Archives for July 17, 2014

GTCR Acquires Cole-Parmer

by

Thermo Fisher Scientific has signed an agreement to sell its Cole-Parmer Instrument Company to GTCR for $480 million in cash.  GTCR’s investment in Cole-Parmer will be funded from GTCR Fund XI, a private equity fund raised in 2014 with $3.8 billion of capital commitments.  The transaction is expected to close in the third quarter.

“The acquisition of Cole-Parmer from Thermo Fisher underscores GTCR’s extensive experience in corporate carve-outs, and highlights GTCR’s continued enthusiasm for investing in companies that serve the broader life sciences industry,” said Sean Cunningham, Managing Director at GTCR.

Cole-Parmer is a manufacturer and distributor of specialty laboratory equipment, instruments and supplies to a range of customers in pharmaceutical, biotech, healthcare, chemicals, food and other research-based or regulated markets. The business has technical expertise across a range of specialty products in the field of fluid handling, test & measurement, electrochemistry and other laboratory products.  The business had approximately $230 million in revenues in 2013 and is part of Thermo Fisher’s Laboratory Products and Services Segment. The company was founded in 1995 and is based in the Chicago suburb of Vernon Hills, IL (www.coleparmer.com).

“We are excited to acquire Cole-Parmer from Thermo Fisher,” said Dean Mihas, Managing Director at GTCR. “We believe Cole-Parmer’s strong reputation, management team and portfolio of leading brands provides a unique position within the diverse end-markets it serves. GTCR looks forward to investing in the business and building a leading company within the life sciences and lab supply industry.”

Thermo Fisher Scientific (NYSE:TMO) is a biotechnology product development company, created in 2006 by the merger of Thermo Electron and Fisher Scientific. The company also sells analytical instruments, equipment, reagents and consumables, software and services for research, manufacturing, analysis, discovery and diagnostics. Revenues for 2013 were approximately $13.1 billion. The company is based in Waltham, MA (www.thermofisher.com).

GTCR pioneered the investment strategy of identifying and partnering with executives to acquire and build companies through a combination of acquisitions and internal growth. The firm currently has nearly $11 billion in assets under management. Since its inception in 1980, GTCR has invested more than $10 billion in over 200 companies. The firm is based in Chicago (www.gtcr.com).

Credit Suisse served as financial advisor to GTCR and will provide financing for the transaction. Kirkland & Ellis served as legal counsel to GTCR.

2014 PEPD • Private Equity’s Leading News Magazine • 7-17-14

Genstar Completes Sale of Evolution1 To WEX

by

Genstar Capital has completed the previously announced sale of Evolution1, a provider of health payments and technology, to WEX Inc. (NYSE: WEX) for $532.5 million.

Evolution1 provides healthcare software and payment solutions that administer and manage consumer directed accounts such as Health Spending Accounts (HSAs), Flexible Spending Accounts (FSAs), and Defined Contribution 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.  The company is based in Fargo, ND (www.evolution1.com).

“Evolution1 is another great example of Genstar building industry-leading businesses. We would like to congratulate the Evolution1 management team for their efforts and partnership over the past several years,” said Eli Weiss, a Principal at Genstar.  Moving forward, we continue to expand the firm’s focus on software where we believe there are significant opportunities.”

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 more than 1,400 employees and 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 • 7-17-14

RLJ Equity Partners Exits Media Source

by

RLJ Equity Partners, an affiliate of The RLJ Companies, has completed the sale of its portfolio company Media Source.  RLJ Equity Partners acquired Media Source from the Riverside Company in 2011.

Media Source (MSI) is a provider of content, information and advice to the library market, serving K-12, public and academic librarians, publishers and suppliers.  The company’s services and products include print and digital collection development services, online and live professional development, book and multimedia reviews, journal subscriptions, websites and webinars.  Subsidiary companies include: Junior Library Guild, The Horn Book, Library Journal and School Library Journal. The company is based northwest of Columbus in Plain City, OH (www.mediasourceinc.net).

