Archives for June 2014

Genstar Capital Completes Sale of ConvergeOne

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Genstar Capital has completed the previously announced sale of its portfolio company ConvergeOne,  an independent provider of communications solutions and managed services to enterprises globally, to Clearlake Capital.  Genstar first invested in ConvergeOne in May 2007.

ConvergeOne is one of the largest providers of business communications and data services in the United States. Services include converged networks and unified communication solutions, call centers, system design, implementation, integration, maintenance, data storage and archiving and other professional services primarily for mid-sized and enterprise businesses.  ConvergeOne has over 4,100 customers, including 46% of the Fortune 100 companies, operating in virtually every industry, including the financial, technology & communications, healthcare, and energy sectors.  The company is headquartered near Minneapolis in Eagan, MN (www.converge-one.com).

Genstar Capital invests from $50 million to $400 million in middle-market companies that have enterprise values from $50 million to $1 billion and EBITDAs greater than $15 million. Sectors of interest include financial services, software, healthcare, and industrial technology industries.  The firm was founded in 1988 and is based in San Francisco (www.gencap.com).

“We are pleased to have built this strong platform and positioned it for continued growth.  We continue to evaluate a robust pipeline of investments in the software sector and look forward to applying our expertise in new opportunities to transform businesses into industry leaders,” said Mark Hanson, Genstar Operating Partner.

Clearlake invests in special situations such as corporate divestitures, recapitalizations, buyouts, restructurings, turnarounds and minority equity investments. Sectors of interest include business services; communication; consumer products and retail; defense and public safety; energy and power; healthcare; industrials; media; and technology. Clearlake currently manages approximately $1.4 billion of equity capital. The firm was founded in 2006 and is headquartered in New York (www.clearlakecapital.com).

2014 PEPD • Private Equity’s Leading News Magazine • 6-19-14

GI Partners Completes Acquisition of Peak 10

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GI Partners and Peak 10, Inc., a provider of IT infrastructure and a portfolio company of Welsh, Carson, Anderson & Stowe since 2010, have completed the previously announced acquisition of Peak 10 by GI Partners.

Peak 10 provides IT infrastructure services including data center services, private and enterprise cloud infrastructure, and managed services.  The company operates 24 data centers in 10 markets in the US, primarily serving mid-sized enterprises around the globe.  Peak 10 is headquartered in Charlotte, NC (www.peak10.com).

GI Partners invests from $50 million to $250 million in companies with enterprise values of $100 million to $750 million.  Sectors of interest include IT infrastructure & services; healthcare services; leisure & retail; and financial & real estate services.  Since founding, GI has managed $10 billion across four private equity funds and invested in 38 platform investments. GI Partners is based in Menlo Park (www.gipartners.com).

“Peak 10’s talented and experienced management team has built an outstanding organization with considerable scale,” said David Mace, Director at GI Partners.  “We look forward to supporting the company as it continues to expand its leadership position.”

Welsh, Carson, Anderson & Stowe is focused exclusively on investments in business, information and healthcare services. Since its founding in 1979, Welsh Carson has organized 15 limited partnerships with total capital of over $20 billion. The firm is currently investing through its latest fund, Welsh, Carson, Anderson & Stowe XI, LP, and is based in New York (www.welshcarson.com).

“We are very proud of the partnership we have enjoyed with Peak 10’s management team since 2010.  During that time, we worked closely together to continue building on Peak 10’s leadership position in the market,” said Eric Lee, General Partner at Welsh, Carson, Anderson & Stowe.  “The company delivered terrific performance and we believe is well-positioned for its next phase of growth.”

Credit Suisse and RBC Capital Markets acted as financial advisors, and Kirkland & Ellis served as legal counsel for Peak 10.  Paul Hastings served as legal counsel for GI Partners.  Financing for the transaction is being provided by affiliates of Credit Suisse, RBC Capital Markets, and Jefferies.

2014 PEPD • Private Equity’s Leading News Magazine • 6-19-14

Andrew Dempsey Joins Easterly Capital

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Andrew Dempsey has joined Easterly Capital as a new managing director. Mr. Dempsey was previously the chief operating officer of Fortress Investment Group’s Permanent Capital Business Group.  Mr. Dempsey will be responsible for capital formation and business development.

“Andrew Dempsey has built a reputation for helping to grow businesses while providing access to extraordinary opportunities for institutions and other investors,” said Chief Financial Officer Darrell Crate. “Andrew will be an excellent addition to our growing roster of accomplished private investment executives as we continue to identify and create products for clients that achieve specific risk-return objectives at a fair cost.”

Mr. Dempsey most recently was a managing director at Fortress Investment Group, where he served as chief operating officer of the Permanent Capital Business Group and as a member of the firm’s Management Committee. Prior to that, he was the global head of capital formation for the Liquid Markets business at Fortress.

Prior to joining Fortress in 2005, Mr. Dempsey was a regional director for Allegiance Capital with responsibility for marketing and distribution of fixed-income products for the southwest United States and Mexico. Earlier, he was a fixed-income specialist for the Enterprise Unit at SEI Investments. A native of Huntington Beach, CA, Mr. Dempsey received a BBA degree in Economics and Finance with a second major in Mathematics from the University of Notre Dame, where he was a member of the varsity football team.

“Easterly Capital is fielding an outstanding team of investment professionals as it develops new products for institutional investors, and I’m pleased to be a part of this effort,” said Mr. Dempsey.

