February 9, 2015
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Archives for February 9, 2015

Nautic Partners Acquires IPS

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ips nf4Nautic Partners has partnered with management to acquire IPS Corporation, a provider of solvent cements, specialty plumbing products and specialty adhesives.  IPS was a portfolio company of Calera Capital Partners which acquired its interest in IPS through a leveraged recapitalization of the company in July 2006.

The IPS’ product line includes WELD-ON solvent cements that bind PVC, CPVC and ABS piping systems and were developed by IPS more than 60 years ago.  WELD-ON has market-leading positions in all of its served markets, including irrigation, industrial, electrical, and pool & spa.  In the company’s plumbing ips nf99products division, the IPS’ brands include WATER-TITE, TEST-TITE, GUY GRAY, TRUEBRO, and STUDOR.  IPS also makes methylmethacrylate based specialty adhesives that are marketed under the SCIGRIP brand and are used to bind countertop material, boat and marine components, outdoor signs and in-store trade displays. IPS was founded in 1954 and is headquartered in Compton, CA (www.ipscorp.com).

doug hill nf1

“IPS’ manufacturing excellence and commitment to customer service underpin the company’s remarkable brand strength in its served markets. Contractors, plumbers and other trade professionals rely on IPS’ high-quality, reliable products,” said Doug Hill, Managing Director of Nautic. “IPS has a deep, first-class management team and we feel fortunate to be partnering with them.”

Nautic Partners is a middle-market private equity firm with over $2.5 billion of equity capital under management. Nautic targets majority equity investments of $25 million to $75 million. Sectors of interest include business services, manufacturing, and healthcare. The firm was founded in 1986 and is headquartered in Providence, RI (www.nautic.com).

Chris Pierce nf1“IPS is poised to benefit from recovering US and international construction activity, in both the residential and non-residential sectors,” said Chris Pierce, Managing Director of Nautic. “Beyond this market tailwind, we are encouraged by the robust pipeline of new products being developed by IPS’ R&D teams, stemming from a drive for innovation that has been cultivated at the company for decades.”

GE Capital (www.gecapital.com) and LStar Capital (www.lstarcap.com) provided financing for the transaction. Robert W. Baird & Co. acted as financial advisor to IPS Corporation.

© 2015 PEPD • Private Equity’s Leading News Magazine • 2-9-15

TA Associates to Acquire NorthStar

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northstar nf1TA Associates has signed an agreement to acquire a majority interest in NorthStar Financial Services Group including its nine subsidiary wealth management industry service providers.  NorthStar’s management team will remain as significant owners of the company.

roy burns nf1“NorthStar and its management team have created a platform that serves multiple channels within the global wealth management industry, from money management and pooled investment solutions to integrated technology and compliance services,” said M. Roy Burns, a Managing Director at TA Associates.  “TA Associates’ considerable experience in financial services enables us to offer strategic counsel and resources to augment NorthStar’s organic growth and pursue strategic acquisitions to build long-term value.”

NorthStar Financial Services Group provides asset management, pooled investment services, portfolio accounting, fund distribution and compliance, and printing and marketing services.  Customers include registered investment advisors (RIAs), independent broker dealers and investment management firms.  The company has approximately $275 billion in assets under management and administration.  NorthStar has about 700 employees and is headquartered in Omaha with additional offices in Hauppauge, NY; Chicago, IL; Mill Creek, WA; and Scottsdale, AZ (www.nstar-financial.com).

Todd Crockett nf1“The creation of new alternative investment products is occurring at a rapid pace and the RIA market is one of the highest growth segments in financial services,” said Todd Crockett, a Managing Director at TA Associates.  “NorthStar is recognized as an innovative leader in these evolving sectors, providing RIAs and investment management firms SaaS-based solutions and high touch client-centric administrative services.”

TA Associates makes buyouts and minority recapitalizations of profitable growth companies in the technology, financial services, business services, healthcare and consumer industries. Since founding in 1968, TA has invested in over 450 companies globally and has raised more than $18 billion in capital. The firm has offices in Boston, Menlo Park, London, Mumbai and Hong Kong (www.ta.com).

Goodwin Procter is providing legal counsel to TA Associates. Mayer Brown is serving as legal counsel and Raymond James & Associates is acting as financial advisor to NorthStar.

© 2015 PEPD • Private Equity’s Leading News Magazine • 2-9-15

Centerbridge Acquires IPC Systems

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ipc nf1IPC Systems, a provider of network services and a portfolio company of Silver Lake Partners, has been acquired by Centerbridge Partners.  Silver Lake first invested in IPC Systems in August 2006.

