Archives for September 22, 2015

Wind Point Exits Argotec

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Wind Point Partners has signed an agreement to sell its portfolio company Argotec to publicly traded Schweitzer-Mauduit International for $280 million in cash.

Argotec is a manufacturer of specialty polyurethane film and sheet used in a variety of niche applications, including surface protection and impact resistant glass. In addition to flat-die, cast-on-carrier and blown-film-extrusion technologies, Argotec has expertise in extrusion coating, multi-layer constructions and closed-cell polyurethane foam sheet extrusion. The company is based in Greenfield, MA (www.argotec.com).

Argotec has annual revenues of approximately $115 million and an EBITDA margin of almost 20%. This yields a purchase price multiple on this transaction of above 12x.

Wind Point Partners acquired Argotec in partnership with Guy Broadbent in May 2013.  Prior to joining Argotec as CEO, Mr. Broadbent was the CEO of Xcellerex, an early stage bio-manufacturing platform backed by Kleiner Perkins. Prior to Xcellerex, he was president of the $1.8 billion Laboratory Products Group at ThermoFisher Scientific.

“Over the past two years we created significant value at Argotec by launching new products, pursuing sales in new markets including medical films and graphic films, and significantly expanding our footprint geographically. Wind Point has been an involved and supportive partner throughout,” said Mr. Broadbent.

Wind Point Partners invests from $20 million to $70 million of equity in companies with revenues from $100 million to $500 million and EBITDAs of at least $8 million. Industries of interest include business services, consumer products, healthcare and industrial products. The firm has approximately $2.5 billion in capital under management.  Wind Point Partners was founded in 1984 and is based in Chicago (www.wppartners.com).

“We have had a great partnership with Guy and the whole Argotec team during our ownership. They have done an excellent job enhancing Argotec’s product capabilities and expanding into other markets,” said Paul Peterson, a managing director at Wind Point.

Schweitzer-Mauduit International (NYSE: SWM) manufactures and sells paper and reconstituted tobacco products to the tobacco industry worldwide. The company also manufactures specialty papers for use in other applications. Schweitzer-Mauduit was founded in 1995 and is headquartered in Alpharetta, GA (www.swmintl.com).

Moelis & Company was the exclusive financial advisor to Schweitzer-Mauduit.

© 2015 PEPD • Private Equity’s Leading News Magazine • 9-22-15

HKW Acquires Partners In Leadership

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Hammond, Kennedy, Whitney & Company (HKW) has made an investment in Partners In Leadership, a provider of leadership training and management consulting services.

Partners In Leadership (PIL) was founded in 1989 by Roger Connors and Tom Smith.  Customers of the company include many large pharmaceutical companies, almost half of the Dow Jones Industrial Average, and nearly half of the Fortune 50 largest companies.  PIL is headquartered north of San Diego in Temecula, CA, with additional offices in Atlanta, Chicago, Dallas, Phoenix, Pittsburgh, Manhattan, Milwaukee, San Diego, Salt Lake City, and Seattle (www.ozprinciple.com).

Roger Connors will continue to lead the company as CEO and the company’s leadership team will remain the same. Co-founder Tom Smith is on sabbatical and will continue in an advisory role upon his return.

“This event is a new high mark for all who have been involved to this point in building this incredible company,” said Mr. Connors.  “With a focus on solid fundamentals, financial expertise, and empowering management, HKW is an ideal partner to help us achieve our long-term vision of increasing the company’s already strong growth, reaching more organizations with our award-winning curriculum and methodology, and expanding our solutions suite to positively impact the lives of millions more people.”

Hammond, Kennedy, Whitney & Company invests in companies with revenues between $20 million and $200 million and EBITDAs between $2 million and $20 million. Since 1982, HKW has completed 49 platform management buyouts of small middle-market companies throughout North America as well as 54 add-on acquisitions. The firm was founded in 1903 and is headquartered in Indianapolis with an additional office in New York (www.hkwinc.com).

“This is a new and exciting chapter for our company,” said Mr. Smith.  “We’ve created a strong reputation through the years for helping our clients produce improved results, and this investment will allow us to leverage our past successes into an even stronger future.”

© 2015 PEPD • Private Equity’s Leading News Magazine • 9-22-15

AIP Acquires Goss International

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American Industrial Partners has completed its acquisition of Goss International from Shanghai Electric Corporation.

Goss International is a manufacturer of web offset printing presses and finishing systems for newspaper, magazine, packaging, and catalogs.  The company also provides auxiliary printing equipment including splicers, pasters and dryers through its Contiweb division.  Goss was founded in 1885 and has approximately 950 employees. The company is headquartered near Portsmouth in Durham, NH (www.gossinternational.com).

“Working alongside the management team at Goss, we look forward to executing identified growth initiatives and driving operational efficiencies at the company to further differentiate Goss from its competitors,” said Sparsh Bhargava, an AIP partner.

American Industrial Partners (AIP) invests in North American headquartered industrial companies with sales ranging from $100 million to $500 million and EBITDA up to $70 million. Transaction values are typically less than $500 million.  The firm was founded in 1989 and is currently managing more than $1.1 billion in equity capital. AIP is based in New York (www.americanindustrial.com).

“American Industrial Partners is a like-minded and forward-thinking organization.  In partnership with them we are looking forward to building on our market leading position and executing a growth plan focused on providing our customers with the highest-quality portfolio of products and aftermarket parts, services and enhancements,” said Rick Nichols, CEO of Goss.

The seller of Goss is Shanghai Electric (HK:2727), a multinational power generation and electrical equipment manufacturing company headquartered in Shanghai (www.shanghai-electric.com).

