Archives for August 11, 2015

Riverside  Buys in to ABRY’s Dental Platform

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The Riverside Company has made a minority investment in North American Dental Group, a provider of dental services and a portfolio company of ABRY Partners.  ABRY first invested in North American Dental Group in May 2012 when it operated as Refresh Dental Holdings and the firm remains the majority owner of the company.

North American Dental Group (NADG) provides its dental services through a network of 70 clinics in Indiana, Michigan, Ohio and Pennsylvania.  The group provides back office services to its affiliated dentists including insurance processing, marketing, information technology, and human resources.  The company was founded in 2010 and is headquartered in New Castle, PA (www.nadentalgroup.com).

NADG has doubled in size since September 2014 and continues to grow with plans to be at 125 practices at the end of 2015.  These practices are both branded and non-branded.  Brand names include Refresh Dental, Corner Dental, Dental Express, Precision, and Dental Care.  NADG has been an Inc. 500 company for the last two years improving its ranking from 441 in 2013 to 337 in 2014.

Riverside will work with ABRY and NADG’s management team to help the company continue to grow through add-acquisitions of additional dental practices.  Other growth may come from new clinic launches and service expansions at existing locations.

“NADG is an exemplary dental service organization that has made a true commitment to quality of care,” said Riverside Partner Hal Greenberg. “The dental practice management industry continues to grow rapidly as both dentists and patients see the inherent value and convenience of the model, and we are excited to partner with a true leader in the space.”  Working with Mr. Greenberg on the transaction for Riverside were Principal Jeffrey Gordon and Vice President Jay Reynolds.

The Riverside Company is a global private equity firm focused on investing in and acquiring growing businesses valued at up to $300 million. Since its founding in 1988, Riverside has invested in more than 390 transactions.  Riverside is headquartered in New York with additional offices in Atlanta, Chicago, Cleveland, Dallas, Los Angeles, San Francisco, and London (www.riversidecompany.com).

“We are excited to partner with Riverside in this investment,” said ABRY Partner John Hunt. “We have had a great, longstanding relationship with the Riverside team that made this investment and view them as a value-added partner.”

ABRY Partners invests in the media, communications, and business and information sectors. The firm is currently managing over $4.3 billion of total capital and investing out of a $1.9 billion private equity fund, $950 million senior equity fund and a $1.5 billion senior debt fund. ABRY was founded in 1989 and is headquartered in Boston (www.abry.com).

Capital Source led the senior credit facility financing for this transaction.  KeyBanc Capital Markets acted as advisor to NADG.

© 2015 PEPD • Private Equity’s Leading News Magazine • 8-11-15

Crestview Partners Exits Stackpole International

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Johnson Electric has entered into an agreement to acquire Stackpole International, a portfolio company of Crestview Partners, at an enterprise valuation of C$800 Million (US$608 Million).  Crestview Partners acquired Stackpole in a corporate carve-out from Gates Corporation in 2011.

Stackpole International is a supplier of transmission and engine oil pumps and powder metal components to automotive original equipment manufacturers and Tier 1 suppliers. The company has more than 2,000 employees and operates nine manufacturing facilities located in North America, Europe and Asia. Stackpole was founded in 1906 by H.C. Stackpole and US Representative (Pennsylvania) James Hall to manufacture dry battery cells for Henry Ford.  The company is headquartered southwest of Toronto in Ancaster, ON (www.stackpole.com).

Stackpole’s consolidated revenues for the year ended December 31, 2014 were C$487 million and 2014 EBITDA was C$82 million. This results in an enterprise valuation multiple of just under 10x.

Johnson Electric is a manufacturer of electric motors and motion subsystems. Products include brushless, DC, AC, stepper, piezo, and gear motors; and solenoids, starters, pumps, blowers, valves, gearboxes; and automotive actuators.  The company also offers automotive switches and subsystems, micro switches, manually operated switches, panel mounted switches, and energy saving automatic shut off switches.  Johnson Electric’s products are used in a range of industries including automotive, building automation and security, defense and aerospace, food and beverage, HVAC, industrial equipment and medical devices.  Annual revenues for Johnson Electric are approximately US$2 billion.  The company was founded in 1959 and is headquartered in Shatin, Hong Kong (www.johnsonelectric.com).