Easterly Capital is a private asset management firm that develops both alternative and traditional investment vehicles to satisfy the specific risk return objectives of clients.  Easterly’s products are comprised of real estate, natural resources, and financial assets, including those in niche, non-bank finance markets. Through an affiliate, Washington, DC-based Easterly Partners, Easterly invests in a highly specialized segment of the US Government-leased real estate market.  As of March 31, 2014, Easterly Capital, through its affiliated entities, managed over $1 billion of assets, mostly in private equity and alternative vehicles for institutional and ultra high net worth investors. The firm was founded in 2009 and is based in Beverly, MA (www.easterlycapital.com).

2014 PEPD • Private Equity’s Leading News Magazine • 6-19-14

Blue Sage Capital Promotes Senior Associates

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Blue Sage Capital has promoted Jonathan Pearce and Eric Weiner to Vice President. In this role, Jonathan and Eric will be responsible for sourcing, evaluating, negotiating structuring, managing due diligence, and closing investment opportunities and subsequent portfolio company monitoring.

Mr. Pearce joined Blue Sage in May 2013 after spending four years with Avista Capital Partners, a generalist middle-market private equity firm with $5 billion under management. While at Avista, he focused on the evaluation and execution of investments primarily in the energy sector.  Mr. Pearce is a Certified Public Accountant and a graduate of The University of Texas at Austin, where he earned a Masters in Professional Accounting and a Bachelor of Business Administration with a Minor in Finance.

Mr. Weiner joined Blue Sage August 2013 after completing his MBA from the Stanford Graduate School of Business.  Prior to business school, he worked for Berkshire Partners, a middle-market private equity firm with over $11 billion under management, specializing in investments primarily in consumer, retail, business services and industrial companies. He graduated from The University of Texas with a BBA degree in Finance and a BA in Government.

Blue Sage Capital specializes in growth, recapitalization and buyout financings of smaller middle-market companies based in Texas and the Southwest. Most of Blue Sage’s investments are in established, profitable companies with $25 million to $100 million of revenue and $5 million to $10 million of cash flow. Blue Sage invests in a variety of industries, with each initial investment in a company ranging from $10 million to $15 million. The firm is based in Austin, TX (www.bluesage.com).

2014 PEPD • Private Equity’s Leading News Magazine • 6-19-14

Peak Rock Acquires RCR International

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Peak Rock Capital has acquired RCR International, a manufacturer and distributor of home improvement products sold in the US and Canada.

“Acquiring RCR exemplifies our demonstrated interest in investing in leading consumer product businesses that can benefit from our resources and strategic support in positioning the company for significant growth.  We are excited to add RCR to our growing portfolio of outstanding platform companies,” said Anthony DiSimone, CEO of Peak Rock Capital.

RCR is a leader in the Canadian home improvement market with a broad product offering and exceptional customer service.  RCR’s more than 2,000 products are used by consumers to maintain and enhance the comfort and energy-efficiency of their homes, and are primarily featured by retailers in the home improvement and do-it-yourself categories.  The company’s core product portfolio of door and window insulation, indoor/outdoor flooring and utility accessories, includes some of the most recognized and highest quality brands, such as Climaloc, the top selling Canadian brand of consumer weatherstripping, Comfort Plus, Dennis, Polar Grip and Topsi. The company was founded in 1946 and is headquartered in Boucherville, Québec (www.rcrint.com).

“RCR’s commitment to product quality, design and merchandising expertise, as well as its unmatched customer service, have enabled it to build strong and deep relationships with key decision makers throughout the home improvement industry.  We are excited to partner with RCR’s experienced management team to utilize these strengths in rapidly growing the Company through organic initiatives and potential strategic acquisitions,” said Steven Martinez, President of Peak Rock Capital.

Peak Rock Capital makes debt and equity investments of $20 million to $150 million in middle market companies with revenues from $50 million to $1 billion and enterprise values from $25 million to $500 million. Sectors of interest include business and commercial services; consumer; distribution and logistics; energy and related services; healthcare; industrials; manufacturing, metals, and media. The firm is based in Austin (www.peakrockcapital.com).

 2014 PEPD • Private Equity’s Leading News Magazine • 6-18-14

Genstar Capital Exits Evolution1

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Genstar Capital has announced the signing of an agreement to sell Evolution1, a provider of consumer directed health (CDH) payments and technology, to WEX (NYSE:WEX) for $532.5 million.  Genstar invested in Evolution1 in 2010. The transaction is expected to be completed in the third quarter.

“The successful investment in Evolution1 is another strong example of Genstar’s ability to transform businesses into innovative industry leaders,” said Jean-Pierre Conte, Chairman and Managing Director of Genstar Capital.  “Evolution1 is particularly exciting as we coordinated our sector specialization from multiple industry disciplines – healthcare, software, and financial services – to build and grow this tremendous company.  We are delighted to have worked with the Evolution1 management team, as this transaction marks an exciting moment and a successful exit for Genstar.”

Evolution1® simplifies the business of healthcare. The company provides healthcare software and payment solutions that administer and manage consumer directed accounts. The firm has a network of 500 partner organizations that enable the company to deliver its products to 80,000 employer groups and 9,500,000 consumers across the country. Evolution1 provides software, payment and mobile solutions that administer and manage consumer directed healthcare accounts. The company’s administrative software solutions, driven by patented technology, allow more than 10 million consumers to spend electronically through prepaid funds in CDH accounts such as Health Spending Accounts (HSAs), Flexible Spending Accounts (FSAs), Defined Contribution, and more.  Evolution1’s cloud-based solutions provide a single end-to-end intuitive user experience that reduces costs, saves time and ultimately simplifies the business of healthcare.  The company is based in Fargo, ND (www.evolution1.com).

