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Archives for August 2015

Madison Dearborn Completes Buy of Patterson Medical

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patterson med nf1Madison Dearborn Partners has completed its acquisition of the medical business of Patterson Companies for approximately $715 million in cash.

Patterson Medical was founded in 1995 as Sammons Preston and was later renamed AbilityOne. The company was acquired by Patterson Companies in 2003.  Today, Patterson Medical is a global specialty distributor of rehabilitation supplies and equipment to acute care facilities, outpatient clinics, and long-term care facilities. The business has approximately 20,000 SKUs of rehabilitation supplies, equipment and assisted living products.

Patterson Medical also has a sports medicine division which operates under the Medco brand name and distributes more than 12,000 SKUs to athletic trainers in professional sports, high school and college teams and recreational sports organizations.  In fiscal 2015, Patterson Medical had total sales of $464 million and EBITDA of $67 million (EBITDA margin of 14.4%). Patterson Medical is headquartered in the Chicago suburb of Warrenville, IL (www.pattersonmedical.com).

The current Patterson Medical management team, including CEO Michael Orscheln will continue in their current positions.  Patterson Medical will retain its name for a transition period but will be rebranded by Madison Dearborn Partners.

tim sullivan nf3“Patterson Medical is a leader in its field and has strong competitive advantages and we are pleased to partner with the company’s exceptional management team,” said Tim Sullivan, a managing director at Madison Dearborn.  “Madison Dearborn has experience investing in health care distribution companies and corporate carve-outs, and we plan to utilize our resources and expertise to support Patterson Medical’s US and international growth.”

Madison Dearborn Partners has more than $18 billion of capital under management. Sectors of interest include health care; basic industries; business and government services; consumer; financial and transaction services; and telecom, media and technology services.  Madison Dearborn was founded in 1992 and is based in Chicago (www.mdcp.com).

Earlier this year, Patterson Companies (NASDAQ:PDCO) retained BofA Merrill Lynch to explore the sale of its medical business.  Patterson will use the proceeds from the sale to reduce the debt it incurred to fund its $1.1 billion acquisition in June 2015 of Animal Health International, a distributor of vaccines and pharmaceuticals, equipment and software used to treat the health needs of companion animals, equine, beef and dairy cattle, poultry and swine.  “The sale of the medical business accomplishes a key component of Patterson’s strategic transformation,” said Scott Anderson, Patterson’s CEO.  “We are now positioned to focus on developing our dental and animal health businesses.”

Madison Dearborn was advised by Barclays and Deutsche Bank and Kirkland & Ellis acted as legal advisor. Deutsche Bank, Barclays, BofA Merrill Lynch and Jefferies provided debt financing to support the acquisition.

BofA Merrill Lynch acted as financial advisor and Briggs and Morgan acted as legal advisor to Patterson Companies.

 © 2015 PEPD • Private Equity’s Leading News Magazine • 8-31-15

Carlyle Buys Novetta from Arlington

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novetta nf1Arlington Capital Partners has agreed to sell its portfolio company Novetta to The Carlyle Group.  Novetta was created through the March 2012 merger of data analytics company FGM with White Oak Technologies, a portfolio company of Arlington Capital that the firm had acquired in November 2010.

Novetta is a provider of software and analytic services that allow clients to analyze massive amounts of complex and disparate data sets to find areas of commonality or dependence.  Customers include companies that need to process huge amounts of data and government agencies operating in the intelligence sector.  Novetta – which means “10 to the 27th power” or a billion, billion, billion – is headquartered in McLean, VA, and has other nine additional offices around the country (www.novetta.com).  As part of this transaction, Peter LaMontagne, a federal executive with 23 years of national security and technology experience will join Novetta as the company’s new Chief Executive Officer.

Jeffrey Freed nf1During Arlington’s five year term of ownership, Novetta completed seven add-on acquisitions that expanded its intellectual property capabilities, built its service offerings and added new clients in the intelligence and defense sectors.  “Over the past five years, the focus on a growth-oriented investment strategy at Novetta has built value for all of the company’s stakeholders,” said Jeffrey Freed, Co-Founder and a Managing Partner at Arlington Capital.

