April 21, 2015
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Archives for April 21, 2015

TPG Acquires Cirque du Soleil

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cirque nf8Cirque du Soleil, a producer of high-quality live artistic entertainment, has signed an agreement under which TPG will acquire a majority stake in Cirque du Soleil.  Fosun, one of China’s leading investment groups, will acquire a minority stake in Cirque du Soleil.  TPG and Fosun intend to expand the performances of Cirque du Soleil into the Chinese market.

Cirque du Soleil (“Circus of the Sun”) is a Canadian entertainment company. The company is considered to be one of the largest theatrical producers in the world and will produce 18 international shows in 2015.  Annual revenues are estimated at US$800 million.  Cirque du Soleil was founded in 1984 by two former street performers, Guy Laliberté and Gilles Ste-Croix, and is headquartered in Montreal (www.cirquedusoleil.com).

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“We are excited about the opportunity to bring our global platform of resources and know-how to propel the growth of Cirque’s unique brand, content and capabilities around the world,” said David Trujillo, partner at TPG. “We are inspired by Guy Laliberté’s imagination and vision, and look forward to working with him and his talented team, as well as the vibrant Montréal creative community.”

TPG is a private investment firm founded in 1992 that makes investments throughout North America, Europe, Asia and Australia.  Sectors of interest include industrials, retail, consumer, financial services, travel and entertainment, technology, media and communications, and healthcare.  The firm has offices in San Francisco, Fort Worth, Austin, Dallas, Houston, New York, Beijing, Hong Kong, London, Luxembourg, Melbourne, Moscow, Mumbai, São Paulo, Shanghai, Singapore and Tokyo (www.tpg.com).

Fosun International, publicly traded on the Hong Kong stock exchange (00656.HK), is a Chinese conglomerate with international investments in healthcare, tourism, fashion firms and banks.  Fosun was founded in 1992 and is headquartered in Shanghai (www.fosun.com).

Guo Guangchang nf1“To date, Fosun has established a global prototype for platforms that capture lifestyle trends in China. Building on top of this model, we have an objective to become one of the global leaders in businesses driven by lifestyle needs, which are quickly taking root in China,” said Guo Guangchang, Chairman of Fosun.  “The performances of Cirque are very attractive and are a standard bearer for the quality content expected by global citizens. We have known Cirque and TPG’s team for quite some time so we respect their cultural heritage. We envisage deeper cooperation with Cirque and are excited to have Cirque as a major new growth platform within our lifestyle services and content portfolio.”

Caisse de dépôt et placement du Québec (www.lacaisse.com), a manager of public pension plans in the Canadian province of Quebec, will also acquire a minority interest in the company.  Québec businessman Mitch Garber, who has strong business ties to TPG, will also be part of the investor group.

Upon closing of the acquisition, Mr. Garber will become Chairman of Cirque du Soleil. In addition, Cirque du Soleil’s Founder, Guy Laliberté, will maintain an interest in the business and will continue to provide strategic and creative input to the company.  Daniel Lamarre will remain as Cirque’s President and CEO.

“Guy has built one of the most extraordinary companies in the world. I have worked with TPG for many years and know they are the perfect partners to take this business forward. Cirque is a great source of pride for all Québecers and we intend to continue to make them proud,” said Mr. Garber.

“After 30 years building the Cirque du Soleil brand, we have now found the right partners in TPG, Fosun and the Caisse to take Cirque du Soleil forward to the next stage in its evolution as a company founded on the conviction that the arts and business, together, can contribute to making a better world,” said Mr. Laliberté.

The acquisition of Cirque du Soleil by TPG, Fosun, Caisse de dépôt et placement du Québec, and Mr. Laliberté is expected to close in the third quarter of 2015.

Goldman, Sachs & Co. acted as exclusive financial advisor to Cirque du Soleil.

© 2015 PEPD • Private Equity’s Leading News Magazine • 4-21-15

Harvest Partners and Cressey Recap VetCor

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vetcor nf1VetCor Group Holdings, one of the largest operators of veterinary hospitals in the US, has completed a majority recapitalization led by Harvest Partners and Cressey & Company. Cressey & Company first invested in VetCor in February 2010 and maintains an equity ownership in the business.