“Media Source, Inc. has a long-standing reputation as a trustworthy resource for librarians and school systems across the country,” said RLJ Equity Partner’s Managing Director Jerry Johnson. “RLJ is pleased with MSI’s performance as we worked with management to expand the company’s market position and increase its profitability by developing a range of new services, an e-book platform, and improving its sales force effectiveness.”

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).

“RLJ Equity Partners provided an exceptional level of assistance to MSI and our efforts to become a leader in the education services market,” said Media Source, Inc. CEO and President Randy Asmo. “With RLJ’s strategic direction and relationships, MSI continued to thrive and increase our national presence and product offerings within the library and academic marketplace.”

Piper Jaffray & Co. advised RLJ Equity Partners on the sale of MSI, and DLA Piper provided legal counsel on the deal.

2014 PEPD • Private Equity’s Leading News Magazine • 7-17-14

Lariat Partners Closes First Fund at $118 Million

by

Lariat Partners has held a final closing of Lariat Partners Fund I, LP at $118 million.  Lariat invests in lower middle market companies that have EBITDA of $2 million to $20 million. The firm expects Fund I to have five platform investments instead of, according to Lariat, the typical 10-12 platforms.

“First time funds are difficult to raise, especially during a challenging economy,” said Jay Coughlon, Managing Partner of Lariat Partners.  “Our unique hybrid structure allowed us to rapidly raise Fund I in nine months and close our first three platforms very quickly.”

The three platform companies already purchased by Lariat include Northern Seed, a distributor of certified seed and a provider of seed conditioning and treatment services based in Butte, MT (www.northernseedllc.com). Northern Seed has completed two add-on acquisitions with the buys of WestFeeds and Montana Seed and Grain; Subsea Global Solutions, a provider of  underwater repair, maintenance and marine construction based in Miami (www.subseasolutions.com); and Newpark Environmental Services (renamed Ecoserv), a provider of energy & environmental services based in Lafayette, LA (www.ecoserv.net).

Lariat invests in lower middle market companies that have EBITDA of $2 million to $20 million.  The firm targets companies across a number of industries with a specific interest in specialty agriculture, energy and environmental services, and healthcare services.  Lariat was founded in January 2013 by Jay Coughlon and Kevin Mitchell and is based in Denver (www.lariatpartners.net).

Lariat did not engage a placement agent to assist the firm in raising capital for Lariat Partners Fund I, LP.

2014 PEPD • Private Equity’s Leading News Magazine • 7-17-14

Summit Partners Raises $1 Billion for Second Credit Fund

by

Summit Partners has raised $1 billion for its second credit fund, Summit Partners Credit Fund II, to address the borrowing needs of middle-market companies.  The target for Fund II was $750 million. The new fund will be run from Boston by Managing Directors Todd Hearle and Jamie Freeland and Summit’s dedicated credit team.

Investors participating in the new fund include public and private pension plans, insurance companies, funds of funds, family offices, endowments and foundations.

“All of us at Summit appreciate the investor support we’ve received from new and existing limited partners for our Credit Fund II,” said Tom Roberts, Managing Director at Summit Partners.  “The high level of demand reflects the appeal of our credit capability, our leading position in the middle market and our differentiated sourcing model.”

Summit Partners Credit Fund II will target credit investments in profitable companies with proven business models, a record of stable growth, and the leadership capable of sustaining that growth.  Sectors of interest include technology, healthcare & life sciences, financial technology & services, consumer and industrial.

Fixed income investing has been an active component of Summit Partners’ investment platform since 1994. Summit has funded a total of more than $1.8 billion fixed income investments, including subordinated debt investments in conjunction with its equity investments and stand-alone credit investments. In total, Summit has raised $3.3 billion in combined fixed income assets.

“Every year, Summit Partners speaks with thousands of companies around the globe about their growth strategies. Our credit fund leverages this proprietary outreach model and allows us to provide customized, innovative capital solutions to a wider range of businesses,” said Jamie Freeland, Managing Director at Summit Partners.

