Archives for July 30, 2014

EDG Partners Invests in MMIS

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EDG Partners has made a growth equity investment in MMIS, a provider of software used by pharmaceutical and medical device companies.  The new investment by EDG Partners will help facilitate the continued market growth of MMIS and provide for further enhancement of its current technology position.

MMIS provides compliance and business intelligence software for the life science industry.  Customers include pharmaceutical, medical device and bio-pharmaceutical companies.  The company’s MediSpend Global Compliance platform allows organizations to comply with transparency laws, analyze data and communicate with healthcare providers across the world.  MediSpend Global Compliance ensures compliance with US and global transparency regulations and laws, including the US Open Payments (the Sunshine Act) and Loi Bertrand (French Sunshine Act) in France. The Open Payments law, which requires all medical device and pharmaceutical companies to disclose annual direct and indirect spend on all physicians and teaching hospitals, was passed as part of the Affordable Care Act in March 2010.  MMIS is based in New York (www.mmis-inc.com).

“MMIS is a dynamic and well positioned company led by its very capable co-founders, Michaeline Daboul (CEO) and Tim Robinson, Esq. (Chief Knowledge Officer).  EDG Partners is pleased to partner with the company’s co-founders and senior leadership team as the company enters a new phase of growth and development,” said J. Stephen Eaton, Co-Founder and Managing Director of EDG Partners.  “We believe MMIS has a terrific opportunity to be the leader in healthcare compliance outsourced solutions.”

EDG Partners invests from $5 million to $25 million of equity in healthcare companies with $10 million to $300 million in revenue and up to $15 million in earnings. The firm was founded in 2004 and has offices in Atlanta, GA and Alexandria, VA (www.edgpartners.com).

“MMIS is excited to partner with EDG, an organization with exceptional healthcare industry experience,” said Ms. Daboul.  “EDG and MMIS share the same vision—the tremendous growth opportunity for MMIS afforded by the complex and global compliance needs of pharmaceutical and medical device organizations. I know the entire MMIS team is excited to have access to the strategic and financial support of our new partner.”

2014 PEPD • Private Equity’s Leading News Magazine • 7-30-14

Charlesbank Exits The Princeton Review

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The Princeton Review, a portfolio company of Charlesbank Capital Partners, has signed an agreement to be acquired by Tutor.com, an operating subsidiary of IAC (NASDAQ: IACI).  The transaction is expected to close on August 1, 2014.

“Together with the talented and dedicated management team at The Princeton Review, we have achieved terrific results over the past two years and generated an attractive return for our investors,” said Josh Klevens, a Managing Director of Charlesbank. “We are pleased to leave the company well-positioned for continued growth and wish them every success as they begin their next chapter under Tutor.com.”

The Princeton Review, acquired by Charlesbank in May 2012, is a provider of test preparation courses and materials for prospective undergraduate and graduate students. Its test preparation services are offered online and in person by a network of more than 5,000 teachers and tutors. The majority of classes prepare students for standardized tests, such as the SAT, ACT, MCAT, GRE, GMAT and LSAT. Princeton Review also offers more than 185 print and software titles on test preparation, academic admissions and related topics. The company is headquartered west of Boston in Natick, MA (www.princetonreview.com).

Charlesbank Capital Partners invests in management-led buyouts and growth capital financings, typically investing from $50 million to $150 million per transaction in companies with enterprise values of $100 million to $750 million. The firm has $2 billion of capital under management and has offices in Boston and New York (www.charlesbank.com).

“We are very proud of what we accomplished during our partnership with Charlesbank,” said Deborah Ellinger, Chairman and CEO of The Princeton Review. “Under their leadership we completed two strategic acquisitions, expanded our capabilities and customer base, built on our reputation for great customer service and helped even more students find their way to their best-fit college or grad school. We now look forward to working with Tutor.com and IAC, whose support will allow us to continue offering top-tier service while expanding our services and our customer base.”

2014 PEPD • Private Equity’s Leading News Magazine • 7-30-14

Arlington Capital Acquires Global News Intelligence

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Novetta Solutions, a portfolio company of Arlington Capital Partners, has acquired Global News Intelligence, a sentiment and influence analytics firm that supports commercial and government clients in the US and abroad.

“Global News Intelligence is a great fit for Novetta, providing both a differentiated technology solution and new customers that are highly complementary. This acquisition reinforces Novetta’s position as a leader in advanced analytics to leading government agencies and commercial firms,” said Michael Lustbader, a Partner at Arlington Capital.

