February 1, 2016
Search

Private Equity Professional

Private Equity's News Leader

There is a right and a wrong in the universe, and that distinction is not hard to make.
Superman

You are here: Home / 2016 / February / Archives for 1st

Archives for February 1, 2016

Investcorp Sells Veritext to Pamplona

by

veritext nf1Investcorp has sold its portfolio company VText Holdings (Veritext) to private equity firm Pamplona Capital Management. Investcorp acquired Veritext in July 2010 from The Riverside Company which in turn had acquired the business in August 2005.

Investcorp was very active during its ownership of Veritext. Since being acquired by Investcorp, the company doubled its sales force, completed 16 add-on acquisitions, opened two offices in new markets, and made investments in technology and marketing.

veritext nf11Today, Veritext is a provider of deposition and litigation support services across the US. Customers include law firms – including attorneys, paralegals, and legal administrators – as well as corporations and regulatory agencies. The company’s services include court reporting, deposition and conferencing, privacy and data security, national and international coverage, real time depositions, exhibit management services, and transcription services. Veritext was founded in 1997 and is led by Nancy Josephs, Chief Executive Officer. The company has over 500 employees and is headquartered in Livingston, NJ with additional offices, deposition rooms, and conference centers across the United States (www.veritext.com).

maud brown nf1“When Investcorp acquired Veritext in 2010, we knew the company had the potential for growth in the litigation services market,” said Maud Brown, Managing Director of Corporate Investment in North America. “Through organic and inorganic strategic initiatives, Veritext has grown faster than the industry. Veritext’s expansion coupled with the company’s ability to generate strong free cash flow has created significant value to all stakeholders.”

Investcorp invests in mid-size companies operating in an array of industry sectors that have total enterprise values of between $200 million and $1 billion and are located in North America or Western Europe. As at June 30, 2015, Investcorp had $10.6 billion in total assets under management. The group has offices in New York, London, Bahrain and Saudi Arabia (www.investcorp.com).

Pamplona, the buyer of Veritext, makes direct private equity, fund of hedge funds, and single manager hedge fund investments.  The Veritext investment is being made from Pamplona’s fourth private equity fund, Pamplona Capital Partners IV, L.P., a $4 billion fund raised in 2014. Pamplona was founded in 2005 and is based in London and New York (www.pamplonafunds.com).

“Veritext is the leading provider of deposition services in the US and we look forward to working with CEO Nancy Josephs, CFO Richard Antoneck and the rest of the management team to support the continued growth of the company,” said William Pruellage, a Partner at Pamplona. “We believe that Veritext has significant opportunities to leverage its proprietary technology offering to continue to grow both organically and through accretive tuck-in acquisitions.”

Pamplona received legal advice from Skadden Arps (www.skadden.com). The transaction was financed with a first lien term loan arranged by Madison Capital Funding (www.mcfllc.com), BMO (www.bmo.com) and Antares Capital (www.antarescapital.com) as well as a second lien term loan arranged by Eaglehill (www.eaglehillcapital.com), PennantPark (www.pennantpark.com) and Babson Capital Management (www.babsoncapital.com).

© 2016 PEPD • Private Equity’s Leading News Magazine • 2-1-16

Sun Capital Acquires HuHot

by

huhot nf1Sun Capital Partners has acquired CCW, LLC, the largest franchisee of HuHot Mongolian Grill restaurants.

huhot f2HuHot restaurants feature create-your-own Asian stir-fry. The company owns and operates 21 HuHot restaurants across the Midwest, including locations in Iowa, Nebraska, Kansas and South Dakota. HuHot is headquartered in Omaha (www.huhot.com).

Marc Leder nf5“CCW has built a strong business on a unique concept, and we’re excited to partner with this experienced management team to build on their tremendous success,” said Marc Leder, Co-CEO at Sun Capital. “The company is well positioned for continued, substantial growth.”

Sun Capital has a background in the restaurant sector through its investments in current affiliated portfolio companies, including Bar Louie Restaurants, a local-themed bar and eatery with more than 100 locations; Boston Market, a fast casual restaurant with 460 nationwide locations; and Smokey Bones, a fire-grilled casual dining restaurant with over 65 locations.

“We are actively exploring development partnerships with fast-casual franchisors, as our focus will be on working with the business’ outstanding operating team to scale this single concept franchisee into a multi-concept platform,” said Sun Capital Managing Director Anthony Polazzi.

Sun Capital invests in leveraged buyouts, equity, and debt in companies that can benefit from its in-house operating professionals and experience. Sun Capital has invested in and managed more than 320 companies worldwide since its founding in 1995. The firm has offices in Boca Raton, Los Angeles and New York; and affiliates in London, Frankfurt, Paris, Stockholm and Shenzhen (www.SunCapPart.com).

© 2016 PEPD • Private Equity’s Leading News Magazine • 2-1-16

Madison Dearborn Sells Sage to Stryker

by

sage nf1Publicly traded Stryker Corporation has signed an agreement to acquire Sage Products, a developer of healthcare products used in hospital settings and a portfolio company of Madison Dearborn since November 2012. Stryker will pay just under $2.8 billion in cash for Sage.

sage nf11Sage Products is a developer of products used to prevent hospital-acquired conditions such as ventilator-associated conditions, skin ulcerations due to incontinence, pressure ulcers, surgical site infections and healthcare worker injury. Sage’s products include oral care, skin preparation and protection, patient cleaning and hygiene, turning and positioning devices and heel care boots. The company’s products are used mainly in the intensive care and medical/surgical hospital units. Sage’s sales for fiscal 2015 totaled $430 million, up 13% over the prior year. Sage was founded in 1971 and has more than 800 employees in the US, Canada, and Europe. The company operates a 600,000 square-foot facility in Cary, a northwest suburb of Chicago (www.sageproducts.com).