“Evolution1 is an industry leader with a bright future.  During Genstar’s ownership, Evolution1 developed and expanded its solutions to achieve strong organic growth.  The company today serves more than 10 million consumers and more than 90,000 employer groups.  The platform is poised to continue building on this momentum, and we are pleased to have worked with this talented senior management team to dramatically grow this business.  It is gratifying that WEX sees the continued exciting growth prospects for Evolution1,” said Eli Weiss, a Principal at Genstar.

Genstar Capital invests from $50 million to $400 million in middle-market companies that have enterprise values from $50 million to $1 billion and EBITDAs greater than $15 million. Sectors of interest include financial services, software, healthcare, and industrial technology industries.  The firm was founded in 1988 and is based in San Francisco (www.gencap.com).

WEX represents more than 7.8 million cardholders and offers payment security and control across a wide spectrum of business sectors.  WEX has 0 offices in the US and abroad and employs more than 1,400 associates.  The company is headquartered in South Portland, ME (www.wexinc.com).

Deutsche Bank and William Blair & Company acted as financial advisors to Evolution1 and Weil, Gotshal & Manges acted as legal advisor.

2014 PEPD • Private Equity’s Leading News Magazine • 6-18-14

O2 Acquires DuAll Precision

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DuAll Precision, a niche manufacturer of hydraulic cartridge valve components, has been acquired by O2 Investment Partners. O2 partnered with the DuAll’s founders – Michael Butler and Stanley Boksa – to complete this transaction.

As part of its custom engineered valve and flow control strategy, O2 Investment Partners acquired DuAll Precision through O2 Specialty Mfg Holdings, which also owns its existing valve manufacturing business, Mercury Manufacturing Company, located in Wyandotte, MI.  The two businesses will continue to operate out of their existing facilities and will be led by Kent Niederhofer, CEO of O2 Specialty Mfg Holdings.

DuAll is a manufacturer of components for hydraulic cartridge valves, including check valves, solenoid valves, sequence valves, directional valves, counter balance valves and pressure control valves.  The company primarily provides components for hydraulic systems in the transportation, agriculture and heavy equipment markets. DuAll Precision was founded in 1990 and is based near Chicago in Addison, IL (www.duallusa.com).

Mercury Manufacturing Company is a manufacturer of pressure relief valves, check valves, precision machined components and assemblies serving the automotive, heavy duty truck, air conditioning and refrigeration markets.  The company was founded in 1964 and is based in Wyandotte, MI (www.mercurymfg.com).  O2 acquired Mercury in January 2013.

“Our partnership with O2 – an organization which shares our values and strategic vision – provides access to the resources necessary for DuAll to continue its growth trajectory with existing core products and customers while allowing for expansion into additional targeted niche markets, products and technologies, including opportunities with our  new sister company, Mercury Manufacturing,” said Mr. Butler.

“We are very pleased to be partnering with Michael Butler and Stanley Boksa to invest in DuAll and its employees.  We share a common vision for this business that is very complementary with Mercury Manufacturing,” said Jay Hansen, Managing Partner of O2 Investment Partners.  “We look forward to supporting Michael, Stanley, Kent and the DuAll team in achieving their plan.  DuAll has the right combination of a talented and experienced workforce, strong engineering and efficient manufacturing processes to grow within its existing markets. In addition, with the new relationship with Mercury, the additional growth opportunities for both businesses are truly exciting.”

O2 Investment Partners makes control investments in companies with EBITDAs from $2 million to $8 million located anywhere in the US and Canada but has a preference for the Midwest and the Great Lakes regions. The firm’s typical transaction size is $5 million to $50 million. Industries of interest include manufacturing, niche distribution, select service and technology businesses. O2 Investment Partners is based in Bloomfield Hills, MI (www.o2investment.com).

2014 PEPD • Private Equity’s Leading News Magazine • 6-18-14

KRG Capital Partners Acquires Restaurant Parts & More

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Diversified Foodservice Supply (DFSI), a portfolio company of KRG Capital Partners, has acquired foodservice parts, supplies, equipment(RPM). DFSI is a portfolio company of KRG Capital Partners Fund IV and was acquired in November of 2010. The acquisition of RPM represents the 200th investment for KRG since inception.

According to KRG, the addition of RPM to the DFSI portfolio adds scale to the organization and improves the customer offering for chain restaurants and their associated franchisees. RPM will continue to operate as a leading brand in the combined company and joins other DFSI brands such as AllPoints Foodservice Parts and Supplies, Franklin Machine Products, Tundra Restaurant Supply, and Mill Hardware. For more info on Restaurant Parts & More here is a link to their website (www.restaurantsuppliesandmore.com).

DFSI is the parent company of multiple brands focused on the distribution of foodservice parts, supplies, equipment, and accessories. The company services many markets including restaurant equipment and supplies dealers, service agencies, restaurants, and institutions. DFSI is headquartered in Mt. Prospect, IL and manages operations in five distribution facilities and brand headquarters located across the United States. The combination of its geographic footprint, coupled with an expansive item profile of over 100,000 SKUs, enables DFSI to expedite delivery of products quickly to its valued customers. More information on DFSI is available at www.allpointsfps.com.

KRG Capital specializes in acquiring and recapitalizing unique and profitable middle-market companies. Since inception, KRG has invested in 45 platform companies and has completed 146 add-on acquisitions for those platforms. Founded in 1996, KRG has $4.3 billion of capital under management and is based in Denver (www.krgcapital.com).