VetCor owns and operates 137 veterinary hospitals across 19 states that provide general medical and surgical services for pets, as well as pharmacy needs and ancillary services such as boarding and grooming. The company has approximately 450 veterinarians and a total staff of 2,400.  VetCor was founded in 1997 and is headquartered south of Boston in Hingham, MA (www.vetcor.com).

jay wilkins nf1VetCor is led by CEO & President Dan Adams.  “Given VetCor’s success, Dan Adams and his partners at Cressey had their choice of private equity firms with whom to partner. We are both thrilled and honored that they chose Harvest for VetCor’s next chapter of growth,” said Jay Wilkins, Senior Managing Director at Harvest Partners.

Harvest Partners currently manages approximately $2 billion of equity and structured capital and is investing its sixth private equity fund.  Harvest targets investments in companies with $20 million to $75 million of EBITDA and total enterprise values of $100 million to $750 million.  Sectors of interest include industrial & energy services; manufacturing & distribution; consumer & business services; and healthcare services.  The firm was founded in 1981 and is based in New York with an additional office in Palo Alto (www.harvestpartners.com).

Ira Kleinman nf1“VetCor is one of the few scale platforms in the highly attractive and fragmented veterinary services space. We are excited to partner with Dan and Cressey to support the company’s consolidation strategy in this stable and growing market,” said Ira Kleinman, Senior Managing Director at Harvest Partners.

Cressey & Company’s generally seeks control-oriented investments in companies with enterprise values at the time of investment of between $50 million and $300 million. Sectors of interest include healthcare and information technology.  The firm has offices in Chicago and Nashville (www.cresseyco.com).

“We’ve enjoyed a terrific partnership with Dan and his team over the past five years, having built the business into a quality-focused platform in a consolidating space. Harvest provides great insight and expertise in multi-site businesses, and we are excited to partner with them to support the continued growth of VetCor,” said Merrick Axel, Partner at Cressey.

Jefferies acted as exclusive financial advisor to VetCor and the senior debt was arranged by Golub Capital.

© 2015 PEPD • Private Equity’s Leading News Magazine • 4-21-15

Kinsale Acquires Associated Aircraft Manufacturing

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AAMSI nf1Kinsale Capital Partners has completed the acquisition of a controlling equity stake in Associated Aircraft Manufacturing & Sales.

Associated Aircraft Manufacturing & Sales (AAMSI) provides aerospace manufacturing, distribution and repair and for military avionics and structural components.  AAMSI is a US Department of Defense Contractor and registered with the US Government’s Business Partner Network and Central Contractor Registration. The company was founded in 1953 and is headquartered in Fort Lauderdale (www.aamsi.com).

Kinsale made its investment in AAMSI in partnership with the company’s existing management team.  The transaction allows long-time AAMSI owners, Peter Beaulieu and Frank Seguin to transition to Board of Director roles with the company.

Rear Adm Mark Heinrich nf1As part of the transaction, Retired Rear Admiral Mark Heinrich, US Navy, has joined the company as President and CEO.  Admiral Heinrich has more than 30 years of experience in operations, logistics, and supply chain management.  Previously, he led large scale ERP system implementations and managed the Naval Supply Systems Command’s (NAVSUP) seven billion dollar operating budget.

Kinsale Capital Partners provides advisory and financing services to middle market companies.  Kinsale will also use its own capital and the capital of its equity partners to invest or acquire middle market companies, in partnership with management teams, in order to provide capital for growth, restructuring or ownership transition.  Kinsale is based in Chicago (www.kinsalecapitalpartners.com).

© 2015 PEPD • Private Equity’s Leading News Magazine • 4-21-15

CapStreet Acquires Creative Resource Group

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crg nf1The CapStreet Group has completed a majority recapitalization of Creative Resource Group, a provider of transportation and facility services.

Creative Resource Group provides facility maintenance, logistics, safety and transportation services to companies operating in the refining, chemical, pipeline and terminals, power, pulp and paper, and pharmaceutical sectors. The company was founded in 2005 by Bill Taylor (CEO) and his daughter Brandi Taylor and is based northeast of Houston in Dayton, TX (www.crg-us.net).