IPC is a provider of network services and trading communication technology to the financial markets.  The company’s products support traders and participants at sell-side and buy-side financial institutions, inter-dealer brokers, liquidity venues, clearing and settlement firms, independent software vendors, corporate finance departments, financial information exchange providers and market data providers.  IPC’s global reach extends to more than 60 countries – including a network of 5,000 customer sites over 700 cities and an installed base of approximately 120,000 trading positions worldwide. The company has approximately 900 employees and is headquartered in Jersey City, NJ (www.ipc.com).

“IPC has a track record of innovation and success that has made it a valued strategic partner to the world’s most preeminent financial institutions,” said Jared Hendricks, Senior Managing Director at Centerbridge.  “The company is uniquely positioned to deliver tailored, state-of-the-art solutions to serve the complex needs of the financial services community.”

IPC was advised by Evercore and Goldman Sachs.  Centerbridge was advised by Barclays and Credit Suisse Securities.

Centerbridge Partners invests from $50 million to $300 million in US based leveraged buyouts and distressed securities. The firm has $25 billion of capital under management and is headquartered in New York with an additional office in London (www.centerbridge.com).

“Last year was one of IPC’s best years on record and we are expanding on that momentum,” said Mr. Neil Barua, Chief Executive Officer of IPC. “Our focus remains on delivering products and services that contribute to our customers’ success.  This unwavering commitment to our customers coupled with Centerbridge’s proven ability to drive long-term sustainable growth will further strengthen our global brand. We look forward to working together with our new owners.”

© 2015 PEPD • Private Equity’s Leading News Magazine • 2-9-15

Catterton Invests in Sweaty Betty

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sweaty beatty nf1Sweaty Betty, a women’s activewear brand, has received a growth investment from Catterton Partners. The founders of Sweaty Betty, Creative Director Tamara Hill-Norton and Chief Executive Officer Simon Hill-Norton, will continue to lead the company.

Sweaty Betty is a British retailer specializing in activewear for women. The company’s products include clothing and specialized equipment for yoga, running, dance, pilates, skiing, swimming and workout.  The brand has a growing sales presence in the United States via two retail boutiques, e-commerce and seasonal catalogs.  Sweaty Betty is headquartered in London (www.sweatybetty.com).

Jon Owsley nf1“Demand for women’s activewear in general, and for brands in the premium and ultra-premium segments in particular, is strong,” said Jon Owsley, a Partner at Catterton.  “Tamara, Simon and the entire Sweaty Betty team have created a true leader in the premium activewear category with a brand and differentiated product offering that is set apart for its cutting edge style, high quality and superior performance. We see a tremendous opportunity to build on these strengths and to extend Sweaty Betty’s reach in both new and existing markets. We are excited to partner with the Sweaty Betty team through this investment.”

Catterton Partners focuses exclusively on the consumer industry and invests in all major segments including food and beverage, retail and restaurants, consumer products and services, consumer health, and media and marketing services.  Catterton was founded in 1989 and has more than $4 billion in capital under management. The firm is located in Greenwich, CT (www.cpequity.com).

“We are thrilled to partner with Catterton to build globally on the strong enthusiasm that women have expressed for the Sweaty Betty brand since we opened our first boutique in 1998,” said Simon Hill-Norton. “Catterton has an unparalleled record of helping other retail and consumer companies, including health and wellness brands, to reach their goals. Catterton understands the consumer industry and importantly to us, they also share Sweaty Betty’s belief that fitness, fashion and lifestyle go hand-in-hand.”

© 2015 PEPD • Private Equity’s Leading News Magazine • 2-9-15

Pine Tree Acquires C&R Compliance

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c and r nf1Crossbridge Compliance, a portfolio company of Pine Tree Equity, has acquired C&R Compliance.  This is the first add-on acquisition completed by Crossbridge Compliance since being acquired by Pine Tree in November 2014.

C&R is a regional provider of safety and training services required to meet safety regulations in the manufacturing and pulp and paper industries. The company was founded in 2007 and is headquartered northwest of Atlanta in Rome, GA (www.crcompliance.com).

Crossbridge Compliance is a provider of safety and training services such as auditing, consulting, and inspection that are required to meet safety regulations in the oil and gas pipeline and railcar industries. The company is headquartered east of Dallas in Longview, TX (www.crossbridgecompliance.com).

Pine Tree Equity invests in companies with revenues of $10 million to $50 million and EBITDAs of $2 million to $6 million. Sectors of interest include business, consumer and financial services; consumer products; franchisors and franchisees; and niche manufacturing.  The firm is based in Miami (www.pinetreeequity.com).

Pine Tree intends to continue pursuing add-on acquisitions of competitive and complementary safety and training businesses.

C&R marks Pine Tree Equity’s 9th investment in the industrial services industry and 28th investment since the firm was founded in 2007.

© 2015 PEPD • Private Equity’s Leading News Magazine • 2-9-15

Pension Fund Assets Reach New Highs

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towers watson NF1Assets at US institutional pension funds increased 9% in 2014, to a record $22.1 trillion, according to Towers Watson’s annual Global Pension Assets Study.

