Archives for May 3, 2016

CD&R Buys Sausage Casing King

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Clayton, Dubilier & Rice (CD&R) has agreed to acquire Kalle GmbH, one of the largest makers of artificial casings used in the meat processing industry.

Kalle’s casings are used in the pork, beef, poultry and vegetarian protein categories. Last year, the company had revenues of €281 million and produced more than 850 million meters of casings (just over 528,000 miles – or 21 times around the earth). The company was founded in 1872 and has facilities in nine countries and is headquartered in Wiesbaden (www.kalle-group.webseiten.cc/en).

CD&R Partner Vindi Banga, a former member of the Unilever Executive Board, will assume the role of Chairman of Kalle at the close of the transaction which is expected around the end of the first half of 2016.

“Kalle is a proven innovator with a highly differentiated offering to customers which improves product quality and production processes – this is particularly apparent in the value-added casings segment where Kalle pioneered the category and is the global leader today,” said Mr. Banga. “We believe Kalle is well-positioned to capitalize on its growth momentum, strong product mix and exceptional R&D capabilities to further penetrate the global market.”

“Our investment model is based on helping businesses grow profitably,” said CD&R Partner Sonja Terraneo. “We have been following Kalle’s progress for many years and look forward to working with Kalle’s management and employees to continue its sales and profit growth and to make the company an even more valuable enterprise over the long term.”

CD&R invests in European and US-based businesses.  Since founding in 1978 the firm has invested $21 billion in 66 companies across a range of industries with an aggregate transaction value of approximately $100 billion. CD&R is based in New York and London (www.cdr-inc.com).

“Kalle is a resilient market leader and growing business with a strong German heritage and excellent customer exposure globally, particularly in the growing US market,” said CD&R Partner David Novak. “It is also a great fit with CD&R’s focus on both consumer and industrial businesses in Europe, which have global reach, as well as our deep industry experience in foodservice.”

Committed financing for this transaction is being provided by Bank of Ireland (www.bankofireland.com), ING Group (www.ing.com), UniCredit (www.unicreditgroup.eu), BNP Paribas (www.bnpparibas.com/en), HSBC (www.hsbc.com), Societe Generale (www.societegenerale.com/en), Crédit Agricole (www.ca-cib.com), Sumitomo Mitsui  (www.smbc.co.jp), and Oaktree Capital (www.oaktreecapital.com).

Freshfields (www.freshfields.com) and Debevoise & Plimpton (www.debevoise.com) were the legal advisors to CD&R and PwC (www.pwc.com) and William Blair (www.williamblair.com) acted as financial advisors.

© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 5-3-16

Lion Buys Into Leonard Green’s Authentic Brands

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Consumer-focused Lion Capital has signed an agreement to acquire a minority interest in Authentic Brands Group, a portfolio company of Leonard Green & Partners (LGP).

Authentic Brands Group (ABG) was formed by LGP in 2010 to acquire, manage and build value in prominent consumer brands and is led by Jamie Salter CEO. LGP and Mr. Salter will remain the majority owners of ABG upon completion of the Lion transaction. ABG has offices in New York, Toronto and Los Angeles (www.authenticbrandsgroup.com).

ABG’s specific areas of interest include fashion, sports and lifestyle, celebrity, media and entertainment. The company’s portfolio includes more than 23 brands such as Elvis Presley, Marilyn Monroe, Muhammad Ali, Shaquille O’Neal, Juicy Couture, Jones New York, Hickey Freeman, Spyder and Tapout.  ABG’s brands have total annual retail sales of approximately $4.5 billion.

“After spending time with Jamie and the ABG team, I have gained a tremendous respect for the platform the ABG team has built,” said Lyndon Lea, a partner at Lion Capital. “Jamie and I saw appealing synergies between ABG and Lion Capital, and our investment represents an exciting next step for the development of ABG.”