“We identified pumps and highly-engineered components as strategic priorities for Johnson Electric to strengthen our position as a supplier to key engine and transmission applications that contribute to improved fuel economy and reduced emissions,” said Dr. Patrick Wang, Johnson Electric’s Chairman and Chief Executive Officer.  “Acquiring Stackpole’s oil pump technology and powder metal expertise is an excellent fit that will enable us to provide integrated motorized pump solutions to customers in a rapidly growing market segment within the automotive industry. In addition, the acquisition will significantly increase our exposure to the North American automotive market which is presently experiencing strong demand.”

Crestview Partners invests from $100 million to $250 million in companies with enterprise values up to $3 billion. Sectors of specific interest include energy, financial services, healthcare, industrials and media.  Crestview, founded in 2004 and headquartered in New York, manages funds with over $7 billion of aggregate capital commitments (www.crestview.com).

Johnson Electric will finance the acquisition with a combination of its current cash balances and proceeds from existing revolving credit facilities. Perella Weinberg was the sole financial adviser to Johnson Electric.

© 2015 PEPD • Private Equity’s Leading News Magazine • 8-11-15

The Carlyle Group Acquires Veritas

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The Carlyle Group has entered into an agreement to acquire the information management business of Symantec (DBA Veritas) for $8 billion. Co-investing in this transaction with The Carlyle Group is GIC, Singapore’s sovereign wealth fund.  Symantec acquired Veritas in December 2004 for $13.5 billion.

Veritas provides a range of products that include backup and recovery software and appliances, storage management, clustering, disaster recovery, archiving and eDiscovery services.  The Veritas business generated $2.5 billion in revenue for Symantec in fiscal year 2014.

Upon closing of the transaction – the expected closing date is January 1, 2016 – Carlyle will appoint Bill Coleman as the CEO of Veritas and Bill Krause as its Chairman.  Mr. Coleman is currently a partner at Alsop Louie Partners, a venture capital firm. He has been the founder, chairman of the board and chief executive officer of various high profile corporations, most notably BEA Systems.  He has been a director at Symantec Corporation since 2003.  Mr. Krauss is a Carlyle operating executive specializing in technology and business services investments.

“Veritas is a market innovator with global scale, an iconic brand, and significant growth potential. Bill Coleman is a proven leader whose strategic vision and strong execution skills will leverage Veritas’ new-found position as a private, stand-alone company to grow the firm and provide customers an integrated information management solution,” said Carlyle Managing Director Patrick McCarter.  “Our significant experience investing in software businesses, as well as our extensive experience with carve-out transactions, positions us well to support Bill and the existing management team in creating value at Veritas.”

The Carlyle Group invests in buyouts, growth capital, real estate and leveraged finance in Africa, Asia, Australia, Europe, North America and South America. Carlyle has expertise in various industries, including: aerospace, defense & government services, consumer & retail, energy, financial services, healthcare, industrial, real estate, technology & business services, telecommunications & media and transportation.  The firm employs approximately 1,700 people in 35 offices across six continents and is based in Washington, DC (www.carlyle.com).

BofA Merrill Lynch, Morgan Stanley, UBS Investment Bank and Jefferies have agreed to provide debt financing for the transaction. J.P. Morgan Securities is serving as financial advisor to Symantec.  BofA Merrill Lynch, Morgan Stanley and UBS Investment Bank are serving as financial advisors to Carlyle and GIC.

© 2015 PEPD • Private Equity’s Leading News Magazine • 8-11-15

WILsquare Capital Launches in St. Louis

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WILsquare Capital has been launched in St. Louis to make investments in lower-middle market companies.  The new private equity firm is co-founded by William (Bill) Willhite and James (Jamie) Wilmsen.

WILsquare Capital will focus on businesses that are located in the Midwest and South that are often family-owned and have revenues of $20 million to $60 million and EBITDA of $2 million to $7 million (www.WILsquare.com).