“We are delighted about our new partnership with CapStreet. CapStreet has a great reputation and a significant amount of experience in successfully growing companies like ours. We look forward to working with the CapStreet team and leveraging their expertise as we enter into our next phase of growth,” said Mr. Taylor.

This acquisition represents the second investment for CapStreet IV, the firm’s most recent fund, which has $340 million of committed capital.  CapStreet makes control investments in privately held, lower middle market companies that are headquartered in Texas and surrounding states. CapStreet targets industrial and diversified business service companies with annual EBITDA between $5 million and $20 million.  The firm was founded in 1990 and is headquartered in Houston (www.capstreet.com).

As part of this transaction, Brian Bourque has joined the company as Chief Operating Officer. Mr. Bourque has experience working with industrial service companies and was previously the CFO and Executive Vice President of Sprint Industrial Holdings, a former CapStreet portfolio company.

Paul De Lisi nf1“We are excited to partner with the Taylor family. Bill and Brandi have built a high quality business and we look forward to working with them to accelerate growth. We are also excited to have recruited Brian to the team. Brian is a highly experienced executive in the industrial space and we look forward to working with him again,” said Paul De Lisi, a partner at CapStreet.

Houston-based IVS Investment Banking (www.bicivs.com) served as financial adviser to Creative Resource Group and financing was provided by Houston-based Amegy Bank (www.amegybank.com).

© 2015 PEPD • Private Equity’s Leading News Magazine • 4-21-15

Boathouse Closes Fund II at $230 Million

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boathouse nf1Boathouse Capital has held a final close on Boathouse Capital II at $230 million.  This is Boathouse Capital’s second SBIC fund.

ken jones nf1“We are thankful to our returning investors who have supported us from the outset and to our new investors with whom we look forward to building long-term relationships,” said Ken Jones, Managing Partner at Boathouse Capital.

Boathouse Capital invests mezzanine debt and equity in lower middle market companies in partnership with management teams and private equity funds.  Boathouse will consider investments from $5 million to $25 million in either mezzanine debt or equity capital in companies with EBITDAs of $1.5 million or greater.

Boathouse Capital II has already closed on two new platform investments with the acquisitions of KBP Foods and Solomon Edwards.  In March 2015, KBP Foods was acquired by Boathouse Capital and Victory Park Capital in partnership with OFS Capital and KBP’s current management team. KBP Foods was a portfolio company of Boyne Capital Partners. KBP Foods owns and operates 220 branded restaurants under franchise agreements with KFC, Taco Bell, and Long John Silver’s. The company is based in Overland Park, KS (www.kbp-foods.com).  Solomon Edwards is a professional services firm that assists clients in defining, managing and driving strategic projects.  Solomon Edwards was acquired in February 2015 and is based near Philadelphia in Wayne, PA (www.solomonedwards.com).

Steve Dressel nf1In conjunction with the new fund, Boathouse has added three new team members. Ben Chang and Shivam Patel have been hired as Associates to support the investment team in executing on new transactions and to help assist in the management of portfolio companies.  Steve Dressel has been hired as a Business Development Associate and he will be responsible for sourcing new transactions and assisting in other areas of the investment process including portfolio company exits.

Boathouse Capital manages over $350 million in two separate funds and is based near Philadelphia in Wayne, PA (www.boathousecapital.com).

© 2015 PEPD • Private Equity’s Leading News Magazine • 4-21-15

Lexington Closes Largest Ever Secondary Fund

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lexington-nfSecondary acquisition fund manager Lexington Partners has held a final close of Lexington Capital Partners VIII, LP (LCP VIII) at its $10.1 billion hard cap.  According to Lexington, the new fund is the largest dedicated secondary fund ever raised.  The firm’s earlier fund, LCP VII, closed with $7.1 billion in commitments in 2011.

LCP VIII will acquire private equity and alternative assets through a range of negotiated secondary market transactions including portfolio acquisitions, balance sheet spin-outs, equity co-investments, private equity purchases, and fund recapitalizations.  LCP VIII also has the ability to invest in new private investment funds.