Global News Intelligence (GNI) provides open source intelligence analytics to the Department of Defense, the Department of State and commercial customers.  The company’s products and services allow users to quantify shifts in sentiment, influence and rhetoric across social and traditional media.  GNI has supported clients in aerospace, energy, finance, mining, defense and major political campaigns in Asia, Africa, Latin America and the Middle East. Following the acquisition, GNI will continue to be managed within Novetta by GNI Founder Bryan Rich and GNI CEO Matthew Ennis.  The company employs more than 50 professionals across the US, Middle East, Africa, Latin America, and South Asia and has offices in Albuquerque, NM and Montpelier, VT (www.globalni.com).

Novetta provides advanced analytics technology services to US Government and commercial enterprises working with massive quantities of data, focusing primarily on cyber, identity and social analytics challenges.  The company has approximately 500 employees and is based in McLean, VA (www.novetta.com).

“We are excited to welcome the entire GNI team to Novetta.  GNI is an excellent technology partner for Novetta and will allow us to expand our presence in the sentiment analytics and open source intelligence markets,” said Novetta CEO Peter LaMontagne.  “GNI’s innovative approach to traditional and social media analytics and open source intelligence combines deep subject matter expertise with scalable technology that maps very well to Novetta’s advanced analytics solutions.”

Arlington Capital Partners has $1.5 billion of committed capital and focuses on buyouts and recapitalizations of companies valued from $50 million to $500 million. Sectors of interest include aerospace and defense, government services and software, healthcare services, business services, and education and training. The firm is based in Washington, DC (www.arlingtoncap.com).

2014 PEPD • Private Equity’s Leading News Magazine • 7-30-14

Gryphon Completes Sale of Flagstone Foods

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Gryphon Investors has completed the sale of its portfolio company Flagstone Foods to TreeHouse Foods for $860 million. This transaction was first announced on July 1, 2014.

TreeHouse paid Gryphon Investors and other shareholders $860 million in cash for the business, subject to an adjustment for working capital, and financed the transaction through a combination of borrowings under its existing credit facility and a $374 million equity issuance.

Flagstone Foods is a provider of branded and private-label snacks to retailers across North America in the multi-billion dollar healthy snacks sector. The company was formed in November 2010 when Gryphon simultaneously acquired two independent companies, Ann’s House of Nuts, the largest private-label manufacturer and marketer of trail mix and snack nuts in the world, and American Importing Company (Amport Foods), the largest private-label manufacturer and marketer of dried fruits.  Flagstone Foods reported sales of approximately $697 million for the 2013 fiscal year.  The company is based in Saint Paul, MN (www.flagstonefoods.com).

TreeHouse Foods (NYSE: THS) is a multinational food processing company specializing in producing private label packaged foods for the retail grocery and foodservice distribution channels.  Products include non-dairy powdered creamers and sweeteners; condensed, ready to serve and powdered soups; refrigerated and shelf stable salad dressings and sauces; powdered drink mixes; single serve hot beverages; specialty teas; hot and cold cereals; macaroni and cheese, skillet dinners, and other value-added side dishes and salads; salsa and Mexican sauces; jams and pie fillings; pickles and related products; aseptic sauces; and liquid non-dairy creamer.  TreeHouse Foods is headquartered in the Chicago suburb of Oak Brook (www.treehousefoods.com).

Gryphon Investors makes leveraged acquisitions and growth investments in middle-market companies. The firm invests from $35 million to $100 million of capital in companies with sales ranging from $50 million to $250 million. Sectors of interest include business services, consumer and retail, automotive, chemical, general manufacturing, health care and hotels. The firm is based in San Francisco (www.gryphoninvestors.com).

2014 PEPD • Private Equity’s Leading News Magazine • 7-30-14

Great Hill Partners Acquires Qualifacts

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Great Hill Partners has acquired Qualifacts Systems, a provider of electronic health records for the behavioral health and human services industries.

“Qualifacts has emerged as a recognized leader in behavioral health software, but there’s more we want to do to ensure that our customers are successful for the long-term,” said David Klements, President & CEO of Qualifacts. “To help us maximize our full potential, Qualifacts management wanted a financial partner with the right experience and resources. Great Hill was a perfect fit and we’ve already hit the ground running.”

