Archives for April 14, 2015

Trinity Hunt Acquires America’s Auto Auction

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Trinity Hunt Partners has acquired a majority stake in America’s Auto Auction (AAA), a wholesale automobile auction company.

America’s Auto Auction specializes in conducting wholesale auctions of automobiles on behalf of new car dealers, fleet lease businesses, repossession companies, and used car dealers.  The company was founded in 2005 and is headquartered in Dallas with 11 auction centers throughout the eastern half of the US (www.americasautoauction.com).

CEO Ben Lange and CFO Dustin Miller will remain as shareholders of AAA and will continue to run the business.  “We are excited to partner with the exceptional management team at America’s Auto Auction,” said Dan Dross, managing partner of Trinity Hunt. “Through its rapid growth over the last 10 years, AAA has become one of the largest providers of automobile remarketing services in the country. We look forward to working with Ben and Dustin to help the company continue to grow and enhance the range of services provided to buyers and sellers of vehicles.”

As part of this transaction, Trinity Hunt also acquired a minority stake in Auction Credit Enterprises, a floor plan finance company that was founded by AAA’s management team in 2006 to provide short-term, asset-backed inventory financing to dealers who buy auction vehicles.

Trinity Hunt invests in companies that have EBITDAs between $3 million and $15 million and have enterprise values between $15 million and $150 million. The firm considers investment opportunities across a range of industries but has a specific interest in industrial products and services, business services and healthcare services. Trinity Hunt is based in Dallas (www.trinityhunt.com).

“The Trinity Hunt team will serve as a key partner in our continued growth,” said Mr. Lange.  “Their significant resources will enable us to expand our reach and capabilities. We especially appreciate Trinity Hunt’s partnering approach to investing, where they assist the company strategically but leave the day-to-day decision making up to our management team and our general managers at the different auction locations.”

© 2015 PEPD • Private Equity’s Leading News Magazine • 4-14-15

H.I.G. Sells Dent Wizard to Gridiron Capital

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H.I.G. Capital has completed the sale of Dent Wizard International to Gridiron Capital.  In November 2010, H.I.G. acquired Dent Wizard through a carve-out from Manheim Auctions, a wholly owned subsidiary of Cox Enterprises, and recruited a new management team to run the business.

Dent Wizard offers a range of reconditioning services for vehicles, such as removing dents, dings, creases and hail damage from vehicles without affecting the original factory finish. Other services include bumper, scratch, wheel, leather and vinyl, and carpet and fabric repair services.  Dent Wizard provides its services to car dealerships, automobile manufacturers, auto auctions, body shops and collision centers, rental car agencies, insurance companies, fleet owners and operators and individual vehicle owners. Dent Wizard was founded in 1983 and is headquartered in the St. Louis suburb of Bridgeton (www.dentwizard.com).

“Dent Wizard is an exceptional company with a bright future. We are proud of the work we did in partnership with the very talented management team to carve the business out of the corporate parent, reverse the negative growth trajectory at the time of our acquisition, and substantially increase EBITDA over the course of our four year ownership. This investment will provide an attractive return for H.I.G. and its investors, which is a testament to Dent Wizard’s successful transformation,” said H.I.G. Capital Managing Director Fraser Preston.

H.I.G. Capital specializes in providing capital to small and medium-sized companies and invests in management-led buyouts and recapitalizations of manufacturing or service businesses. H.I.G. Capital has more than $17 billion of capital under management. The firm was founded in 1993 and is based in Miami with additional offices in Atlanta, Boston, Chicago, Dallas, New York, San Francisco, London, Hamburg, Madrid, Milan, Paris, and Rio de Janeiro (www.higcapital.com).

“H.I.G. has been a highly effective partner that provided invaluable operational and strategic guidance. H.I.G.’s support for the company’s growth initiatives put the business on a high growth trajectory that we feel confident will allow us to continue to succeed,” said CEO of Dent Wizard Terry Koebbe.

Gridiron Capital, the buyer of Dent Wizard, invests in manufacturing, service and specialty consumer companies that have EBITDAs from $5 million to $30 million and that are located in the United States and Canada. The firm is based in New Canaan, CT (www.gridironcapital.com).