2014 PEPD • Private Equity’s Leading News Magazine • 6-18-14

Apax Exits Advantage Sales & Marketing to Leonard Green and CVC Capital Partners

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Apax Partners has agreed to sell its majority ownership stake in Advantage Sales & Marketing (ASM), a provider of outsourced sales and marketing services to manufacturers of consumer goods and retailers across multiple channels, to Leonard Green & Partners and CVC Capital Partners.  Members of ASM’s senior management will continue to maintain a significant equity interest in the company, which is expected to achieve 2014 revenue of approximately $1.6 billion. Apax Funds purchased a controlling stake in ASM in 2010. The transaction is expected to close during the third quarter of 2014.

Advantage Sales & Marketing (ASM) is a sales and marketing agency committed to building brand value for its clients and customers. ASM’s customized sales and marketing solutions include headquarter sales, retail merchandising, and marketing services such as shopper, experiential, digital/social, and multicultural marketing, for the grocery, drugstore, club, convenience, natural/specialty, consumer electronics, home center, and foodservice industries. Headquartered in Irvine, CA and founded in 1987, ASM has more than 38,000 associates and offices throughout the United States and Canada (www.asmnet.com).

During Apax Funds’ ownership period, ASM achieved substantial growth, both organically and through strategic acquisitions by enhancing its core service offerings in existing channels, expanding into new channels and enhancing the technology platforms used to collect, analyze, and deliver actionable insights to clients.

Apax invests in technology & telecom; retail & consumer; media; healthcare; and financial & business services sectors.  Apax is based in London and New York (www.apax.com).

“Apax Partners have added tremendous value to ASM over the past three-and-a-half years,” said Tanya Domier, ASM Chief Executive Officer. “This partnership has been a textbook example of how a private equity firm and a management team can create value together through collaborating on strategy, growth, and vision, and being willing to work hard to take a good company to great! We set out with a clear vision, worked hard together, and focused on accelerating growth, and that is exactly what we accomplished.”

“ASM is an exceptional company with an incredible track record, strong brand equity, and tremendous opportunities for growth,” said Jonathan Sokoloff, Managing Partner at LGP. “We are excited to partner with Tanya and the rest of ASM’s talented management team and look forward to supporting the next phase of the Company’s growth.”

Leonard Green & Partners’ invests in middle-market companies with market-leading franchises and defensible competitive positions, attractive growth prospects and proven management teams. The firm’s investments are in the form of traditional buyouts, going-private transactions, recapitalizations, growth capital investments, corporate carve-outs and selective public equity and debt positions. Sectors of interest include retail, distribution, healthcare, aerospace/defense and consumer/business services. Leonard Green & Partners was established in 1989 and manages approximately $15 billion of equity capital. The firm is located in Los Angeles, CA (www.leonardgreen.com).

CVC invests in a range of industries with a specific interest in industrial and service businesses. To date, CVC has raised over $56 billion in capital completing over 300 investments with an aggregate transaction value of $172 billion. The firm, founded in 1981, is based in London and has a network of 20 offices and 250 employees throughout Europe, Asia and the United States (www.cvc.com).

BofA Merrill Lynch (lead advisor) and J.P. Morgan Securities LLC are serving as financial advisors to ASM and Apax and Skadden, Arps, Slate, Meagher & Flom is acting as legal advisor. Latham & Watkins acted as legal counsel to LGP in connection with the transaction. Simpson Thacher & Bartlett acted as legal counsel, and Morgan Stanley served as financial advisor to CVC in the transaction.

The debt financing for the transaction has been committed to by BofA Merrill Lynch, Credit Suisse Securities (USA), and Deutsche Bank Securities.

2014 PEPD • Private Equity’s Leading News Magazine • 6-18-14

Black Canyon Exits TASI Holdings

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TASI Holdings, a portfolio company of Black Canyon Capital, ClearLight Partners, and Industrial Growth Partners was sold to the Berwind Group.

TASI is a provider of test, measurement, inspection and automation services for mission-critical applications in the Americas, Europe and Asia. The company’s services focus on enhancing customer productivity by reducing manufacturing cost, avoiding rework, improving quality and reliability, and shortening time to market. TASI serves a diverse customer base in a range of end markets including the transportation, industrial, life sciences, energy, food and beverage and consumer goods industries. TASI is headquartered in Cincinnati, OH (www.tasigroup.com).

Black Canyon provides equity and credit to middle-market companies based in the United States. Black Canyon has invested over $1 billion across diverse industries including business services, consumer durables, retail, restaurants, media, test and measurement, and industrial manufacturing. Black Canyon is headquartered in Los Angeles (www.blackcanyoncapital.com).

ClearLight Partners invests from $10 million to $50 million in US or Canadian based middle market companies with revenues from $20 million to $250 million and EBITDAs from $5 million to $25 million. Sectors of interest include specialty manufacturing and distribution; business services; and consumer products and services. The firm has $900 million of assets under management and is based in Newport Beach, CA (www.clearlightpartners.com).

Industrial Growth Partners provides equity capital to lower-middle market manufacturing and manufacturing services companies with revenues of $30 million to $100 million. The firm invests equity in a range of transactions involving a change of ownership, such as management buyouts, leveraged buyouts, corporate divestitures, recapitalizations and management buy-ins. The firm was founded in 1997 and is based in San Francisco (www.igpequity.com).

