The Riverside Company has sold Brandmuscle, a provider of local marketing technology and services, to American Capital. The acquisition was financed with equity from American Capital Equity III, LP, a $1.1 billion private equity fund raised in 2014.
Brandmuscle is an advertising and marketing agency that provides software and services that enable brands with distributed sales and marketing channels to create and execute local marketing campaigns across all mediums and formats. The company is led by its CEO Philip Alexander and has approximately 650 employees. Brandmuscle has offices in Chicago, Cleveland, Austin and Newark (www.brandmuscle.com).
Riverside first invested in Brandmuscle in 2011 – the investment was originally known as Centiv Services – and completed the add-on acquisitions of TradeOne Marketing and Brandmuscle, with the combined entity adopting the new name. “Brandmuscle provides a compelling and valuable service, and we’re delighted to have greatly extended its reach during our hold period,” said Riverside Managing Partner Loren Schlachet. “We were able to build on a strong company and grow it both organically and through add-on acquisitions.”
“We were able to greatly expand the customer base and broaden Brandmuscle’s capabilities, which allowed us to deliver more value to our clients,” said Riverside Vice President Brad Resnick. “Brandmuscle has a strong management team who shared our vision and executed that vision ably over the past four years.”
The Riverside Company invests in businesses valued at up to $300 million (€200 million in Europe). Since its founding in 1988, Riverside has invested in more than 380 transactions. The firm’s international portfolio includes more than 70 companies. Riverside is headquartered in New York with additional offices in Atlanta, Chicago, Cleveland, Dallas, Los Angeles, San Francisco, and London (www.riversidecompany.com). Working with Mr. Schlachet and Mr. Resnick on the transaction for Riverside were Partner Alan Peyrat, Operating Partner Rex Niles, Associate Jason Thorn and Finance Director Mike Rath. Riverside Origination Principal Amy Margolis helped facilitate the exit.
American Capital Equity (ACE) is led by partners Justin DuFour, Sean Eagle, Eugene Krichevsky and David Steinglass, and invests between $25 million and $150 million of equity per transaction in the business services, healthcare products and services, and industrial growth end markets. Typical acquisitions have recurring revenue and EBITDA between $5 million and $25 million.
“Brandmuscle fits very well within ACE’s technology-enabled business services vertical, providing its clients with a wide range of services that facilitate localized marketing by their local affiliates,” said Mr. Krichevsky.
The ACE investor group, led by funds advised by Coller Capital, Goldman Sachs Asset Management and StepStone Group, also includes select sovereign wealth funds, state retirement and pension systems, high net worth family offices, superannuation funds and foundations. ACE is managed by a subsidiary of American Capital Asset Management which is wholly owned by American Capital. ACE is headquartered in Bethesda (www.acequity.com).
Lincoln International (www.lincolninternational.com), TM Capital (www.tmcapital.com), Deloitte (www.deloitte.com)and Jones Day (www.jonesday.com) advised Riverside on the transaction.
© 2015 PEPD • Private Equity’s Leading News Magazine • 12-4-15