The new fund has more than 300 limited partners including major public pensions, corporate pensions, and sovereign wealth funds in the US, Canada, UK, Europe, Asia, Latin America, Australia, and the Middle East.  Insurance companies, endowments, foundations, family offices, and high net worth investors also subscribed, with existing investors contributing a majority of the fund’s capital.

brent nicklas nf1“We are grateful for the strong support of our existing and new investors who have chosen to commit significant capital to LCP VIII,” said Brent Nicklas, Managing Partner of Lexington.  “Our global investor base and the substantial capital they have entrusted to Lexington will enhance the fund’s secondary capabilities with global counterparties and sponsors.”

Lexington has already committed approximately 30% of LCP VIII’s capital, investing in six transactions with banks and financial institutions, five transactions with fiduciaries, one hedge fund transaction, and a fund restructuring.

According to Lexington Partners, secondary industry volume in 2014 was the highest on record with over $35 billion of completed transactions, a level that is expected to be surpassed in 2015 with projected volume exceeding $40 billion.  This higher volume is the results of regulatory-driven selling by banks and financial institutions, more active management of alternative investment allocations by fiduciaries, and general partner led fund restructurings.

“Today’s secondary market is increasingly characterized by transaction diversity, complexity, and scale.  Over a long period of time, Lexington has developed the proven execution experience, counterparty reputation, breadth of sponsor relationships, and strength of capital to provide differentiated and innovative solutions to investors seeking to rebalance their alternative investment portfolios,” said Mr. Nicklas.

Lexington Partners is primarily involved in providing liquidity to owners of private equity and other alternative investments and in making co-investments alongside private equity sponsors. Since 1990, Lexington has acquired over 2,400 secondary and co-investment interests through 550 transactions with a total value in excess of $35 billion, including $11 billion of syndications.  Lexington also invests in private investment funds during their initial formation and has committed to more than 280 new funds in the US, Europe, and the Asia-Pacific region.  The firm has offices in New York, Boston, Menlo Park, London, and Hong Kong (www.lexingtonpartners.com).

© 2015 PEPD • Private Equity’s Leading News Magazine • 4-21-15

Babson Backs Wingate’s Add-On

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babson nf4Babson Capital Management has provided subordinated debt and made an equity co-investment to support Dunn Paper’s acquisition of the Specialty Mills business of Clearwater Paper Corporation (NYSE: CLW). Dunn Paper is a portfolio company of Wingate Partners and was acquired in July 2010 from Meriturn Partners.

The add-on acquisition of the Specialty Mills business – which produces specialty napkins, tissues and food packaging paper from five paper mills – aligns with Dunn’s strategy of providing high value specialty paper for niche product applications.

Dunn Paper is a specialty paper manufacturer that produces an array of specialty waxed, coated, and uncoated machine glazed (MG) papers used in various food packaging and specialty label applications. The company is headquartered north of Detroit in Port Huron, MI (www.dunnpaper.com).

Bud Applebaum nf1“Wingate Partners is delighted to collaborate with Babson on this significant add-on investment by Dunn Paper,” said Bud Applebaum, partner at Wingate Partners. “Wingate views Babson’s deep expertise in the middle market and its partnership-oriented approach to investing as true differentiators, and we look forward to working with the Babson team on this investment as well as future opportunities.”

Babson Capital has $217 billion in assets under management and is a member of the MassMutual Financial Group. The firm has offices in Boston and Springfield, MA; New York, Chicago, Charlotte and Los Angeles, and nine other offices in Europe, Asia and Australia (www.BabsonCapital.com).

Mike Klofas nf1“Babson is excited to work with Wingate Partners on the acquisition of the Specialty Mills, which, when combined with Dunn Paper, creates a specialty paper business with unmatched products and capabilities,” said Mike Klofas, Managing Director and co-head of Babson’s US Private Finance Group. “We have a high degree of confidence in supporting the Dunn Paper management team, and we see tremendous upside in the growth opportunities with Dunn Paper’s existing customers as a result of their broader product offering.”

Wingate Partners makes control equity investments in manufacturing, distribution and service businesses, typically with revenues between $50 million and $250 million. The firm was founded in 1987 and is headquartered in Dallas (www.wingatepartners.com).

© 2015 PEPD • Private Equity’s Leading News Magazine • 4-21-15

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