Berwind Corporation is a family-owned investment management company.  Berwind targets middle market companies with transaction values of $75 million to $700 million, and focuses on manufacturing businesses in a range of industries including pharmaceutical, specialty chemical, office and craft, automotive, consumer and natural resources. .  The company is based in Philadelphia, PA (www.berwind.com).

2014 PEPD • Private Equity’s Leading News Magazine • 6-18-14

Tricor Pacific Closes Fund V at C$345 Million

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Tricor Pacific has closed its fifth fund, Tricor Pacific Capital Partners Fund V, with aggregate committed capital of C$345 million.

Tricor invests in profitable, well-managed, lower middle-market companies in the US and Canada.  Since inception in 1996, Tricor has managed over $1 billion of capital invested in companies in the specialty manufacturing, business services and value-added distribution industries.  The firm is actively seeking new investments in these industries.  No new investments have been completed yet for fund V.

Tricor Pacific’s Fund IV has five companies remaining: Advance Engineered Products is the largest Canadian manufacturer of a broad range of specialized truck tanks and trailers; Avison Young is North America’s fastest growing commercial real estate services firm with over 1,500 real estate professionals and 54 offices; BFG Supply is a distributor of supplies to the US greenhouse growing, nursery and professional turf industries; CPI Card Group is North America’s largest manufacturer of financial payment cards and other card products and services; Fabpro Oriented Polymers is a leading manufacturer of netting and synthetic twine for agricultural packaging and high-performance fibers for concrete reinforcement; and Strong Precision Technologies is a manufacturer of precision-machined components serving the medical and industrial markets.

Tricor Pacific invests in middle-market companies with enterprise values from $25 million to $250 million in the manufacturing, service, distribution and consumer product sectors that are located in the west and mid-west regions of Canada and the United States. The firm currently manages approximately $1 billion of capital and is investing its fourth fund with $555 million in committed capital. Tricor Pacific was founded in 1996 and is headquartered in Vancouver with an additional office in Chicago (www.tricorpacific.com).

2014 PEPD • Private Equity’s Leading News Magazine • 6-18-14

ACG New York’s June 20 Breakfast To Focus On “The BDCs–From A to Z”

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A panel of financial executives will examine both the basics and complexities of business development companies at a breakfast of ACG New York’s Westchester Network in Tarrytown on Friday, June 20 from 7:30 a.m. to 9:30 a.m.

A Business Development Company (BDC) is often characterized as a publically traded private equity firm that provides middle market and small companies with access to capital all the way through the capital structure from debt to equity; that facilitates private equity funds with access to public capital markets by listing on the NYSE or Nasdaq; and that enables retail investors to participate in the upside of pre-IPO investing.

Carolyn Bentzien, managing director, Valuation Research Corporation, will moderate the panel, entitled “The BDCs–From A to Z.”  Panelists will be Gregg Felton, president and co-chief executive officer, Full Circle Capital; Richard Petrocelli, chief accounting officer, Fifth Street Finance Corp.; Stephen Bernier, principal, Stellus Capital Management; and Scott Schuenke, chief financial and chief compliance officer, MVC Capital.

Ms. Bentzien manages client relationships and business development for Valuation Research Corporation, which provides valuation services to the financial services industry, including to alternative investment and specialty finance firms such as BDCs, SBICs, and private equity firms.  Before joining VRC, Ms. Bentzien held the position of CFO, Corporate Client Banking, Commercial Banking, as well as that of executive director, Finance and Control, Global Markets, Investment Banking, at JPMorgan Chase.  She also held the position of Senior Finance Analytics, Corporate Investment Bank at Deutsche Bank and held similar positions at Bank of Montreal and Bank of Tokyo Mitsubishi UFJ.

Mr. Felton is primarily responsible for Full Circle Capital’s overall investment strategies and portfolio management.  He is also a managing member and chief investment officer of Full Circle Advisors and a managing member of Full Circle Service Company.  Before joining Full Circle Capital in 2013, he was a partner and managing director of Goldman Sachs and the founder and chief investment officer of Liberty Harbor, Goldman Sachs Asset Management’s credit alternatives platform.

Mr. Petrocelli joined Fifth Street, one of the largest business development companies (BDCs) in the country by market capitalization, in March 2014.  He also serves as a managing director, Finance of Fifth Street’s administrator.  Mr. Petrocelli has over 20 years of experience in investment management, private equity and corporate reorganizations.  Before joining Fifth Street, Mr. Petrocelli served as Chief Financial Officer, Chief Compliance Officer and Secretary at Saratoga Investment Corp., a publicly-traded BDC, where he was responsible for all accounting, finance, compliance and fund administration functions and had direct involvement in the underwriting of new loans.

Mr. Bernier focuses on the origination, execution, and management of middle market loans. He has 15 years of investing and finance experience. Prior to joining Stellus Capital Management at its formation in January 2012, he was a Vice President with the Direct Capital Group at D.E. Shaw, a global investment and technology development firm.  Before joining D.E. Shaw, Mr. Bernier was a manager with PricewaterhouseCoopers, where he served clients in the audit, tax, and corporate finance practices.

Mr. Schuenke originally joined MVC Capital, (NYSE: MVC), a business development company, in 2004 as corporate controller.  Later that year he became the firm’s chief compliance officer and in 2013 was appointed CFO.  He also serves on the boards of portfolio companies Vestal Manufacturing Enterprises, Inc. and NPWT Corporation.  Before joining MVC Capital, Mr. Schuenke was a compliance officer with US Bancorp Fund Services, LLC, where he was responsible for financial reporting and compliance oversight of more than 15 open- and closed-end registered investment companies.