Summit Partners provides private equity and venture capital for growth companies. Founded in 1984, Summit has raised more than $16 billion in capital and has provided equity, recapitalization, and management buyout financing to more than 395 companies across a range of industries. Summit Partners has offices in Boston, Palo Alto, London, and Mumbai (www.summitpartners.com).

2014 PEPD • Private Equity’s Leading News Magazine • 7-17-14

Eureka Promotes Miller to Partner, Adds New Senior Associate

by

Eureka Growth Capital has promoted Christian Miller to Partner and has added Lisa Harris Millhauser as a new Senior Associate to the firm’s investment team.

Mr. Miller joined Eureka in 2005 as a Senior Associate from L.E.K. Consulting’s Boston office and had worked previously with Eureka as a summer intern prior to graduation from business school. He is a member of the Board of Directors of Fund II portfolio companies CCA Floors and Interiors, Cherry Hill Photo Enterprises, NetBoss Technologies, Toxicology Holdings and UTC Retail, and Fund III portfolio company West Academic Publishing. Mr. Miller received an AB in Economics from Princeton University and an MBA from the Wharton School of the University of Pennsylvania.

“Chris has an excellent track record of collaborating with our portfolio company management teams to help them capitalize on the growth opportunities that drive portfolio company value and returns for our investors,” said Chris Hanssens, Managing Partner of Eureka Growth Capital. “We are extremely pleased to recognize Chris’s contributions to the firm with this well-deserved promotion and look forward to Chris continuing to be an integral part of Eureka’s growth as a trusted partner of small, niche market-leading companies.”

Lisa Harris Millhauser joined Eureka as a Senior Associate in May 2014. Prior to joining Eureka, she was a Vice President at TA Associates, where she sourced, evaluated and drove the execution of minority and control private equity investments across a variety of industries. Prior to TA Associates, Ms. Millhauser worked in strategy and financial planning and analysis at Apple and evaluated and assisted in executing private equity and distressed investments as an Associate at Centerbridge Partners. She has also worked as an Analyst in the investment banking division of Goldman, Sachs & Co. Ms. Millhauser received a BA in Social Studies from Harvard College and an MBA from the Wharton School of the University of Pennsylvania.

“We are delighted to welcome Lisa Harris Millhauser to Eureka. Lisa brings experience and relationships that will allow her to make meaningful contributions in a short period of time, and we look forward to her contributions to our portfolio companies and in evaluating new investments,” said Mr. Hanssens.

Eureka Growth Capital makes control and non-control investments in companies with $10 million to $75 million in revenue. Initial equity investments range from $4 million to $10 million but larger investments can be made with co-investment from the firm’s limited partners. The firm prefers investment opportunities in the Mid-Atlantic and Eastern US. Eureka Growth was founded in 1999 and is based in Philadelphia (www.eurekagrowth.com).

2014 PEPD • Private Equity’s Leading News Magazine • 7-17-14

Black Diamond New Director for Private Equity Funds

by

Black Diamond Capital Management has appointed Samuel Farahnak as a Director in its Private Equity business.  Mr. Farahnak will focus on identifying and evaluating controlling equity investments and M&A opportunities.

“Sam’s wealth of experience and industry knowledge will further strengthen our private equity team and expand our sourcing capabilities,” said Stephen Deckoff, Managing Principal of Black Diamond. “We are pleased to have him join the Black Diamond team.”

Prior to joining Black Diamond, Mr. Farahnak was a Vice President with Platinum Equity where he led many of the firm’s business development, investment origination and evaluation activities.

“I am thrilled to be part of Black Diamond,” said Mr. Farahnak.  “I look forward to working with the team to help achieve the firm’s long-term goals and continue its tradition of excellence.”

Black Diamond invests in performing and distressed markets through the following three platforms: control distressed/private equity; hedge fund; and CLOs and other structured vehicles. The firm was founded in 1995 and employs more than 80 people across multiple offices, including Greenwich, CT; Lake Forest, IL; and London, UK (www.bdcm.com).

2014 PEPD • Private Equity’s Leading News Magazine • 7-17-14