© 2015 PEPD • Private Equity’s Leading News Magazine • 9-22-15

Palm Beach Exits PEMCO

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Palm Beach Capital has sold its portfolio company Progressive Employer Management Company (PEMCO), a provider of human resource, payroll, employee benefits and workers compensation services to small and medium sized companies.

Palm Beach Capital initially invested in PEMCO in August of 2004 through its first fund and made a second investment in February 2006 through its second fund.

“PEMCO was able to grow revenues and its customer base by over 350% during Palm Beach Capital’s ownership.  On behalf of everyone at Palm Beach Capital, we want to thank the employees of PEMCO and our partners at Brookwood Associates, Goldman Sachs, and Ackerman for their roles in this investment with us,” said Nate Ward, Co-Founder and General Partner of Palm Beach Capital

Palm Beach Capital makes control and non-control investments of $3 million to $20 million in companies with enterprise values from $10 million to $100 million and that have a minimum EBITDA of $3 million. The firm is both industry and location agnostic. Since founding in 2001, Palm Beach Capital has made investments in 42 companies and has approximately $325 million in total assets under management. The firm has offices in West Palm Beach and Tampa (www.pbcap.com).

PEMCO is headquartered in Sarasota, FL (www.progressiveemployer.com).

© 2015 PEPD • Private Equity’s Leading News Magazine • 9-22-15

New Mountain Acquires ECS

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New Mountain Capital and HealthPort-IOD, a portfolio company of New Mountain Capital since December 2014, has acquired ECS, a provider of on-demand access to medical records.

ECS utilizes its technology-enabled workflow tools to retrieve and deliver over four million medical charts each year and has access to over 65,000 provider sites nationwide. The company has full geographic coverage with the ability to retrieve medical information in all 50 states.  ECS was founded in 1999 and is headquartered in Phoenix (www.myecsinc.com).

HealthPort-IOD is a provider of medical information access management and compliance services to healthcare organizations. The company also provides coding, audit management, denial management and document management services. HealthPort and IOD announce a merger of the two companies in May 2015.  The company is headquartered in Alpharetta, GA (www.healthport.com).

The acquisition of ECS by HealthPort-IOD increases the automated capability for retrieving and delivering medical information.  The senior leadership team of ECS will remain in place post-acquisition and will lead the record retrieval operations of the combined business.

“We have been very impressed with the business that the ECS team has built, especially with respect to the speed, quality, and scale of its product and technology offerings. We look forward to working with the team as we integrate HealthPort, IOD and ECS into a large scale technology-enabled clinical information provider,” said Matt Holt, Chairman of the Board of the combined company and Managing Director of New Mountain.

“ECS is a critical component of the clinical data company we are building. The company brings us the best medical record retrieval capability available in the market as well as a footprint of over 65,000 provider sites. The addition of ECS complements HealthPort-IOD’s existing offering and expands the combined company’s ability to provide secure access and delivery of medical information across the entire healthcare ecosystem,” added Mr. Holt.

New Mountain Capital currently manages private and public equity funds with over $15 billion of assets under management. The firm is an industry generalist but has specific expertise in education, health care, software, business services, logistics, specialty chemicals, federal services, media, consumer products, financial services and insurance, environmental services, infrastructure and energy.  New Mountain was founded in 1999 and is headquartered in New York (www.newmountaincapital.com).

© 2015 PEPD • Private Equity’s Leading News Magazine • 9-22-15

Paul Walsh Newest Senior Managing Director at Calera

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Calera Capital has added a new senior managing director with the addition of Paul Walsh to its middle-market investment team.  For the past seven years, Mr. Walsh has been an Operating Partner for Calera Capital, serving in various operating and managerial roles at the firm’s portfolio companies.

Mr. Walsh is the former Chairman and CEO of eFunds Corporation (NYSE: EFD), a provider of risk management, electronic funds transfer services, prepaid card processing, and outsourcing services to more than 10,000 financial services companies in more than 80 countries.  During his time at eFunds the company’s operating performance improved through organic revenue growth, acquisitions, rationalization of non-core assets and cost reductions. Fidelity National Information Services (NYSE: FIS) acquired eFunds in September 2007 for approximately $1.8 billion.

“As a former CEO and operator, I understand and greatly appreciate the partnership approach of Calera Capital and feel extremely fortunate to be part of the Calera team going forward,” said Mr. Walsh.

Mr. Walsh serves as Chairman of the Board of Directors of Competitor Group, a Calera portfolio company engaged in active lifestyle sports events and media. He is also a Director of Staples (NASDAQ: SPLS). Previously he served on the Boards of SterlingBackcheck, a former Calera portfolio company that provides employment and background screening services, and Thunderbird School of Global Management.  Mr. Walsh has held other senior leadership positions at Wright Express (CEO), BancOne Diversified Services (CEO), Norwest Capital Management and Trust (SVP), and Diners Club Germany (CEO).  He received a BS in Engineering from Tufts University and a MBA from Boston University.

“Calera’s strategy is to partner with founders and management teams and to help them take their businesses to the next level. Paul has proven to be a unique resource in support of our differentiated approach,” said Calera Capital Managing Partner Mark Williamson.

Calera Capital, formerly known as Fremont Partners, invests from $50 million to $250 million in companies with enterprise values from $100 million to $750 million.  Sectors of interest include business services and specialty industrials.  Calera was founded in 1991 and has offices in San Francisco and Boston (www.caleracapital.com).

© 2015 PEPD • Private Equity’s Leading News Magazine • 9-22-15