Expected attendees include corporate development officers, investment bankers, private equity sponsors, private sector CEOs, and transactional advisors.

The agenda for the event at the Tappan Hill Mansion, 81 Highland Ave, Tarrytown, N.Y., is as follows:

7:30 a.m. – 8:00 a.m. – Breakfast/Networking
8:00 a.m. – 8:15 a.m. – Introductions
8:15 a.m. – 9:15 a.m. – Panel followed by Q&A
9:15 a.m. – 9:30 a.m. – Additional Networking

The registration fee is $75 for ACG members and $100 for non members.  To register, click here.

http://www.acg.org/nyc/registrationinstructions.aspx

ACG New York (www.acgnyc.org), the founding chapter of The Association for Corporate Growth, is the leading membership organization in New York that facilitates relationship building and focused education for middle market deal-making professionals.  Each year over 8,000 professionals participate in ACG New York’ s 70+ networking and educational events in New York City and Westchester and on Long Island, including healthcare, manufacturing & logistics, and retail conferences.  ACG New York currently is celebrating its 60th year.

2014 PEPD • Private Equity’s Leading News Magazine • 6-18-14

KPS Adds-on to A&E with Buy of Gütermann

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American & Efird Global, a portfolio company of KPS Capital Partners, will acquire substantially all of the industrial and consumer thread business of Gütermann Holdings.  Completion of the transaction is expected on June 30, 2014.

American & Efird Global (A&E) is the largest US manufacturer and the world’s second-largest manufacturer and distributor of industrial and consumer sewing thread, embroidery thread and technical textiles.  A&E thread is used by producers of apparel, automotive components, home furnishings, medical supplies, footwear and certain industrial products.  A&E owns or operates 22 manufacturing facilities and employs over 9,000 associates around the world directly or in partnership with joint venture partners.  KPS acquired A&E from Harris Teeter Supermarkets (now a subsidiary of The Kroger Co. (NYSE:KR)) in November 2011.  A&E is headquartered northwest of Charlotte in Mt. Holly, NC (www.amefird.com).

“The transformation of A&E under KPS’ ownership is remarkable.  A&E has exceeded all of our expectations for growth on a global scale by successfully expanding into adjacent geographies, products and end-markets,” said Michael Psaros, a Managing Partner of KPS.  “The strategic and industrial logic of A&E acquiring Gütermann is extraordinarily compelling as it will even further advance A&E’s industry-leading quality, customer service and innovation, delivered through an integrated and truly global manufacturing footprint.  A&E’s conservative capital structure, absence of large unfunded pensions and other legacy obligations, coupled with its access to KPS’ material capital resources, positions the company to grow aggressively organically and through acquisition.”

Gütermann is a manufacturer and distributor of sewing thread products for consumer and industrial applications.  The company’s products serve a variety of end-markets, including apparel, shoes, leather goods, work wear, home textiles and automotive end markets.  Gütermann has a highly regarded brand name globally and a strong reputation among European apparel and non-apparel brands.  Gütermann owns and operates four manufacturing facilities located in Germany, Spain, Mexico and India, and employs approximately 1,000 associates around the world. The company was founded in 1864 and is headquartered in Gutach, Germany (www.guetermann.com).

“The acquisition of Gütermann is a critical strategic step in the growth of A&E.  We are very impressed with Gütermann’s diverse product portfolio, customer base, premium quality and technical capabilities.  Gütermann’s strong market position in Europe coupled with A&E’s worldwide manufacturing and distribution footprint and strong brand recognition in North America and Asia is an ideal combination.  This acquisition furthers our commitment to support our customers globally with high-quality localized supply, technical resources, customer service support, and the highest environmental and social responsibility.  A&E has made tremendous progress under KPS ownership and, with the strategic addition of Gütermann, I believe our future is even brighter,” said Fred Jackson, Chief Executive Officer of A&E.

KPS Capital Partners is the manager of the KPS Special Situations Funds, a group of private equity funds with $6 billion of committed capital focused on investing in restructurings, turnarounds and other special situations. The KPS investment strategy targets manufacturing and industrial companies with strong market positions that are going through a period of transition or experiencing operating or financial difficulties. The firm’s portfolio companies have aggregate annual revenues of approximately $7.6 billion, operate 99 manufacturing plants in 26 countries, and employ over 47,000 associates worldwide. KPS Capital Partners is headquartered in New York (www.kpsfund.com).

Financing for the transaction will be provided by a syndicate of banks led by Merrill Lynch along with Wells Fargo Securities, and PNC Capital Markets acting as Joint Lead Arrangers.

2014 PEPD • Private Equity’s Leading News Magazine • 6-16-14

Oak Hill to Acquire Pulsant

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Pulsant, a provider of managed, hosted data center and IT infrastructure services to the mid-market, has entered into an agreement to be acquired by Oak Hill Capital Partners.  Pulsant is a portfolio company of Bridgepoint Development Capital.

Pulsant was formed in October 2010 when Bridgepoint Development Capital acquired Lumison, a provider of connectivity, hosting and managed IT services. Subsequently, Pulsant (as the business was re-branded) made three further acquisitions: Blue Square Data, a colocation provider, acquired in February 2011; Dedipower, a managed hosting and cloud services provider, acquired in September 2011; and Scolocate, a provider of colocation, managed hosting and cloud services in Scotland, acquired in December 2012. Pulsant currently provides its services from a network of 10 company operated datacenters across the UK, connected via the company’s own fiber network. Pulsant is headquartered in Reading, UK (www.pulsant.com).

