Archives for April 23, 2015

Cortec Group Acquires Urnex

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Cortec Group has acquired Urnex Brands, a maker of coffee machine cleaning products that are used in commercial and household applications.

Urnex manufactures a portfolio of coffee machine cleaning, descaling and sanitizing products in a variety of forms – such as liquid, tablet, or powder – which are sold under the Urnex, Puro, and Full Circle brand names.  Customers include coffee chains, coffee roasters, foodservice providers, machine manufacturers, and retailers.  Founded in 1936, Urnex has a manufacturing facility and headquarters located west of White Plains in Elmsford, NY (www.urnex.com).

Cortec Group believes that Urnex is the market leader in the coffee machine cleaning products industry.  “The company’s success is directly attributable to the Urnex brand and its reputation for quality, efficacy and value among a broad range of commercial and household consumers”, said David Schnadig, a Managing Partner at Cortec.

Urnex is led by its President and CEO, Joshua Dick, who will continue in his current role and retain a significant ownership interest in Urnex.  “We were seeking a partner who would help drive Urnex’s expansion plans and support the company in its next phase of growth,” said Mr. Dick.  “Cortec’s relevant experience and track record of successfully investing in entrepreneur-led, high-growth businesses, as well as deep specialty consumer products experience was extremely important to me.”

Cortec Group invests in middle-market distribution, healthcare, consumer, and specialty products and service businesses with enterprise values from $40 million to $300 million. Cortec currently manages over $1 billion in its two active funds. The firm was founded in 1984 and is based in New York (www.cortecgroup.com).

“We are gratified that Josh chose to work with Cortec to support Urnex’s near and longer-term growth objectives,” said Mike Najjar, a Managing Partner at Cortec. “We are thrilled to be partnering with a great team and look forward to building on the company’s outstanding track record of success.”

Cortec Group made its investment in Urnex Brands through it its fifth investment fund, Cortec Group Fund V, LP.  The Urnex acquisition represents the fund’s seventh platform investment.

Robert W. Baird & Co. served as the exclusive financial advisor to Urnex.

© 2015 PEPD • Private Equity’s Leading News Magazine • 4-23-15

Sycamore Sells Jones New York to Leonard Green

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Sycamore Partners has sold Jones New York – one of many fashion brands it acquired in a December 2013 transaction with The Jones Group – to Authentic Brands Group (ABG), a portfolio company of Leonard Green & Partners.  In January 2015, Sycamore Partners announced that it was examining strategic alternatives for the Jones New York brand.

Jones New York is a multi-channel wholesaler and retailer of women’s sportswear. The brand was founded in 1975 and there are approximately 80 Jones New York stores in the US. The brand has close to$1 billion in retail sales in the US as well as international markets including Canada, Europe, the Middle East and Latin America (www.jny.com).

“Jones New York has a long-standing position as an iconic American brand through best-in-class licensing and retail partners,” said Nick Woodhouse, President of ABG. “We see great opportunity for this powerhouse brand and are implementing a strategy that is fueled by partnerships, innovative design, and distribution.  Jones has a deep-rooted American heritage that we are excited to leverage on a global scale.”

Sycamore Partners acquired Jones New York as part of the acquisition of The Jones Group in December 2013.  At that time the company’s brands and licensing agreements included: Jones New York, Nine West, Anne Klein, Kurt Geiger, Rachel Roy, Robert Rodriguez, Robbi & Nikki, and Stuart Weitzman, and many others.

Authentic Brands Group is an intellectual property corporation formed by Leonard Green & Partners in June 2010 to acquire, manage and build value in prominent consumer brands.  Specific areas of interest include fashion, sports and lifestyle, celebrity, media and entertainment.  ABG’s brands have total annual retail sales of approximately $4.5 billion. The company is headquartered in New York with offices in Toronto and Los Angeles (www.authenticbrandsgroup.com).

“We are honored to welcome Jones New York to ABG’s distinguished Women’s portfolio,” said Jamie Salter, Chairman and CEO of ABG.  “With a 40 year history of iconic and timeless design, Jones New York embodies American style. Our vision fuses ABG’s passion for brand building with a 21st century approach that will redefine this enduring classic.”

Leonard Green & Partners invests in middle-market companies with market-leading franchises and defensible competitive positions, attractive growth prospects and proven management teams.  Sectors of interest include retail, distribution, healthcare, aerospace/defense, and consumer/business services. The firm was founded in 1989 and manages approximately $15 billion of equity capital. Leonard Green & Partners is located in Los Angeles (www.leonardgreen.com).

© 2015 PEPD • Private Equity’s Leading News Magazine • 4-23-15

Goldman: Insurers to Up Private Equity and Middle Market Lending Allocations

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Goldman Sachs Asset Management’s (GSAM) latest insurance survey, “Too Much Capital, Too Little Return,” reveals that while insurers believe the industry is well capitalized, finding attractive investments is challenging in an investment environment characterized by negative yields, tight spreads, and high equity prices.

In response, according to the survey, insurers will increase allocations to less liquid, private assets. They intend to increase allocations to commercial mortgage loans, infrastructure debt, private equity and middle market loans. To fund these investments, insurers will decrease allocations to highly liquid assets such as cash and short-term instruments and government and agency debt.

“Insurers are concentrating on finding new investment opportunities which are sparse because yields still remain at low levels, and insurers are not anticipating a meaningful increase in rates this year,” said Michael Siegel, GSAM’s Global Head of Insurance Asset Management. “Nonetheless, one-third of insurers globally intend to increase overall portfolio risk. Insurers believe equity asset classes will outperform credit assets and they are looking to increase allocations to less liquid, private asset classes.”

Insurers predict that the equity asset classes will outperform credit asset classes and they anticipate that the highest returning asset classes will be private equity, US equities, and European equities this year.  “Insurers believe equity asset classes will outperform credit assets and they are looking to increase allocations to less liquid, private asset classes,” said Mr. Siegel.

GSAM Insurance Asset Management Survey partnered with KRC Research, an independent third party research firm, to conduct the 2015 survey from February 3 to 25, 2015. The global online survey received 267 responses, including 208 CIOs, 48 CFOs and 11 individuals who serve as both CIO and CFO. The respondent base included life, property & casualty, multi-line, reinsurance, and health insurers. In total, respondents had over $6 trillion in global balance sheet assets.

Goldman Sachs Asset Management is the asset management arm of The Goldman Sachs Group (NYSE: GS) and had $1.1 trillion in assets under supervision as of March 31, 2015.

To receive a copy of “Too Much Capital, Too Little Return” please send an email to: [email protected].

© 2015 PEPD • Private Equity’s Leading News Magazine • 4-23-15