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

Adam Palmer nf1“Novetta is an outstanding company and a clear leader in advanced analytics. We are excited to partner with Peter and his team to support Novetta’s mission and growth strategy by investing in the continued development of its people, capabilities and intellectual property as well as pursuing selective, technology-driven, complementary acquisitions,” said Adam Palmer, a Carlyle Managing Director and head of the firm’s aerospace, defense and government services team. Carlyle’s aerospace, defense and government services group has invested $4.5 billion of equity in more than 40 companies since 1987.

Equity financing for the acquisition will come from Carlyle Partners VI, a $13 billion buyout fund which had a final close in November 2013.  Jefferies and Société Générale have committed to provide debt financing for the transaction.

Morgan Stanley & Co. and Houlihan Lokey served as financial advisors and Sheppard, Mullin, Richter and Hampton served as legal counsel to Novetta and Arlington Capital Partners.  Jefferies served as financial advisor and Latham & Watkins served as legal advisor to Carlyle.

© 2015 PEPD • Private Equity’s Leading News Magazine • 8-31-15

Providence Exits World Triathlon Corporation

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ironman nf3Dalian Wanda Group – a large Chinese conglomerate – has reached an agreement to acquire 100% of the equity of World Triathlon Corporation, an operator of IRONMAN events, for $650 million from Providence Equity Partners.

The IRONMAN is a triathlon – swimming, cycling, and running – completed within a strict time limit.  In the US alone, over 480,000 people participate in triathlon events, with over 4,400 separate races held each year.  World Triathlon Corporation (WTC) is the world’s largest operator of IRONMAN events and the most well-known IRONMAN brand; as the owner of the sporting brand and the operator of the competition, WTC accounts for a 91% global market share of long-distance triathlon events.

WTC has organized, promoted and licensed triathlon events for 37 years, and owns five exclusive triathlon brands, operating at least 250 events every year around the world. Its flagship brands are IRONMAN (3.9km swim + 180km cycle + 42km run) and IRONMAN 70.3 (1.9km swim + 90km cycle + 21.1km run) and are the world’s largest competition participation platforms, holding more than 130 races with over 230,000 competitors.

IRONMAN is expected to generate $183 million in revenue in 2015 and has increased revenue at a CAGR of 21% over the past four years. WTC is led by its CEO Andrew Messick and is headquartered in Tampa (www.ironman.com).

Dalian Wanda Group is the world’s largest cinema chain operator, owning Wanda Cinemas, AMC Entertainment and the Hoyts Group.  The company operates in four industries—commercial property, luxury hotels, culture and tourism, and department stores. It was founded in Dalian, Liaoning Province, by Wang Jianlin in 1988 as a residential real estate company and is now headquartered in Beijing (www.wanda-group.com).

Davis noell nf2“We have thoroughly enjoyed our partnership with IRONMAN over the past seven years and are pleased with the company’s growth and operational excellence under Andrew Messick’s leadership,” said Davis Noell, Managing Director at Providence Equity Partners.  “We have great respect for Wanda Group and its leading global sports platform and believe IRONMAN is well positioned to continue its success with their support.”

Providence Equity Partners invests in the media, entertainment, communications and information industries and has approximately $40 billion of capital under management. The firm was founded in 1989 and is based in Providence with additional offices in New York, London, New Delhi, Hong Kong, and Singapore (www.provequity.com).

Allen & Company (www.alleninvestments.com) is the financial advisor to Providence Equity and WTC.

© 2015 PEPD • Private Equity’s Leading News Magazine • 8-26-15

Acuity Acquires Acme Finishing

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acme nf2Lower middle-market investor Acuity Capital Partners has acquired Acme Finishing Company, a Chicago-based powder coating company.

Acme Finishing Company is a provider of powder coating, liquid coating, and decorative powder coating to customers in the lighting, automotive, fencing, and medical industries.  Acme has been family-owned since its founding in1932 by William Walters. The company is headquartered in the Chicago suburb of Elk Grove Village (www.acmefinishing.com).

Acuity Capital Partners makes control investments in Midwest-based lower middle-market companies that have annual revenues of at least $5 million. Transaction values typically range from $5 million to $50 million.  Sectors of interest include low to mid-technology manufacturing; value-added distribution; and select service companies. The firm is headquartered in Chicago (www.acuitycapllc.com).