“We are pleased to be investing in Pulsant and to be supporting Mark Howling and the rest of the Pulsant management team as the company continues its strong growth trajectory,” said David Scott, Principal at Oak Hill.  “With this transaction, Oak Hill builds upon a decade of significant data centre expertise, where Oak Hill has a demonstrated track record. We believe Pulsant is well positioned to grow in the data centre services market with clear and sustained demand for its services.  We look forward to further building the Pulsant franchise.”

Oak Hill is an experienced investor in the data centre services market. Its current IT services investments include ViaWest, a provider of colocation and hybrid cloud services to medium-sized enterprises in regional US markets, and Intermedia.net, a provider of cloud-based, hosted services to small- and medium-sized businesses. In 2005, Oak Hill co-led the consolidation of the European colocation industry by acquiring Telecity Group and executing on a number of subsequent strategic acquisitions.

“We expect continued significant consolidation amongst suppliers in this dynamic market, and we believe Pulsant is well-positioned to expand its leadership position by executing on targeted acquisitions, bringing additional capabilities to benefit Pulsant and its customers,” said Mark Howling, CEO of Pulsant.  “As we considered our strategic options for the business, there was a lot of interest, but Oak Hill emerged as the preferred partner, having a strong understanding of the market and of businesses like Pulsant. Oak Hill will be an active partner and we are very much looking forward to working with them.”

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).

“With Mark Howling and the team, we achieved what we set out to do: for Pulsant to become the trusted partner to medium-sized businesses looking for a provider to meet all of their IT and networking needs,” said Alan Payne, Partner at Bridgepoint Development Capital.

Bridgepoint Development Capital provides funding to businesses headquartered in France, the Nordic region and the UK, typically buyouts valued up to €150 million. BDC has a team of 19 investment professionals wholly dedicated to its investment activity and operating from offices in London, Paris and Stockholm. It is part of Bridgepoint, the international private equity group, which invests in businesses valued between €200 million and €1 billion across Europe (http://www.bridgepoint.eu/en/).

Advisers involved in this transaction for Bridgepoint included:  Jefferies (Corporate Finance), Travers Smith (Legal),  Deloitte (Financial and Tax), Boston Consulting Group (Commercial), ERM (Environment), Marsh (Insurance), and MEIT (Technical). Advisors to Oak Hill included Torch Partners (Corporate Finance), Macfarlanes and Paul Weiss (Legal) and EY (Financial and Tax).

2014 PEPD • Private Equity’s Leading News Magazine • 6-16-14

Lone Star Funds Acquires DFC Global

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DFC Global, a provider of financial services to unbanked and under-banked consumers, has been acquired by Lone Star Funds.

DFC Global is an international non-bank provider of alternative financial services, principally unsecured short-term consumer loans, secured pawn loans, check cashing, gold buying, money transfers and reloadable prepaid debit cards, serving primarily unbanked and under-banked consumers through its approximately 1,500 current retail storefront locations and its multiple Internet platforms in ten countries across Europe and North America: the United Kingdom, Canada, the United States, Sweden, Finland, Poland, Spain, Romania, the Czech Republic and the Republic of Ireland. DFC Global is headquartered near Philadelphia in Berwyn, PA (www.dfcglobalcorp.com).

Lone Star invests in real estate, equity, credit, and other financial assets. Since the establishment of its first fund in 1995, Lone Star has organized twelve private equity funds with aggregate capital commitments totaling over $45 billion. The firm is based in Dallas (www.lonestarfunds.com).

2014 PEPD • Private Equity’s Leading News Magazine • 6-16-14

First Reserve Closes Fund 2 at Hard Cap of $2.5 Billion

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First Reserve has closed its second energy infrastructure fund, First Reserve Energy Infrastructure Fund II, LP.  The new fund was launched just eight months ago and was oversubscribed beyond its initial target of $2 billion and closed at its $2.5 billion hard cap.  First Reserve now has over $4 billion dedicated to investing in energy infrastructure opportunities.

“First Reserve initially launched an energy infrastructure investment program to enable our team to offer broader and more strategic solutions to both our wide network of corporate partners and our investors. We are thrilled at how the strategy has played out, meeting our expectations of delivering long-term contracted revenues,” said William Macaulay, Chairman and Chief Executive Officer of First Reserve.  “The success of this most recent fundraise is a testament to our investors’ belief in our investment model and the strong execution of our infrastructure investment team.”

Fund 2 will continue to focus on energy infrastructure investments including (1) contracted midstream, such as pipelines, storage and LNG facilities; (2) contracted power, which includes both renewable and conventional generations; (3) regulated transmission and distribution; and (4) contracted energy assets including floating storage facilities and other essential large-scale energy infrastructure assets.  The new fund, like the first, will continue to emphasize strategic joint ventures.  To date, First Reserve Energy Infrastructure Fund I, LP has formed partnerships on nearly all its portfolio investments.

“With a fully dedicated infrastructure investment team that has deepened substantially since the first fund, we believe we remain well-positioned to continue generating attractive, proprietary opportunities,” said Mark Florian, Managing Director and Head of Infrastructure.  “By drawing on the vast base of experience in both the infrastructure team and the larger First Reserve platform, we feel we have distinguished ourselves as a value-add strategic partner. We are both honored and excited to be able to continue prosecuting these kinds of opportunities on behalf of our limited partners in both funds.”

