Archives for March 14, 2016

Blue Wolf Exits Piezocrystals Maker

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CTS Corporation has acquired CTG Advanced Materials (CTG-AM), a portfolio company of Blue Wolf Capital since December 2011, for $73 million in cash.

CTG-AM was formed in October 2013 by Blue Wolf when its portfolio company Channel Technologies Group (acquired by Blue Wolf in December 2011), acquired HC Materials, a maker of piezoelectric single crystals. Piezoelectric crystals have the ability to generate an electric charge in response to applied mechanical stress.

Today, CTG-AM develops and manufactures single crystal piezoelectric materials serving OEMs in the medical industry. The company’s products are used in high definition ultrasound imaging (3D and 4D), as well as intravascular ultrasound technology. Other applications for these materials include wireless pacemakers, implantable hearing aids and defense technologies. CTG-AM’s products are available in a variety of forms including plates, wedges, discs, cylinders, rings, tubes and cubes. According to Blue Wolf, CTG-AM is the only company to have vertically integrated its entire single crystal manufacturing process. The company was founded in 1997 and is headquartered outside of Chicago in Bolingbrook (www.channeltechgroup.com) (www.hcmat.com).

Blue Wolf invests in companies in which management of relationships with complex constituencies – such as government and labor – can change organizations and create value. The firm’s investment criteria are minimum revenues of $25 million; minimum transaction size of $20 million; and a minimum investment size of $10 million. The firm focuses its efforts on companies based in the United States and Canada. Blue Wolf is currently investing its third fund with $300 million in limited partner equity commitments. CTG Advanced Materials was a portfolio company of Blue Wolf Capital Fund II, LP. The firm is headquartered in New York (www.blue-wolf.com).

According to CTS Corporation, the acquisition of CTG-AM provides it with intellectual property and proprietary manufacturing methods that expand its offering of piezoelectric materials. This will allow CTS to become the one of the largest commercial producers of both single crystal materials and traditional piezoelectric ceramics. “CTG-AM’s market leadership, technological expertise and winning spirit are a perfect fit for CTS,” said Kieran O’Sullivan, CEO of CTS Corporation. “The acquisition of CTG-AM increases CTS’ involvement in the medical industry, and expands our portfolio of products and technologies around the categories of ‘sense, connect and move’.”

CTS Corporation (NYSE: CTS) is a designer and manufacturer of sensors, actuators and electronic components sold to OEMs in the aerospace, communications, defense, industrial, information technology, medical and transportation markets. CTS manufactures its products in North America, Europe and Asia and is headquartered in Elkhart, IN (www.ctscorp.com).

© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 3-14-16

Audax Buys Astra Pacific Outdoor

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AllOver Media, a portfolio company of Audax Private Equity since March 2015, has acquired Astra Pacific Outdoor.

Astra Pacific is an outdoor advertising company that provides high profile outdoor assets including wallscapes, billboards and double-decker bus advertising in the New York, Los Angeles, Chicago, San Diego, and San Francisco markets. Customers of Astra Pacific include many well-known brands in the entertainment space such as Dreamworks, Universal, NBC and HBO as well as Chase, LG, Coca-Cola, AT&T and Land Rover. The company is led by Astred Rodriguez, CEO.  Astra Pacific has offices in New York and Los Angeles (www.astrapacific.com).

AllOver Media (AOM) is one of the largest out-of-home advertising platforms in the US.  The company’s core products include gas station advertising, truckside advertising, indoor advertising, door hangers and cash jackets (cash jackets are branded money envelopes given out at check cashing locations).  AOM’s media products are placed at convenience stores and gas stations, on truck sides and at a variety of indoor locations, including restaurants, nightclubs and sports arenas.  The company provides national, regional or local media plans to its more than 1,000 member customer base.  AOM was founded in 2002 and is headquartered in Minneapolis (www.allovermedia.com).

“This acquisition is a great complement to our existing truckside and bus wrap platforms, and gives us a strong presence with exclusive inventory in some of the top markets in the country,” said Tony Jacobson, CEO of AllOver Media. “Our ability to extend a brand’s presence in these key markets will be valuable to the entertainment category, particularly on the west coast. The double decker bus digital screens are an emerging platform that can really bring a brand’s story to life.”

Audax has been active with AllOver Media and has closed two add-on acquisitions since acquiring the company in March 2015. In July 2015 it acquired the social indoor and the family network divisions of Zoom Media; and – also in July 2015 – acquired Resort Media, an advertising company serving North American winter resorts.

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. The firm was founded in 1999 and has offices in Boston, New York and Menlo Park (www.audaxgroup.com).

© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 3-14-16

Apollo to Acquire The Fresh Market

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The Fresh Market has agreed to be acquired by Apollo Global Management for $28.50 per share or approximately $1.36 billion. The transaction has fully committed financing in place and is expected to close by the end of the second quarter of 2016.

“We are delighted about this transaction with The Fresh Market, which was one of the early pioneers in small-box grocery, offering unique, delicious and healthy food with a keen focus on perishables,” said Andrew Jhawar, Senior Partner and Head of the Retail and Consumer Group at Apollo. The firm has been an active investor in several consumables retailers and brands such as Sprouts Farmers Market, Smart & Final, Hostess Brands and General Nutrition Centers.

