasing their current share of the global IPO pie during the second half of the year. Approximately half (49%) predict the US will maintain its current share of global proceeds during the remainder of the year, while 16 percent believe the U.S. share will decline in the second half of 2014.
  • The Source of IPOs? When asked what will be the greatest source of IPOs in the second half of the year, most capital market executives cite either private equity (44%) or venture capital (26%) portfolios. Owner-managed, privately-held businesses (20%) and spinoffs and divestitures (10%) are the other sources identified by the bankers.
  • Smaller Deals. Although US IPO activity is up significantly in 2014, the size of the average IPO on U.S. exchanges has actually decreased from 2013. Many of the bankers attribute the smaller deal sizes to the absence of a mega-deal, such as Facebook or Visa, to lift the average (43%), valuation pressures forcing offering businesses to cut prices (25%) and optimism about the economy making smaller deals more attractive (19%). Smaller numbers of bankers attribute the decreased size to the JOBS Act encouraging smaller businesses to go public (9%). Moving forward, the capital markets executives believe the size of the average IPO in the second half of the year will be $243 million.

The BDO IPO Halftime Report is a national telephone survey conducted by Market Measurement, Inc., an independent market research consulting firm, on behalf of BDO USA. Executive interviewers spoke directly to capital markets executives, using a telephone survey conducted within a scientifically-developed, pure random sample of the nation’s leading investment banks.

© 2024 PEPD • Private Equity’s Leading News Magazine • 6-26-14

Investment Professional, Alex Hurst, Joins Atlantic-Pacific Capital

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Atlantic-Pacific Capital has added Alex Hurst to it teams of investment bankers. Mr. Hurst joins the firm’s London office as a Vice President to focus on project management, deal execution and client servicing.

“We are pleased to welcome Alex to the Atlantic-Pacific team. His wealth of experience in evaluating and investing in private equity and real estate managers will provide significant value to our clients, said Richard Awbery, Partner at Atlantic-Pacific.

Prior to joining Atlantic-Pacific, Mr. Hurst worked as a senior professional on the investment team at Partners Group in London and Switzerland. During that time, he focused on underwriting investments and deploying capital into private equity funds and direct transactions within the European real estate market. Before Partners Group, Mr. Hurst worked at Lord North Street Limited, a private investment office, where he predominantly focused on evaluating and executing private equity and real estate investments. Mr. Hurst began his career in the financial services sector in the listed markets with a graduate position sponsored by the Vodafone Group Foundation.

Founded in 1995, Atlantic-Pacific Capital has raised over $60 billion for alternative asset managers seeking private capital. Typical projects include private equity, real estate, and infrastructure fund placements, as well as private placement financings in support of acquisitions, buyouts, and growth capital transactions. The firm has relationship managers and advisors in New York, Greenwich, Chicago, San Francisco, London, and Hong Kong (www.apcap.com).

© 2024 PEPD • Private Equity’s Leading News Magazine • 6-26-14

Balance Point Invests in HALO Innovations

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Balance Point Capital Partners has made an investment in HALO Innovations.  Balance Point Capital Partners provided $5 million of senior subordinated notes and $2 million of redeemable preferred stock in connection with HALO Innovations’ recapitalization of its balance sheet.

HALO Innovations designs, markets, distributes and sells products used in promoting the health, safety and well-being of infants.  Products include  SleepSack® line of wearable blankets and swaddles, used by millions of parents and over 1,400 hospital nurseries nationwide, ComfortLuxe® Sleepwear for babies with sensitive skin, Healthy Hips® diaper cover promoting healthy hip positioning and award-winning Bassinest™ Swivel Sleeper. The company was founded in 1994 and is headquartered in the Minneapolis suburb of Minnetonka (www.halosleep.com).

“Balance Point is very proud to partner with HALO Innovations,” said Rob Gibson, a Senior Vice President at Balance Point.  “We welcome the opportunity to work with a leader in infant health and safety products and look forward assisting HALO in advancing its core mission of helping babies sleep safely.”

Balance Point Capital Partners invests from $5 million to $20 million of mezzanine and equity in lower middle market companies that have revenues of $10 million to $150 million and EBITDAs between $2 million and $25 million. Sectors of interest include business services, niche manufacturing, consumer & industrial, branded products, aerospace & defense, healthcare, and technology. Balance Point Capital Partners was founded in 1988 and is based in Westport, CT (www.balancepointcapital.com).