“Throughout the Midwest and South, there are businesses built by entrepreneurs, business owners and management teams that emphasize culture, values and family,” said Mr. Willhite.  “We understand the unique challenges these business owners face when seeking a partner for the future of their company. We will invest not only financial capital in those businesses, but our team will work hard to grow those businesses, while being careful to protect the owner’s reputation and legacy with their employees and within their industry.”

Mr. Willhite has spent more than 20 years in private equity.  He has participated in more than 100 transactions exceeding $5 billion and has served as a director of 30 lower-middle market companies, including 14 as the senior member of the Board of Directors.  From 2007 through 2014, Mr. Willhite was with Thompson Street Capital Partners (TSCP), a St. Louis-based private equity firm, where he served as a Managing Partner and helped lead the firm through its $307 million second fund (TSCP II) and execution of a successful $380 million fundraising for TSCP III. While at TSCP, he was a member of the Management Committee and Investment Committee which oversaw 13 platform acquisitions, 22 add-on acquisitions and nine exits during his tenure with TSCP. Prior to TSCP, he spent 13 years at Harbour Group, another St. Louis-based private equity firm. There, he served as Senior Vice President, Chief Financial Officer and Managing Director and was a member of the Executive Committee and Investment Committee.

“We are a heartland business ourselves with heartland values, and believe that the currency of success is accountability and dependability,” said Mr. Wilmsen. “We identify with the unique challenges a lower-middle market company faces to achieve and sustain success and to innovate and grow. We have lived this in our own professional experiences and look forward to sharing these experiences with our partners.”

Mr. Wilmsen has more than 20 years of managerial, operational, financial and profit loss management experience. From August 2009 to December 2013, Mr. Wilmsen was the Chief Operating Officer and Chief Financial Officer of XIOLINK, a St. Louis managed hosting and colocation provider, until its acquisition by Cosentry in January 2014. Mr. Wilmsen remained with Cosentry as the Vice President and General Manager of its St. Louis Division until he became the Chief Financial Officer of Unite Fiber Networks from September 2014 through June 2015.

Messrs. Willhite and Wilmsen are joined at WILsquare Capital by Senior Associate Jack Randazzo. He joins the firm from US Bank’s Sponsor Finance Group where he participated in financings for private equity acquisitions of numerous lower-middle market companies.

© 2015 PEPD • Private Equity’s Leading News Magazine • 8-11-15

Vance Street Adds New Vice President

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Vance Street Capital has hired John LeRosen as the firm’s newest Vice President.  Mr. LeRosen’s duties will be to source and close transactions as well as to work with portfolio company management teams.

“I am thrilled to be joining Vance Street Capital,” said Mr. LeRosen. “Vance Street provides management teams with a level of support and industry insight rarely found in the middle market. I look forward to working closely with the firm’s talented team of investors and business operators.”

Prior to joining Vance Street Capital, Mr. LeRosen served as Chief Financial Officer of Avalon Laboratories, a manufacturer of specialty medical tubing, from November 2009 to June 2015.  Avalon Laboratories was acquired by Nordson Corporation in August 2014.  Before his time at Avalon, he was with American Capital and was part of the team that made an investment in Avalon in January 2008.

Mr. LeRosen spent eight years at American Capital where he focused on investing and providing financial due diligence support across dozens of companies in medical components and devices, specialty manufacturing, life sciences and industrial technology sectors. He began his career at KPMG and has a Bachelor of Business Administration degree with an emphasis in Accounting from James Madison University.

“We’ve known John for many years and are very pleased that he is joining Vance Street,” said Richard Crowell, Managing Partner. “John brings a wealth of operational knowledge and deal experience that will prove invaluable as Vance Street continues to grow its portfolio. In particular, John’s insights on the precision medical component industry, both as a former CFO and an investor in precision medical components companies, will greatly benefit our existing and future portfolio companies.”

Vance Street Capital makes control investments in companies with enterprise values up to $200 million. Sectors of interest include general industrial, aerospace & defense, and medical components and devices.  The firm is based in Los Angeles (www.vancestreetcapital.com).

© 2015 PEPD • Private Equity’s Leading News Magazine • 8-11-15