Corporate Finance Associates (www.cfaw.com) was the exclusive financial advisor to Acme Finishing Company.  The transaction was led by Bob Contaldo, Managing Partner.

© 2015 PEPD • Private Equity’s Leading News Magazine • 8-26-15

Century Park Acquires Marx & Moschner

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marx nf1Moss, Inc., a portfolio company of Century Park Capital Partners has acquired, Marx & Moschner GmbH, a maker of large scale textile prints used at tradeshows, marketing events, and in retail settings.

Marx & Moschner’s products include large scale textile prints, illuminated light tubes and cubes, LED light boxes, banner displays, rollups, flags and printed banner ads.  The company’s printing technologies allow for the printing of textiles up to 5 meters in width with no seams. Marx & Moschner also provides the appropriate frame for its printed products which are constructed with a variety of materials including aluminum.  The company is headquartered in Lennestadt, Germany (www.marx-moschner.de).

Moss is a provider of tensioned fabric-based visual communication products used in the exhibit, event, and retail interiors industries.  The company was acquired by Century Park in June 2008 and is headquartered near Chicago in Elk Grove Village with additional locations in Salt Lake City; Las Vegas; and Secaucus, NJ (www.mossinc.com).

Guy Zaczepinski nf1“Penetrating the European experiential marketing sector has been a key focus for our growth strategy at Moss. We have seen that customers in both our retail and exhibit end markets are increasingly seeking ‘one stop solutions’ for their branding needs,” said Guy Zaczepinski, Managing Partner of Century Park Capital Partners.  “We are absolutely delighted to have found in Marx & Moschner the ideal partner; they have the scale, experience and market depth to complement what Moss is already doing in the US. With this transaction, Moss is poised to rapidly grow its presence in Europe.”

Century Park Capital Partners invests from $10 million to 50 million in middle-market companies that have revenues of $20 million to $100 million and EBITDA of $4 million to $15 million.  Sectors of interest include chemicals, medical products and services, business services, industrials, and consumer products. The firm is based in Los Angeles (www.centuryparkcapital.com).

© 2015 PEPD • Private Equity’s Leading News Magazine • 8-26-15

Trinity Hunt Adds-On Fast with Stratos Buy

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stratos legal nf1Deposition Solutions, a provider of litigation support services and a portfolio company of Trinity Hunt Partners, has acquired Stratos Legal Records (SLR), the medical records retrieval services division of Stratos Legal.

According to Trinity Hunt, the combination of Deposition Solutions and SLR creates one of the largest medical records retrieval providers serving the legal industry. This is the first add-on acquisition completed by Trinity Hunt for Deposition Solutions since it acquired the company in February 2015.

pete stein nf5“As we began to execute our strategic growth plans for Deposition Solutions, we quickly identified Stratos Legal Records as an ideal add-on as the companies’ service offerings complement each other very well,” said Pete Stein, managing partner of Trinity Hunt. “Completing such a significant acquisition within the first six months of our investment gives us strong momentum toward achieving our collective growth objectives.”

The SLR management team will remain in place after the transaction as a division of Deposition Solutions. SLR is headquartered in Houston (www.stratoslegal.com).

Deposition Solutions offers a range of services including transcription reporting, legal video and records retrieval. The company’s services are marketed under the DepoTexas and America First brand names.  Deposition Solutions is headquartered in Houston with additional Texas offices in Dallas, Austin, San Antonio, Corpus Christi, Fort Worth, Lufkin and Tyler (www.depotexas.com).

Trinity Hunt invests in companies that have EBITDAs between $3 million and $15 million and have enterprise values between $10 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).

© 2015 PEPD • Private Equity’s Leading News Magazine • 8-26-15

CI Capital Completes KIK Exit

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kik nf5CI Capital Partners has completed the previously announced sale of its portfolio company, KIK Custom Products, a maker of household and personal care products, to Centerbridge Partners.