“We are excited to enter the next stage of growth for HALO,” said Chuck Dorsey, President and Chief Executive Officer of HALO Innovations.  “At HALO, we are committed to the vision of every baby sleeping safely every night, and this financing helps us continue our mission and develop new, innovative safe sleep and health and wellness products.”

© 2024 PEPD • Private Equity’s Leading News Magazine • 6-25-14

Breakwater Exits Yourbuds

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Yurbuds, a portfolio company of Breakwater Investment Management has been acquired by Harman International Industries (NYSE:HAR), a global infotainment and audio group.

“This is a very exciting juncture for this globally recognized premium brand within the sport tech market,” said Saif Mansour, Founding Partner at Breakwater. “The acquisition of the business by Harman now promises to accelerate the growth of the Yurbuds brand further, with new opportunities to leverage technologies and distribution systems to drive global business expansion.”

Yurbuds is the #1 selling sport earphone company in the United States. The firm develops in-the-ear and behind-the-ear headphones that are ergonomically and functionally designed specifically for athletes. Yurbuds headphones are available in 19,000 points of sale, including big box general merchandise retailers, sporting goods retailers, and more than 750 active lifestyle specialty retailers. The company was founded in 2008 and is based in St. Louis (www.yurbuds.com).

“When it comes to providing a premium audio experience, there’s no better name in the industry than Harman, and we are incredibly excited to join forces to enhance the Yurbuds product line, expand our scale, and grow the brand around the world,” said Seth Burgett, CEO and President at Yurbuds.

Following the acquisition, Burgett and the Yurbuds team will join the Harman Lifestyle Division. Harman International Industries reported 2013 revenue of $4.3 billion.

Breakwater Investment Management specializes in direct investments in small to lower middle market growth businesses with annual sales ranging from $5 million to $100 million. The firm serves as general partner of Breakwater Structured Growth Opportunities Fund, LP, a $100 million open-ended private investment partnership organized in August 2008. The fund’s investment objective is to generate both current income and capital appreciation through secured debt investments accompanied with equity participation rights, primarily in growth-oriented companies across a variety of industries. The firm is based in Los Angeles (www.breakwaterfund.com).

© 2024 PEPD • Private Equity’s Leading News Magazine • 6-25-14

Vitruvian Partners Acquires JacTravel

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JacTravel Group, a technology driven, B2B hotel accommodation wholesaler and provider of inbound travel services, has announced that Vitruvian Partners has acquired the business from Bowmark Capital. The transaction is worth approximately £80 million.

JacTravel is a UK-based participant in the high growth wholesale accommodation sector, where it partners with over 12,500 independent and chain hotels in 800 cities globally and processes nearly 1 million bookings per year. JacTravel operates from 10 offices worldwide and employs 220 staff providing services to over 1,000 active customers.  The company is based in London with offices in Munich and Stockholm (www.jactravel.co.uk).

Since Bowmark acquired the business in August 2007, JacTravel has significantly expanded its global coverage, establishing extensive customer and supplier relationships in the emerging travel markets of Latin America, Asia and the Middle East.  Under Bowmark’s ownership, sales and profits have grown at a compound annual growth rate of 16 per cent and 22 per cent respectively.

“With Bowmark’s support, JacTravel has achieved fantastic growth over the last seven years. Having established the company as a global player, we are now excited to be partnering with Vitruvian to continue the International expansion program, where further investment will enable us to deliver a number of our key strategic goals in providing market leading technology driven solutions for our international hotel partners and our global customer base,” said Terry Williamson, chief executive of JacTravel.

“Over the past seven years, JacTravel has very successfully capitalized on consumers’ increasing preference for purchasing travel services online. We have worked closely with the management team to develop a strong market position from which to continue the company’s impressive growth,” said David Torbet, Bowmark Partner.

Vitruvian Partners is a European private equity firm focusing on leveraged buyout and growth capital investments in middle-market companies. Vitruvian invests throughout the UK, Ireland, Germany, Austria, Switzerland, the Nordic region and Benelux. The firm is based in London (www.vitruvianpartners.com).

“Vitruvian invests in fast growing businesses led by outstanding entrepreneurs. Terry and his team have achieved excellent growth at JacTravel and we are excited about working with them going forward. There is a significant opportunity for the business to continue to grow internationally and serve the large and growing global travel marke7t which has a clear need for the technology and services that JacTravel provides,” said Ben Johnson, a Partner at Vitruvian.

Bowmark were advised by PWC, Deloitte and King Wood Mallesons.  Vitruvian were advised by Duff & Phelps, BDO, Shearman & Sterling, OC&C and Instinctif Partners.  The management was advised by Livingstone Partners, Pinsents and 42 Consulting.