Qualifacts is the largest cloud-based provider of electronic health records (EHR) and billing systems for behavioral health and human services providers. The company’s single platform EHR, CareLogic Enterprise, serves more than 50,000 behavioral health professionals across the country.  In the past five years, the company has grown its customer base by 1000% and workforce by 650%.  Qualifacts is based in Nashville (www.qualifacts.com).

“We are delighted to partner with David and the entire Qualifacts team,” said Mark Taber, a Managing Partner with Great Hill Partners. “Qualifacts offers a unique and powerful platform for behavioral health organizations to drive operational efficiencies, improve access to patient information, and quickly adapt to changing billing and compliance regulations.”

Great Hill Partners manages over $2.5 billion in capital to finance the expansion, recapitalization or acquisition of growth companies in a range of sectors within the media/communications, Internet, business services, consumer services, financial technology, healthcare technology, software, and transaction processing sectors. The firm targets investments of $25 million to $150 million. Great Hill Partners is based in Boston (www.greathillpartners.com).

“We believe Qualifacts has tremendous growth potential as behavioral health providers seek ways to manage increasing patient volume along with highly dynamic state and federal funding requirements,” said Rafael Cofiño, a Principal with Great Hill Partners.

Qualifacts was advised by Raymond James Health Care Investment Banking Group based in Nashville (www.rjhealthcarebanking.com).

2014 PEPD • Private Equity’s Leading News Magazine • 7-30-14

Levine Leichtman Hits 27% IRR on Sale of CPSS

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Levine Leichtman Capital Partners (LLCP) has exited its investment in Consumer Portfolio Services realizing a 27% IRR and a 2.3X multiple of invested capital.

Consumer Portfolio Services (NASDAQ: CPSS) is a specialty finance company that provides indirect automobile financing to individuals with past credit problems, low incomes or limited credit histories.  The company purchases retail installment sales contracts primarily from franchised automobile dealerships secured by late model used vehicles and, to a lesser extent, new vehicles. CPSS funds these contract purchases on a long-term basis primarily through the securitization markets and services the contracts over their lives.  CPSS maintains a portfolio of more than$1 billion of automobile contracts.  CPSS is headquartered in Irvine, CA with four branches in Nevada, Virginia, Florida and Illinois (www.consumerportfolio.com).

Levine Leichtman invested $25 million in CPSS in July 2008 and made a $20 million follow-on investment in December 2010.

“We have thoroughly enjoyed our long term partnership with CPSS and its management team led by Chairman and CEO Charles Bradley, Jr.  During the past six years, we have seen CPSS deliver on its significant growth in contracts purchased and managed receivable portfolio.  We are very pleased to have been part of the CPSS success story,” said Lauren Leichtman, CEO of LLCP. “We are also pleased to provide a very attractive return to LLCP’s investors through an exit that was facilitated by CPSS’ excellent access to the capital markets.”

Levine Leichtman manages approximately $7 billion of capital through private equity partnerships, distressed debt and leveraged loan funds. The firm is currently making new investments through Levine Leichtman Capital Partners V, LP; Levine Leichtman Capital Partners SBIC Fund, LP; and Levine Leichtman Capital Partners Private Capital Solutions II, LP. The firm is based in Los Angeles with offices in Chicago, Dallas, New York and London (www.llcp.com).

2014 PEPD • Private Equity’s Leading News Magazine • 7-30-14

Alcentra Capital Backs ACT Lighting

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Alcentra Capital has provided $11.5 million in senior subordinated debt and junior subordinated debt to ACT Lighting, a distributor of lighting controls and a portfolio company of Base Equity Partners.

ACT Lighting is a distributor of lighting control consoles, lighting fixtures, and cable for live entertainment events. The company’s services include marketing, selling, supporting and servicing equipment used by rental companies and tour operators to put on live events. The company is based in Agoura Hills, CA (www.actlighting.com).

Alcentra Capital provides $5 million to $15 million of capital per transaction to middle market companies based in North America that have EBITDA in excess of $5 million.  Types of investments include subordinated debt and, to a lesser extent, senior debt and minority equity investments.  Sectors of interest include healthcare services, business services, and defense and government services.  The firm has offices in Boston, London, New York and Singapore (www.alcentra.com).

Base Equity Partners invests in companies with $10 million to $100 million in sales. Sectors of interest include consumer/retail, media/entertainment, business services, technology & information services, healthcare services, and financial services.  Base Equity Partners is led by Ben Schneider and Anthony Ekmekjian and is headquartered in New York (www.baseequitypartners.com).

2014 PEPD • Private Equity’s Leading News Magazine • 7-30-14