First Reserve is a private equity firm with a focus on the energy industry.  First Reserve has completed more than 475 transactions (including platform investments and add-on acquisitions) on six continents. Its portfolio companies operate in approximately 50 countries and span the energy spectrum from upstream oil and gas to midstream and downstream, including resources, equipment and services and infrastructure. The firm was founded in 1983 and has offices in Houston, TX; Greenwich, CT; London, UK and Hong Kong (www.firstreserve.com).

2014 PEPD • Private Equity’s Leading News Magazine • 6-16-14

Empire State Manufacturing Survey Looking Good

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The June 2014 Empire State Manufacturing Survey indicates that business conditions improved significantly for a second consecutive month for New York manufacturers. A free copy of the  second quarter report from the New York Federal Reserve Bank is available at the end of this article.

The general business conditions index was 19.3, a reading nearly identical to last month’s multiyear high. The new orders index climbed eight points to 18.4, its highest level in four years, and the shipments index inched down to 14.2. The unfilled orders index held steady at a level close to zero. The indexes for both prices paid and prices received were slightly lower, indicating a slowing in the pace of price increases. Labor market conditions continued to improve, with indexes pointing to a modest increase in employment levels and hours worked. Indexes for the six-month outlook remained highly optimistic, with the future new orders and shipments indexes recording notable gains.

BUSINESS ACTIVITY EXPANDS AT A SOLID CLIP
Business conditions improved significantly for a second consecutive month for New York manufacturers, according to the June 2014 survey. After climbing to a multiyear high last month, the general business conditions index held steady at 19.3. Forty percent of respondents reported that conditions had improved over the month, while 21 percent reported that conditions had worsened. The new orders index advanced eight points to 18.4, its highest level in four years. The shipments index fell three points but, at 14.2, still pointed to a significant expansion in shipments over the month. The unfilled orders index remained at -1.1, indicating that the level of unfilled orders was largely stable. The delivery time index rose two points to 1.1. The inventories index rose seven points to 9.7, indicating that inventory levels were somewhat higher in June.

PRICE INCREASES SLOW FOR A SECOND MONTH
For a second consecutive month, both price indexes inched lower, suggesting that price increases were somewhat slower over the month. The prices paid index fell three points to 17.2, and the prices received index fell two points to 4.3. After surging last month, the index for number of employees fell back to 10.8, suggesting that employment levels continued to climb, though at a more modest pace than last month. The average workweek index moved up seven points to 9.7, pointing to an increase in hours worked.

SIX-MONTH OUTLOOK REMAINS OPTIMISTIC
As in May, indexes for the six-month outlook conveyed a strong degree of optimism about future business conditions. The index for future general business conditions fell four points, but remained high at 39.8. The future new orders index climbed to 44.5, and the index for expected shipments rose eleven points to 45.2. Indexes for expected prices were somewhat higher, with the future prices paid index rising five points to 36.6 and the index for future prices received climbing two points to 16.1. The index for expected number of employees rose to 20.4, and the future average workweek index rose to zero. The capital expenditures index fell for a second consecutive month, dropping to 11.8—a sign that while capital spending plans were generally positive, spending growth was expected to slow. The technology spending index was little changed at 3.2, suggesting only a slight increase in technology spending.

For a PDF copy of the second quarter report from the New York Federal Reserve Bank click HERE.

 2014 PEPD • Private Equity’s Leading News Magazine • 6-16-14

RLJ Equity Partners Acquires EnviroVac

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RLJ Equity Partners has acquired EnviroVac Holdings, a provider of industrial cleaning, environmental services, and on-site maintenance support.

“EnviroVac is a trusted brand in the industrial services industry,” said Jerry Johnson, Managing Director of RLJ Equity Partners. “The company has a safety-first approach in providing the most innovative environmentally safe technology and quality operations to its clients and customers.  We are excited about the opportunities underway at EnviroVac under R. Kevin Jackson’s leadership, and we look forward to assisting the company as it continues to offer a premium standard of service.”

EnviroVac utilizes state-of-the-art equipment to provide industrial vacuuming, hydroblasting, watercutting and inspection services for customers who participate in the pulp and paper, chemical, steel, oil and gas, power generation and other industrial business sectors.  EnviroVac has a staff of more than 300 employees and 10 facility locations to serve customers throughout Alabama, Georgia, Mississippi, North Carolina and South Carolina, among other states. The company was founded in 1999 and headquartered in Savannah, GA (www.envirovac.us).

“We are delighted to join forces with RLJ Equity Partners, and I will be continuing my role as CEO as well,” said R. Kevin Jackson, EnviroVac founder, president and CEO. “Partnering with the RLJ brand will help EnviroVac continue to provide the safest and most professional services to our customers with optimal efficiency and support as we expand our services across the country, particularly throughout the Southeast and Gulf Coast regions.”

RLJ Equity Partners, LLC was joined in the transaction by Madison Capital Funding, New Canaan Funding and RLJ Credit, an affiliate of The RLJ Companies. EnviroVac was advised in the transaction by Farlie Turner & Co.

RLJ Equity Partners invests from $15 million to $30 million in companies valued between $50 million and $250 million. Target companies will have operating profits greater than $7 million and operating margins greater than 10%.  Sectors of interest include aerospace & defense; auto & transportation; business services; consumer retail; general industrial; and media & telecom.  RLJ Equity Partners was founded in 2006 by Robert L. Johnson in partnership with The Carlyle Group. The firm is headquartered in Bethesda, MD (www.rljequitypartners.com).

2014 PEPD • Private Equity’s Leading News Magazine • 6-13-14