© 2024 PEPD • Private Equity’s Leading News Magazine • 6-25-14

PE Bullish due to International Ops and Fundraising Prospects

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Amid heightened competition and regulatory uncertainty, the private equity industry is exhibiting growing confidence and appetite for investment. A study jointly released today by global valuation and corporation finance advisor, Duff & Phelps, and international law firm, Shearman & Sterling, underscores these conclusions and related key findings in its inaugural Global Private Equity Outlook report published in association with Mergermarket.

Respondents overall are bullish about an increase in private equity activity over the next 12 months, with 87% of respondents expressing confidence in a near-term increase in buyout activity and 72% expecting fundraising prospects to improve in the next year. Specific areas of anticipated strength include cross-border investments (industry-wide), consumer and the integrated telecommunications, media and technology (TMT) sectors. Specific highlights from the study include the following:

  • The value of year-to-date exits at $227bn is fast approaching 2013’s total of $282bn.
  • Survey respondents expect the consumer and integrated TMT sectors to have the best opportunities for private equity. Interest in the integrated sector is driven by technology investments, which comprise 75% of year-to-date TMT buyouts. There were 149 TMT buyouts worth approximately $28bn so far this year.
  • On average, cross-border transactions will make up 30% of respondents’ acquisitions over the next 12 months. The notable proportion of cross-border investments by PE firms can be attributed to attractive investment opportunities across the globe. Survey respondents report that 66% of North American, 40% of European and 33% of Asia-Pacific will access foreign markets for financing.

More than a quarter of respondents (28%) think that regulatory and compliance risks are the top challenges faced by private equity firms. “Across geographies and industry sectors, private equity professionals express optimism,” said Bob Bartell, Global Head of Corporate Finance at Duff & Phelps. “Competition is growing, but the industry is confident that strong investment pipelines, financing accessibility, and exit options will all contribute to a vibrant industry in the year ahead and beyond.”

Despite the general optimism, respondents cite challenges related to regulatory hurdles, compliance risk and increasing competition for assets. Jeremy Dickens, Global Co-Head – Private Equity Practice, at Shearman & Sterling explains, “The classical private equity fund is facing stiff competition from a new breed of investors, including sovereign wealth funds, state-owned enterprises, pension plans, specialist funds and large family offices. This has led to fundamental changes in the private equity marketplace.”

The report also reviews the strategies that private equity firms employ to retain competitive advantages and maximize the desired yield from their investments, including a renewed focus on operational improvements. It also considers the impact of the industry’s current regulatory environment on the industry, which, while traditionally lightly regulated, faces increased oversight. Finally, the survey results address the various drivers of buyouts and exits in the current market and explore regional and industry-specific trends.

Click here to view the full report.

© 2024 PEPD • Private Equity’s Leading News Magazine • 6-25-14

Matthew Blodgett Joins Vector Capital as Managing Director

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Vector Capital has hired Matthew Blodgett as a new Managing Director. Mr. Blodgett joins Vector having spent almost 14 years working with technology companies, including more than a decade as a technology investor. He was most recently a Partner at North Bridge Growth Equity, and prior to that worked at Alta Communications and Bear Stearns & Co.

“We are delighted to welcome Matt to Vector,” said Alex Slusky, Vector’s Chief Investment Officer. “Matt has been a highly successful growth investor across many technology subsectors and across a variety of geographies. He brings an active, collaborative, and insightful approach to partnering with entrepreneurial companies. Matt will build and expand on Vector’s 17 year history of backing growing technology businesses.”

Over his career, Mr. Blodgett has worked closely with founders and entrepreneurs building rapidly growing companies in the software, digital media, communications and technology-enabled services sectors. He will be responsible for building collaborative investment partnerships with entrepreneurs leading breakthrough technology and technology-enabled growth companies. Mr. Blodgett received a BA in Economics and a BA in Political Science from Yale University.

“I am very excited to join Vector Capital,” said Mr. Blodgett. “I believe Vector is uniquely positioned as a platform to provide unparalleled support to entrepreneurs leading growth technology companies. I look forward to introducing Vector’s unique capabilities to entrepreneurs.”

Vector Capital invests in spinouts, buyouts and recapitalizations of private or public technology businesses. The firm is based in San Francisco (www.vectorcapital.com).

© 2024 PEPD • Private Equity’s Leading News Magazine • 6-25-14

Riverside Exits Thibaut

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The Riverside Company has sold its stake in Thibaut, a designer and distributor of high-end wallpaper, fabric and furniture.