KIK Custom Products is a contract and private label manufacturer of consumer products in the laundry, household cleaners, personal care, spa and pool, and over-the-counter medicated and pharmaceutical categories.  KIK entered the pool care business in 2011 with the acquisition of US-based Chem-Lab Products. KIK is based north of Toronto in Concord, Ontario (www.kikcorp.com).

CI Capital Partners first invested in KIK in 2007 and during the term of ownership the company’s revenue doubled and was diversified as a result of several add-on acquisitions and organic growth. Today, the company is a leader in the development and marketing of pool and spa treatment products and is one of North America’s largest independent manufacturers of household and personal care products.

“Under our ownership, Jeff Nodland, CEO, and Ben Kaak, CFO, along with the entire KIK management team, worked tirelessly to transform KIK through strategic acquisitions and operational initiatives, creating a clear leader in the marketing and production of consumer packaged goods and pool and spa treatment products,” said Timothy Hall, Managing Director at CI Capital Partners.

CI Capital Partners invests from $25 million to $100 million in middle market companies in the following sectors: business services, consumer services, distribution, government services and defense, and light manufacturing. The firm was founded in 1993 and is based in New York (www.cicapllc.com).

Frederick Iseman nf5“Our partnership with the KIK management team resulted in a very successful investment for us, and we wish the KIK team and Centerbridge continued success,” said Frederick Iseman, Chairman and CEO of CI Capital Partners.

Financial advice was provided to KIK by Morgan Stanley & Co. and Rothschild. Centerbridge was advised by Barclays. Debt financing for the transaction was provided by Barclays and BMO Capital Markets.

“The completion of this transaction marks the conclusion of a tremendous partnership with CI Capital,” said Jeff Nodland, Chief Executive Officer of KIK. “CI Capital has supported us as we invested in the company’s organic growth, executed an M&A strategy and successfully expanded into new business lines.  We look forward to continuing the company’s growth trajectory with Centerbridge.”

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).

© 2015 PEPD • Private Equity’s Leading News Magazine • 8-26-15

Colonnade Advises Southfield on Vanguard Buy

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colonade nf1Investment bank Colonnade Advisors was the financial advisor to Southfield Capital on its recent acquisition of Vanguard Dealer Services, a vehicle service contract (VSC) administrator.

Vanguard is an agent and administrator of finance and insurance products and services to franchised automobile dealers.  Vanguard offers a portfolio of proprietary and third party auto extended warranty (vehicle service contracts) and ancillary products such as tire protection, key replacement, dent repair and pre-paid maintenance.  The company also offers other financial and insurance consulting services to dealers such as training, compensation plan development, reinsurance, incentive management, sales strategy, compliance review, and staffing.  Vanguard was founded in 1999 and is headquartered just west of New York City in Fairfield, NJ (www.vanguarddealerservices.com).

Colonnade Advisors provides investment banking and financial advisory services to public and privately held small and mid-sized companies. Services include mergers and acquisitions, divesture, institutional private placement of equity and debt, negotiation assistance, due diligence, restructuring, recapitalization, valuation, fairness opinions, and strategic advisory services. The firm was founded in 1999 and is headquartered in Chicago (www.coladv.com).

colonade nf6Colonnade’s managing directors Chris Gillock and Gina Cocking will be presenting on the topic of “Selling a VSC Company” at the 2015 Vehicle Protection Association Conference in Las Vegas on September 9th.  They will be joined by attorney Will Turner of Barack Ferrazzano Kirschbaum & Nagelberg and accountant Joe Kaczmarek of McGladrey.

Southfield Capital provides capital for majority recapitalizations and management-led buyouts of lower middle-market businesses. The firm makes control investments of $10 million to $40 million of equity in transactions with $20 million to $100 million of enterprise value. Typical target companies will have from $4 million to $12 million of EBITDA.  Sectors of interest include: business services; consumer products & services; distribution & fulfillment; energy; healthcare; media & entertainment; niche manufacturing; power & infrastructure; specialty finance; and specialty retail.  Southfield Capital was founded in 2005 as the successor company to the private investment firm Levison & Company and is headquartered in Greenwich, CT (www.southfieldcapital.com).