The Fresh Market (NASDAQ:TFM) is a specialty grocery retailer with 186 stores in 27 states. The company focuses on perishable product categories such as meat, seafood, produce, deli, bakery, floral, sushi, and prepared foods; but also sells non-perishable products such as traditional grocery, frozen, and dairy products, as well as bulk, coffee and candy, beer and wine, and health and beauty products.  The company was founded in 1982 by Ray Berry and is headquartered in Greensboro, NC (www.thefreshmarket.com).

The transaction will be financed by a new $800 million senior secured facility and an equity contribution of approximately $525 million from funds managed by Apollo in addition to the equity rollover from Ray Berry and Brett Berry. The company will also enter into a new $100 million revolving credit facility at closing. The debt financing is being committed to by Barclays (www.barclays.co.uk), Royal Bank of Canada (www.rbccm.com), Jefferies Finance (www.jefferies.com), and Macquarie Capital (www.macquarie.com).

“We are excited about this transaction with Apollo, which recognizes the value of The Fresh Market’s brand and growth prospects while providing stockholders with an immediate and substantial premium,” said Rick Anicetti, The Fresh Market’s President and Chief Executive Officer. “Apollo is a highly-regarded investor, bringing deep industry expertise and financial resources, and we look forward to working with them to build on our progress in achieving our strategic plan to deliver long-term profitable growth.”

Apollo has total assets under management of $170 billion in private equity, credit and real estate funds invested across a core group of nine industries:  chemicals; commodities; consumer & retail; distribution & transportation; financial & business services; manufacturing & industrial; media, cable & leisure; packaging & materials; and satellite & wireless. The firm has offices in New York, Los Angeles, Houston, Chicago, Bethesda, Toronto, London, Frankfurt, Madrid, Luxembourg, Mumbai, Delhi, Singapore, Hong Kong and Shanghai (www.agm.com).

George Golleher, an experienced food industry executive and a former CEO for a number of Apollo portfolio companies, will be a co-investor with Apollo in the transaction. Ray Berry and Brett Berry, who together own 9.8% of The Fresh Market’s outstanding shares, have agreed not to tender shares held by them into the tender offer and will both participate and rollover the vast majority of their holdings in the transaction with Apollo.

J.P. Morgan Securities (www.jpmorgansecurities.com) is serving as the exclusive financial advisor to The Fresh Market. Barclays, RBC Capital Markets, Jefferies, and Macquarie Capital are serving as financial advisors to Apollo.

© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 3-14-16

Audax Buys Astra Pacific Outdoor

Waud Partners with Software Executive

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Waud Capital Partners (WCP) has partnered with software industry executive George Ahn to find, acquire and grow vertically-focused application software companies. WCP has committed $100 million of equity capital to back the partnership.

This agreement follows the recent close of the firm’s fourth private equity fund, Waud Capital Partners IV, with $1.056 billion of capital commitments.  The new fund was oversubscribed and closed at the hard cap and above the original target of $750 million of limited partner commitments.

“I am thrilled to have the opportunity to work with Waud Capital to acquire a vertically-focused software company and build it into an industry leader,” said Mr. Ahn. “The software market is rapidly evolving as SaaS delivery models create new opportunities and challenges, and as competitive lines become increasingly drawn around domain-specific expertise. Many software companies, particularly those in the middle market, have solid foundations for success but have yet to fully capitalize on their growth opportunities.”

Mr. Ahn has 25 years of experience in the application software industry and most recently was the head of IBM’s smart infrastructure software organization. During his time at IBM, Mr. Ahn had responsibility for a number of products including Maximo, asset management software used to manage physical assets on a common platform in asset-intensive industries; and Tririga, software used to manage the operational and environmental performance of facilities. His past experience includes global expansion, cloud migration and completing acquisitions. Before his time at IBM, Mr. Ahn led Tririga as its CEO for six years prior to its acquisition by IBM in 2011. Prior to Tririga, Mr. Ahn held senior leadership positions at PeopleSoft’s CRM division, TIBCO, and Siebel Systems.

“We are tremendously excited to partner with George,” said WCP Partner Matt Clary. “He has an exceptional track record over his entire career, having created tremendous value at a diverse range of organizations spanning from rapidly-growing middle market companies to global software giants. We believe the combination of George’s leadership and WCP’s growth capital and experience developing platform businesses will lead to great outcomes from our partnership.”

The partnership with Mr. Ahn comes less than a year after WCP’s June 2015 acquisition of CyberGrants, a provider of software-as-a-service used to manage charitable grants and employee engagement in corporate social responsibility activities. WCP acquired CyberGrants following a similar partnership with software executive Mark Layden, who is now the CEO of CyberGrants and an Operating Partner at WCP.

Waud Capital Partners makes investments from $50 million to $100 million in middle-market companies with enterprise values from $50 million to $250 million that operate in the healthcare services and business services sectors. Since its founding in 1993, Waud Capital has made more than 185 investments, including platform companies and follow-on opportunities.  The firm is headquartered in Chicago (www.waudcapital.com).

© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 3-14-16