Lion’s consumer investments include Kettle Foods, a producer of all-natural snacking products; John Varvatos, a men’s lifestyle brand; Perricone MD, an anti-aging skincare brand; Jimmy Choo, a luxury shoe and accessories retailer; and AllSaints, a contemporary fashion brand with a global store network.

Lion Capital makes investments in consumer businesses in Europe and North America. With offices in London and New York, the firm’s principals have led the investment of €6 billion of equity capital in more than 30 businesses and more than 100 consumer brands across North America and Europe. Lion Capital has offices in London and Los Angeles (www.lioncapital.com).

Leonard Green invests in middle-market companies in the retail, distribution, healthcare, aerospace/defense, and consumer/business services sectors. The firm was founded in 1989 and manages approximately $15 billion of equity capital. Leonard Green is headquartered in Los Angeles (www.leonardgreen.com).

© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 5-3-16

Kohlberg & Company Acquires Amendia

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Kohlberg & Company has acquired a majority equity interest in Amendia, a designer, developer, manufacturer and marketer of medical devices used in spinal surgical procedures. Kohlberg invested in Amendia through its $1.6 billion private equity fund, Kohlberg Investors VII, LP.

Amendia’s products include anterior cervical plates; endoscopic spine systems; cervical interbody devices; vertebral body replacements; facet screws; inflatable bone expander systems; and synthetic grafts. The company markets and sells its products through direct sales employees, independent agencies, and distributor partners. Amendia was founded in 2008 by Jeffery Smith and Tim Lusby. The company is headquartered and operates a state-of-the-art manufacturing facility north of Atlanta in Marietta, GA (www.amendia.com).

“We see tremendous growth opportunities for Amendia,” said Chris Anderson, a partner of Kohlberg & Company. “Through its portfolio of products and intellectual property, scalable operational infrastructure, Amendia is positioned to serve the growing demands of the spinal surgery marketplace in the US and beyond.”

At closing of the transaction, Kohlberg hired two new executives to join Amendia: Chris Fair, Chief Operating Officer; and Larry Boyd, PhD, Executive Vice President, Research & Development. Kohlberg also appointed Scott Bruder, MD, PhD, a Kohlberg strategic advisor, to Amendia’s Board of Directors and Executive Committee.

“Amendia has carefully and steadily grown organically and through strategic add-ons  to become one of the premier growth companies offering a complete suite of products that meet the needs of surgeons and their patients,” said Mr. Fair, who prior to joining Amendia spent a decade at DePuy Spine, a Johnson & Johnson Company. “I am excited to be joining Jeff Smith, Tim Lusby and their team of professionals at Amendia, and I look forward to helping the company expand its footprint, add resources, and build value for all customers and partners.”

“The solid foundation already in place at Amendia is a distinguishing characteristic that gives this platform so much potential,” said Mr. Bruder, who previously served as Chief Medical and Scientific Officer of Stryker; Chief Science and Technology Officer of Becton Dickinson; and as a Worldwide Vice President at DePuy, alongside Mr. Fair.

Kohlberg & Company invests in companies in the industrial manufacturing; consumer products; business services; healthcare services; and financial services sectors. The firm concentrates on companies with EBITDAs between $20 million and $100 million where it can invest between $50 million and $200 million of equity. Kohlberg & Company was founded in 1987 and is based north of New York City in Mt. Kisco, NY (www.kohlberg.com).

© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 5-3-16

MSouth Acquires Hire Dynamics

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MSouth Equity Partners has acquired Hire Dynamics, a staffing company that specializes in call centers, manufacturing facilities, logistics, e-commerce operations and office support.

Hire Dynamics was co-founded in 2001 by CEO Dan Campbell and CFO Jon Neff. With this transaction closed, MSouth now holds a majority equity interest in the company while Mr. Campbell remains the largest individual shareholder. Mr. Campbell will remain with the company as executive chairman and Mr. Neff will continue in his role as CFO.

Effective May 15, Larry Feinstein will become the new CEO of the company. Mr. Feinstein was most recently a senior vice president at ADP, an outsourced provider of payroll services and human resources functions.