© 2015 PEPD • Private Equity’s Leading News Magazine • 4-14-15

Halyard Acquires Data Research Businesses

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Halyard Capital has acquired Harte Hanks Market Intelligence and The Aberdeen Group from Harte Hanks, Inc. The two acquired businesses will be branded together as The Aberdeen Group.

Harte Hanks Market Intelligence gathers, measures, and assesses data that is used by companies active in the technology industry to improve marketing and sales (www.hartehanks.com).  The Aberdeen Group provides research and content marketing services that are used by business professionals to improve marketing related decision-making and business strategy (www.aberdeen.com). The combined company will have operations in Boston, San Diego, London, Paris and Madrid (www.aberdeenservices.com).

Dr. Charles Stryker, Chairman of VDC (www.venturedc.com), an advisory firm to the information services industry, will invest alongside Halyard and will serve on the board of directors of the new company. Gary Skidmore, the former President of Harte Hanks, will also invest alongside Halyard and will become Chief Executive Officer of the company.

“We’re confident that with our added support and investment, the combined entity will drive significant additional value for both current and future customers,” said Jonathan Barnes, Partner of Halyard Capital.  “We are pleased to be partnering with a seasoned leader in Gary Skidmore and with Charlie Stryker, a talented executive with whom we have partnered successfully in the past. We look forward to building upon the impressive accomplishments of these two organizations and to accelerating their growth together.”

Halyard specializes in middle-market leveraged buyouts and growth equity investments in technology-enabled information, data analytics, communications and business services companies that cater to the healthcare, education, marketing services, human capital management and media sectors.  The firm has over $600 million of capital under management and is based in New York (www.halyard.com).

“I am thrilled to be teaming up with Halyard Capital and Charlie Stryker for this exciting opportunity. Both Market Intelligence and Aberdeen are uniquely positioned, creating a fantastic opportunity to transform the vibrant technology data and content marketing space with a combined offering,” said Mr. Skidmore.  “Our platform will provide marketing and sales professionals with proprietary intelligence on who their ideal audiences are, what they are interested in now, and how to connect with them. And our integrated content marketing capability will allow companies to maximize this audience intelligence with improved content and storytelling tools.”

© 2015 PEPD • Private Equity’s Leading News Magazine • 4-14-15

Norwest Raises $2.4 Billion in New Equity and Mezzanine

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Norwest Equity Partners (NEP) has formed Norwest Equity Partners X, LP (NEP X), a new $1.6 billion fund and Norwest Mezzanine Partners IV, LP (NMP IV), a new $800 million fund formed by NEP’s affiliated mezzanine investment firm, Norwest Mezzanine Partners (NMP).

“It would be an understatement to say that this is an exciting time for our firm,” said Tim DeVries, NEP Managing General Partner.  “In addition to raising $2.4 billion of new capital, we are also celebrating our firm’s 54th anniversary and the long and distinguished history we’ve built over the years. NEP X and NMP IV are tremendous new opportunities and position us for great investments in the future.”

NEP invests $50 million to $200 million per transaction across a variety of sectors, including agriculture; applied technology; consumer; distribution; diversified industrials; energy; healthcare; and technology and  business services.  NMP makes junior capital investments of $20 million to $75 million to support private equity-sponsored transactions in sectors similar to NEP.

In addition to the capital raise, Norwest has made a number of recent personnel changes.

  • Brian Allingham has been promoted from Principal to Administrative Partner and will be primarily responsible for all operational, administrative, and compliance responsibilities for both buyout and mezzanine funds. Mr. Allingham will continue to source NEP investment opportunities and work with portfolio company management teams to develop and execute growth and operational improvement plans.
  • Jack Dempsey, a Senior Advisor Consultant at NEP since 2011, has been named Senior Vice President of Strategy and will continue to work directly with the firm’s portfolio company management teams to develop and execute strategies to grow revenues and EBITDA.
  • Sean Stevens has joined NMP as its newest investment Partner and is tasked to broaden NMP’s relationships with private equity sponsors and grow its portfolio of investments. Prior to NMP, Mr. Stevens worked at KKR, KeyBanc Capital Markets, and Bank of America Merrill Lynch.