Globally, institutional pension fund assets in the 16 major markets grew by over 6% during 2014 (compared to around 10% in 2013) to reach a new high of $36 trillion, according to the research. The growth is a continuation of a trend that started in 2009, when assets grew 18%, in sharp contrast to a 22% decline during 2008, when assets fell to around $20 trillion. Global pension fund assets have now grown at an average annual rate of 6% since 2004.

The Towers Watson study also shows that defined contribution (DC) assets grew rapidly for the 10-year period ending in 2014, with a compound annual growth rate (CAGR) of 7%, versus a rate of over 4% for defined benefit (DB) assets. As a result, DC plan assets have grown from 38% of all pension assets in 2004 to 47% in 2014 and are expected to overtake DB assets in the next few years. In the US, DC assets continued to climb steadily and now represent 58% of all assets, up from 52% in 2004 and 55% in 2009.

steve carlson nf1“The continuing shift to DC plans means they are becoming the world’s most prevalent retirement savings model,” said Steve Carlson, head of Towers Watson’s Americas Investment practice. “This shift brings a transfer of risk and new tension to the balance between ownership and control, which will test governments and pension industries around the world.”

According to the study, pension assets now amount to around 84% of the global gross domestic product (GDP), substantially higher than the 54% recorded in 2008. In the US, the ratio of pension assets to GDP increased from 95% in 2004 to 127% in 2014.

“While there has been a significant improvement in various pension balance sheets around the world since the financial crisis, many DB pension funds are still in very weak funded positions. However, in the US, pension plans are in a better position, given the contribution flexibility,” said Mr. Carlson.

According to the research, there is a clear sign of reduced home bias in equities, as the weight of domestic equities in pension portfolios fell, on average, from 65% in 1998 to 43% in 2014. During the past 10 years, US pension plans have maintained the highest bias to domestic equities (67% in 2014), having also increased domestic equity bias during the past three years. Canadian and Swiss funds remain the markets with the lowest allocation to domestic equities (33% and 34%, respectively, in 2014), while UK exposure to domestic equities has more than halved, to 36%, since 1998. The research shows Canadian and U.S. funds have retained a very strong home bias in fixed-income investment since the research began (98% and 91%, respectively, in 2014), while Australian and Swiss funds have reduced exposure to domestic bonds significantly since 1998 — down by 31% and 17%, respectively, during this period.

Allocations to alternative assets (especially real estate and, to a lesser extent, hedge funds, private equity and commodities) in the larger markets have grown from 5% to 25% since 1995, according to the research. In the past decade, most countries have increased their exposure to alternative assets, with Australia increasing them the most (from 10% to 26%), followed by the US (from 16% to 29%), Switzerland (from 16% to 28%), Canada (from 13% to 22%) and the UK (from 7% to 15%).

Towers Watson’s Investment business is focused on creating financial value for institutional investors through its expertise in risk assessment, strategic asset allocation, fiduciary management and investment manager selection. It has over 800 associates worldwide, assets under advisory of over $2.2 trillion and over $75 billion of assets under management.

© 2015 PEPD • Private Equity’s Leading News Magazine • 2-9-15

Grey Mountain Adds Two New Professionals

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grey mountain nf1Grey Mountain Partners has added two new professionals to its team with the hiring of Dan Allen as a Vice President, and John Beyer as an Associate.

Prior to joining the firm Mr. Allen served as the CFO of Bolttech Mannings, a current Grey Mountain Partners’ portfolio company. Before joining Bolttech Mannings, he held various financial positions at Eaton, General Electric, and Procter and Gamble. Mr. Allen began his career as an officer in the US Air Force, serving as a technology planning analyst.  Mr. Allen graduated from the United States Air Force Academy with a BS in Economics and has a Master’s degree in Economics from Ohio State.

john beyerPrior to joining Grey Mountain, Mr. Beyer was an Analyst in the Industrial Group at Robert W. Baird & Co. in Milwaukee, where he advised companies on M&A transactions, equity offerings and other financial advisory services. He has a BS in Commerce from the University of Virginia.

Grey Mountain Partners invests up to $75 million in control acquisitions of companies with enterprise values between $30 million and $150 million. Sectors of interest include aerospace & defense, building products & materials, business process outsourcing, diversified manufacturing, energy & power, financial services, food & beverage, healthcare services & technology, industrial services, packaging, professional services, specialty chemicals, technology, transportation & logistics, wholesale and distribution. Grey Mountain was founded in 2003 by Managing Partners Rob Wright and Jeff Kuo and is based in Boulder with an additional office in Minneapolis and Pittsburgh (www.greymountain.com).

© 2015 PEPD • Private Equity’s Leading News Magazine • 2-9-15

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