Senior financing for the Vanguard acquisition was provided by East West Bank (www.eastwestbank.com) and subordinated debt was provided by Fidus Investment Corporation (www.fdus.com).  Woodbridge International (www.woodbridgegrp.com) was the financial advisor to Vanguard and its shareholders.

© 2015 PEPD • Private Equity’s Leading News Magazine • 8-26-15

Centerbridge Invests in Heartland, Buys Splenda

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heartland nf3Centerbridge Partners has made an investment in Heartland Food Products Group to finance the acquisition of the Splenda low calorie sweetener brand from McNeil Nutritionals, a subsidiary of Johnson & Johnson.

Heartland Food Products Group is a producer of low calorie sweetener products, creamers, beverage concentrates, coffee, and nutritional drinks. Heartland produces and markets both store brand and branded offerings in a variety of versions, flavors, and packaging formats. The company is headquartered near Indianapolis in Carmel, IN (www.heartlandfpg.com).

“Splenda is the most iconic low calorie sweetener brand in the world and fits well within our strategy to offer the very best tasting products to sweeten foods and beverages without adding calories,” said Ted Gelov, Heartland’s Chairman & CEO.

Jason Mozingo nf2According to reports, Centerbridge was instrumental in bringing the acquisition to completion. “We are excited to partner with Heartland through the company’s next phase of growth and development as they integrate and grow the Splenda® brand,” said Jason Mozingo, Senior Managing Director at Centerbridge Partners.

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).

© 2015 PEPD • Private Equity’s Leading News Magazine • 8-26-15

Audax and Moelis Sell Final Piece of Quest

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quest cp nf3Audax Private Equity and Moelis Capital Partners have completed the sale of Quest Construction Products, the only remaining division of Quest Specialty Chemicals, to Building Materials Corporation of America.

In June 2015, Quest Specialty Chemicals sold the Quest Automotive Products and Quest Industrial Products businesses to Valspar Corporation.  With the sale of these two businesses, Quest – and in turn Audax and Moelis – retained ownership of the Quest Construction Products (QCP) business.  With the sale of QCP, Audax and Moelis have fully exited their investments in Quest Specialty Chemicals.

QCP manufactures and markets roofing systems, reflective coatings for buildings, and pavement coatings for the construction market.  Brand names include Hydro-Stop, United, and StreetBond.  During their ownership term, Audax and Moelis completed two add-on acquisitions which tucked in a decorative asphalt coatings business and expanded QCP’s geographic presence into Europe.  QCP is headquartered in Charleston, SC (www.quest-cp.com).

Geoffrey Rehnert nf1“We congratulate CEO Doug Mattscheck and his team on successfully building QCP through two acquisitions, and expanding into new end markets and geographies. We have enjoyed partnering with Doug and Moelis Capital to execute our acquisition strategy,” said Geoffrey Rehnert, Co-CEO of Audax Group.

The Audax Group makes control investments of $10 million to $100 million in middle market companies with transaction values of $25 million to $500 million. Sectors of interest include industrial manufacturing; energy; outsourced industrial services; consumer products; healthcare devices and services; non-asset based logistics; technology; aerospace & defense; business services; and direct marketing.  Audax has over $6 billion in assets under management in its private equity, mezzanine, and senior debt businesses. The firm was founded in 1999 and has offices in Boston, New York, and Menlo Park (www.audaxgroup.com).

Moelis Capital Partners is a middle market private equity firm founded in 2007 in connection with the formation of Moelis & Company, an independent investment bank. Moelis Capital Partners manages $870 million of committed private equity capital and specializes in traditional private equity investments in the middle market. The firm is based in New York (www.moeliscapital.com).

“Both Audax and Moelis have been great partners and resources in helping our team transform Quest into three strategic platforms through four acquisitions and investments in accelerating growth,” said Mr. Mattscheck.

Building Materials Corporation of America, the buyer of QCP, is privately held and does business under the name GAF Materials Corporation. The company, headquartered in Parsippany, NJ, is a North American manufacturer and marketer of commercial and residential roofing products (www.gaf.com).

Moelis & Company and Piper Jaffray & Co. advised Quest. Kirkland & Ellis and Fredrikson & Byron served as legal counsel to Quest.

© 2015 PEPD • Private Equity’s Leading News Magazine • 8-26-15

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