Norwest Equity Partners and Norwest Mezzanine Partners are headquartered in Minneapolis (www.nep.com).

© 2015 PEPD • Private Equity’s Leading News Magazine • 4-14-15

Sterling Launches Education Opportunity Fund

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Sterling Partners has formed a new $200 million Education Opportunity Fund, its first-ever sector-focused fund, in partnership with USA Funds, a nonprofit organization that is active in promoting postsecondary-education.

The Education Opportunity Fund will be led by Sterling co-founder and Senior Managing Director Chris Hoehn-Saric and Managing Directors Shoshana Vernick and Jason Rosenberg.  The fund will primarily invests in companies that serve the higher education market and that are developing or marketing technology related services.  However, in addition to higher education, the fund will also consider investments in other areas of the student and adult learner lifecycle.

USA Funds is a nonprofit corporation that works to enhance postsecondary-education preparedness, access and success by linking colleges, universities, private lenders, students and parents in order to promote financial access to higher education.  USA Funds is the nation’s largest guarantor of loans made under the Federal Family Education Loan Program, the largest federal source of financial aid for higher education. The organization was founded in 1960 and during its 55-year history has provided support to more than 22 million students and parents to pursue higher education. USA Funds is led by William Hansen, President and CEO, and is headquartered in Indianapolis (www.usafunds.org).

Sterling Partners focuses on investing growth capital in small and mid-market companies in industries with positive, long-term trends, including education, healthcare, and business services. Sterling manages over $5 billion in institutional capital. The firm was founded in 1983 and has offices in Chicago, Baltimore, and Miami (www.sterlingpartners.com).

“We have always been passionate about supporting all aspects of the education sector. Our goal is to improve the quality of learning, help students achieve great academic and workforce outcomes, and support universities in delivering a quality student experience,” said Mr. Hoehn-Saric. “Our partnership with USA Funds and our closely aligned philosophies will allow us to continue to pursue private sector investment opportunities of impact.”

© 2015 PEPD • Private Equity’s Leading News Magazine • 4-14-15

WCAS Partners Up to Launch US Acute Care

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Welsh, Carson, Anderson & Stowe and Emergency Medicine Physicians have partnered to launch US Acute Care Solutions (USACS).  USACS is tasked in building a national provider of emergency medicine and hospitalist services.  EMP’s Medical Group and practice management operations will become the operational foundation for USACS.

Historically, according to WCAS, independent emergency medicine groups had only two strategic alternatives:  sell their practice or face a challenging healthcare environment alone. USACS will offer practices and hospital systems a third option, which is to partner with a company led by physicians but with the resources, business support and capital of a substantial enterprise.

“The creation of US Acute Care Solutions puts physician ownership front and center in a unique partnership with strong operational capabilities and an experienced capital partner in WCAS,” said Dominic Bagnoli, MD, chief executive officer, EMP and USACS. “WCAS has a track record of partnering with physicians and major integrated delivery systems to build market leaders, like they’ve done with US Anesthesia Partners, United Surgical Partners, US Oncology and many others.”

EMP is one of the largest physician-owned emergency medicine practices in the country, with more than 800 doctors and 300 practice providers. EMP provides emergency care to over 2.7 million patients each year at 64 hospitals in 15 states, and is aligned with hospital systems across the country. EMP was founded in 1992 and is headquartered in Canton, OH (www.emp.com).

“EMP really fits all of our criteria for a partner,” said Brian Regan, General Partner, Welsh, Carson, Anderson & Stowe. “Their providers consistently deliver great care in emergency departments across the country, and their doctors are highly engaged as partners and owners. They’re innovators and have reinvested in their profession and their business.

WCAS is focused exclusively on investments in business, information and healthcare services. Since its founding in 1979, WCAS has organized 16 limited partnerships with total capital of over $21 billion. The firm is based in New York (www.welshcarson.com).

The partnership agreement between EMP and WCAS, which was approved by EMP’s Board of Directors and shareholders, is expected to close in second quarter of this year.

Ulmer & Berne is serving as legal counsel to EMP. Ropes & Gray and Alston & Bird are serving as legal counsel to WCAS.

© 2015 PEPD • Private Equity’s Leading News Magazine • 4-14-15