Hire Dynamics places an average age of 4,500 people to work every week and has approximately 550 clients. The company has 12 branch offices and 22 on-sites locations across Georgia, North Carolina, South Carolina, Tennessee, Alabama and Texas and is headquartered in Duluth, GA (www.hiredynamics.com).

“We are excited about our investment in Hire Dynamics,” said Peter Pettit, who led the transaction for MSouth. “Hire Dynamics has a long standing reputation for great people, service and consistent growth. Along with its standing as one of the top 1% of staffing companies in the US, it is also a ‘Best Places to Work’ in every market where it operates. We look forward to partnering with the Hire Dynamics senior team to grow the business.”

MSouth invests from $10 million to $50 million in lower middle market companies typically valued between $25 and $125 million. Sectors of interest include business services, distribution, specialty manufacturing, telecommunications and media. MSouth is headquartered in Atlanta (www.msouth.com).

“MSouth’s industry expertise and quality reputation for working with management teams was a natural fit for us. Their substantial capital and M&A experience will allow us to scale our business while building on our strengths of industry-leading internal employees providing superior service to our clients and jobs that matter for our talent,” said Mr. Campbell.

CHILDS Advisory Partners (www.childsadvisorypartners.com) was the financial advisor to Hire Dynamics.

© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 5-3-16

Antares Backs ABRY Buy of SambaSafety

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Antares Capital was the administrative agent, lead arranger and bookrunner on a senior secured credit facility to support the acquisition last month of Safety Holdings (DBA SambaSafety) by ABRY Partners. The selling shareholders of SambaSafety were Cerca Group and Ticonderoga Private Equity which had acquired the company in November 2011.

SambaSafety is a provider of cloud-based data services targeted at unsafe driving behavior. Customers include employers, insurance companies, background screeners and fleet management companies. The information is used to identify and address unsafe driving behavior to allow insurance carriers to accurately price risk throughout the lifecycle of insurance policies. SambaSafety is led by its CEO Richard Crawford and is based in Albuquerque (www.SambaSafety.com).

Antares Capital is a provider of debt and equity financing for middle-market, private equity-backed transactions. The firm has provided more than $120 billion in financing over the past five years and has offices in Atlanta, Chicago, Los Angeles, New York, Norwalk (Connecticut) and Toronto (www.antares.com). Antares was sold by GE Capital in August 2015 to the Canada Pension Plan Investment Board.

“Antares’ flexibility and strong presence in the technology space made them a great partner on this transaction,” said Nathan Ott, principle for ABRY Partners.

ABRY invests in the media, communications, and business and information sectors. The firm is currently managing $4.3 billion of total capital and investing out of a $1.9 billion private equity fund, a $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).

© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 5-3-16

New MainStream Gets New Principal

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New MainStream Capital has promoted David Peterson to Principal. Mr. Peterson joined the firm in 2012 as an Associate and was elevated to Vice President in 2014. He is responsible for identifying and evaluating investment opportunities, conducting due diligence and monitoring the firm’s investments.

Prior to joining NMS, Mr. Peterson was an Associate at Waud Capital Partners. Earlier in his career, he was an analyst in the healthcare investment banking group of Houlihan Lokey. He has a BBA in finance and accounting from the University of Michigan.

New MainStream Capital (NMS) makes equity investments of $10 million to $50 million in companies with enterprise values less than $300 million. Sectors of interest include healthcare services, consumer products and services, and specialized business services. The firm was formed through the spin-out of a group of companies from the Goldman Sachs Merchant Banking Division in 2010. NMS is led by its founders and managing partners Martin Chavez and Kevin Jordan and has offices in New York and Dallas (www.nms-capital.com).

“David joined NMS not long after our spin-out from Goldman Sachs,” said Mr. Jordan. “He has been an integral part of the success of the firm, including the raise of NMS Fund II and the initial deployment of that fund in some great companies. We look forward to many future contributions from David.”

© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 5-3-16