Thibaut designs upscale wallpaper and fabric, distributing its products through channels such as interior designers, designer showrooms and retail decorating centers. The company uses exclusive artwork created by its in-house design team.  Thibaut was founded in 1886 and is the nation’s oldest continuously operating wallpaper firm.  The company is based in Newark, NJ (www.thibautdesign.com)

Riverside invested in Thibaut in 2006 and supported the company through the Global Financial Crisis and resulting severe downturn in remodeling, and ultimately helped the company increase employment by almost 50%, and grow revenues by more than 50% while more than doubling EBITDA during the hold period.

“Thibaut offered a large catalog of beautiful, premium products and a well-known and respected brand among interior designers,” said Riverside Managing Partner Loren Schlachet. “While we faced unexpected macroeconomic challenges, we worked with a great management team to create a bigger and better company with a broader product offering in the end.”

In addition to supporting the company through a time when many suppliers and competitors struggled or even went out of business, Riverside completed the add-on of London-based Anna French, which diversified core products, and helped Thibaut launch a new product line in Thibaut Fine Furniture, which is growing rapidly and fits Thibaut’s model of designer-driven sales.

“This sale is the culmination of a very successful eight-year partnership with Thibaut CEO Bob Senior and his talented management team,” said Riverside Partner Jack Nestor. “Thibaut is well-positioned for continued growth in the future as one of the most innovative and well-respected designers in the high-end wallpaper and fabric industry.”

Working on the transaction with Mr. Schlachet and Mr. Nestor from Riverside were Global Executive Operating Partner Ron Sansom, Principal Joe Manning, Associate Elaine Ho, and Origination Principal Amy Margolis.

BB&T Capital Markets served as the investment bank and Jones Day and Deloitte advised Riverside on the transaction.

The Riverside Company is focused on the smaller end of the middle market and invests in businesses valued at up to $250 million (€200 million in Europe). Since 1988, the firm has invested in more than 340 transactions with a total enterprise value of more than $6 billion. The firm’s international portfolio includes more than 70 companies.  The Riverside Company is headquartered in New York with additional offices in Atlanta, Chicago, Cleveland, Dallas, Los Angeles, San Francisco, and London (www.riversidecompany.com).

2014 PEPD • Private Equity’s Leading News Magazine • 6-24-14

Industrial Opportunities Partners Acquires WEK Industries

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Toledo Molding & Die, a portfolio company of Industrial Opportunities Partners acquired in November 2011, has acquired blow molder WEK Industries.

WEK Industries is a provider of engineered blow molded components and assemblies to the automotive industry. WEK was a part of Myers Industries’ Engineered Products Segment. WEK has locations in Jefferson, OH (headquarters) and Reidsville, NC (www.wekindustries.com).

Toledo Molding & Die is an automotive supplier that designs, develops and manufactures highly engineered molded thermoplastic components and assemblies such as interior cockpit modules and air and fluid management products. The company also designs and builds molds and related tools for its injection and blow molded components. TMD has approximately 1,000 employees and operates out of six facilities in Ohio. The company is headquartered in Toledo (www.tmdinc.com).

“We are excited to support our platform investment in TMD with the strategic acquisition of WEK. We believe TMD is positioned for growth both internally and through strategic acquisitions such as WEK. WEK represents TMD’s first acquisition since IOP invested in TMD in 2011,” said Adam Gottlieb, Senior Managing Director of IOP.

IOP focuses on acquiring middle-market manufacturing and value-added distribution businesses, typically with revenues between $30 million and $350 million. IOP targets businesses with strong product, customer, and market positions and provides management and operational resources to support sales growth and operational improvements. The firm has $460 million of committed capital and was founded in 2005. IOP is headquartered in the Chicago suburb of Evanston (www.iopfund.com).

Western Reserve Partners (www.wesrespartners.com) served as the exclusive financial advisor to Myers Industries on the sale of WEK Industries.  The transaction team for Western Reserve Partners included Managing Director Kevin Mayer and Director Matt Mueller of the firm’s Industrial Group, supported by Analyst Kevin Harper. This represents the second automotive industry divestiture Western Reserve has advised on this quarter. Western Reserve also advised Stoneridge (NYSE: SRI) in the divestiture of its Wiring Business segment, which was announced in May.

“This was a highly competitive process with several parties showing strong interest in the business. In the end, TMD was the best partner for the business, and the transaction allows Myers to continue to focus on its core businesses,” said Mr. Mayer.

2014 PEPD • Private Equity’s Leading News Magazine • 6-24-14