scott brown sage nf1“With Madison Dearborn’s support, our business has grown domestically and we have achieved significant initial success with our international expansion,” said Scott Brown, President and CEO of Sage Products. “We are grateful for Madison Dearborn’s partnership over the past few years and believe that Sage is well-positioned for continued achievement and long-term success with Stryker.”

stryker sage nf1Stryker is a Fortune 500 medical technologies firm (NYSE:SYK). The company’s products include implants used in joint replacement and trauma surgeries; surgical equipment and surgical navigation systems; endoscopic and communications systems; patient handling and emergency medical equipment; neurosurgical, neurovascular and spinal devices; as well as other medical device products used in a variety of medical specialties. In the US, most of Stryker’s products are marketed directly to doctors, hospitals and other healthcare facilities. Internationally, Stryker products are sold through company-owned sales subsidiaries and branches as well as third-party dealers and distributors. The company was founded in 1946 by Homer Stryker and is headquartered in Kalamazoo, MI (www.stryker.com).

J.P. Morgan (www.jpmorgan.com) served as Stryker’s financial advisor and Sullivan & Cromwell (www.sullcrom.com) served as legal counsel. Barclays (www.banking.barclaysus.com) is serving as Sage’s financial advisor and Kirkland & Ellis (www.kirkland.com) and Madden, Jiganti, Moore & Sinars (www.mjms.com) are serving as legal counsel for Sage. The Kirkland team was led by corporate partners Sanford Perl, Mark Fennell and Matthew Mauney.

© 2016 PEPD • Private Equity’s Leading News Magazine • 2-1-16

InHealth Acquired by Pine Tree Equity

by

inhealth nf1Pine Tree Equity has acquired InHealth MD Alliance and Medical Home Alliance (together “InHealth”). This acquisition marks Pine Tree Equity’s 2nd investment in the physician services industry. Pine Tree Equity has partnered in this transaction with the founders of InHealth, Dr. Nelson Pichardo and Mrs. Patricia Pichardo.

inhealth nf12 pine treeInHealth is a provider of primary care physician services primarily to Medicare eligible patients in Central Florida.  The company operates 13 medical centers located throughout Central Florida.  InHealth was founded in 2011 and is headquartered south of Orlando in Davenport, FL (www.inhealthmd.com).

According to a report by healthcare advisory and consulting firm Marwood Advisory Group (www.marwoodgroup.com), the number of Medicare Advantage eligible patients will continue to increase by 6% to 8% per year over the next 10 years as baby boomers age into Medicare.  According to Pine Tree, nearly 10% of the US Medicare population resides in Florida.

Pine Tree Equity invests in companies that have revenues of $10 million to $50 million and EBITDAs of $2 million to $7 million. Sectors of interest include business, consumer and financial services; consumer products; franchisors and franchisees; and niche manufacturing. Miami-based Pine Tree is investing out of its third fund. The buy of InHealth is the firm’s 31st investment since its founding in 2007 (www.pinetreeequity.com).

© 2016 PEPD • Private Equity’s Leading News Magazine • 2-1-16

Brentwood Recaps Well-Performing Soft Surroundings

by

soft surroundings nf1Consumer focused Brentwood Associates has completed a dividend recapitalization of Soft Surroundings. The dividend recap was financed through an expansion of the company’s existing credit facility and Soft Surroundings also increased its debt capacity to finance its national retail store rollout. Brentwood first invested in Soft Surroundings in August 2012.

soft surroundings nf11Soft Surroundings is a multi-channel marketer and lifestyle brand targeting active women. The company’s comfort, romance and relaxation products include clothing, jewelry, shoes, bedding, and beauty and fragrance products. Soft Surroundings reaches its customer through its print, digital and social media channels as well as a national footprint of 28 stores. The company was founded in 1999 by Robin Sheldon (President/CMO), Tom Wilcher (CEO) and Grant Williams (Vice Chairman) and is headquartered in St. Louis (www.softsurroundings.com).

The financing for the recapitalization was provided by CIT Bank; Zions First National Bank; KeyBank; Bank of America Merrill Lynch; and Banc of California. Soft Surroundings is in the midst of a nationwide store expansion strategy, and the new debt financing includes a facility to fund future store openings. The company opened 11 new stores in 2015 and has identified 15 locations for 2016.

“Exceptional earnings growth, and a strong partnership with our supportive lenders, has allowed the company to return a significant portion of the invested capital through a dividend recapitalization,” said Eric Reiter, a partner with Brentwood Associates.

roger goddu nf1“We are thrilled with Soft Surroundings’ outstanding operating results. The company’s continued success in retail as measured by both unit and same-store sales growth is a direct result of the hard work and dedication of the Soft Surroundings management team,” said Roger Goddu, a partner at Brentwood. “We could not be more enthusiastic about the company’s prospects.”

Brentwood Associates is a consumer-focused private equity investment firm with over $1.4 billion of capital under management. Sectors of interest include branded consumer products; consumer and business services; direct marketing, including direct mail and e-commerce; education; health and wellness; restaurants; and specialty retail. The firm was founded in 1972 and is based in Los Angeles (www.brentwood.com).

Earlier this month, Brentwood Associates acquired Boston Proper, a direct-to-consumer business from Chico’s FAS. Like Soft Surroundings, Boston Proper is a multi-channel specialty retailer of women’s high-end apparel and accessories that is available nationwide by direct mail catalog and online. The company was founded in 1992 and is headquartered in Boca Raton (www.bostonproper.com). Brentwood’s strategy is to build a direct-to-consumer lifestyle brand through Boston Proper’s print, digital and social channels.

© 2016 PEPD • Private Equity’s Leading News Magazine • 2-1-16

To search in site, type your keyword and hit enter