Archives for September 26, 2017

JMI Exits AutomotiveMastermind

by

Publicly-traded IHS Markit has acquired 78 percent of AutomotiveMastermind for a purchase price of approximately $392 million. An additional $43 million of consideration can be earned based on post-closing operating performance. IHS Markit will acquire the remaining 22 percent over the next five years.

AutomotiveMastermind,  a portfolio company of JMI Equity since November 2016, provides cloud-based software that is used by automotive dealers to predict automobile-buying behavior and it also automates the creation of customer communications in order to increase product sales and improve retention rates. The company’s software products are used by more than 1,000 dealers across 15 automotive brands including Mercedes-Benz, BMW, MINI, Audi, Cadillac, Honda, Lexus, and Acura. AutomotiveMastermind was founded in 2012 by Johannes Gnauck and Marco Schnabl and is headquartered in New York with a product innovation office in San Francisco (www.automotivemastermind.com).

“Through our core automotive assets, which includes CARFAX, we already provide our global automotive customers with a comprehensive suite of information services and analytics,” said Jonathan Gear, Executive Vice President of Transportation and Resources for IHS Markit. “The addition of AutomotiveMastermind extends our capabilities further. It enables us to deliver a powerful set of tools — including data aggregation and analytics driven by machine learning — that will help OEMs and dealers sell cars more effectively.”

IHS Markit (NASDAQ: INFO) is a provider of data, information and analysis to businesses and governments in the aerospace, defense and security; automotive; chemical; energy; maritime and trade; and technology industries. The company has more than 50,000 business and government customers, including 85 percent of the Fortune Global 500. IHS Markit had revenues of more than $2.7 billion in 2016 and is headquartered in London, UK (www.ihsmarkit.com).

“The acquisition of AutomotiveMastermind opens up a key new market for IHS Markit, and increases our presence in the vehicle retail space,” said Jerre Stead, the Chairman and CEO of IHS Markit. “It’s an excellent strategic fit for us within our overall portfolio, and helps to fill out our existing offerings by leveraging predictive analytics to improve the buyer experience. We now deliver unparalleled insight and analytics across the automotive lifecycle: from vehicle strategy and product planning, to vehicle sales, marketing and repair.”

JMI Equity invests from $15 million to $100 million of growth equity in software and technology-enabled services companies. Founded in 1992, JMI has invested in more than 130 businesses and has raised over $3 billion in committed capital. The firm has offices in San Diego and Baltimore (www.jmi.com).

Jefferies was the financial advisor to AutomotiveMastermind and Goodwin Procter provided legal services.

© 2017 Private Equity Professional | September 26, 2017

Blue Wolf Buys StateServ

by

Blue Wolf Capital Partners has acquired StateServ Holdings, a provider of durable medical equipment to hospices and other post-acute care service providers.  Under Blue Wolf ownership, StateServ’s CEO Paul DiCosmo and other members of the management team will continue to lead the company and have maintained a significant equity stake in the company.

StateServ has a national network of 1,300 durable medical equipment provider locations, along with 21 company-owned warehouse facilities, that serves more than 550 hospice providers in 46 states. Durable medical equipment (DME) includes wheelchairs, hospital beds, traction equipment, canes, crutches, walkers, kidney machines, ventilators, oxygen, monitors, pressure mattresses, lifts, and nebulizers. StateServ also provides its hospice customers with a real-time automated DME ordering and tracking system which integrates with both hospice medical records and accounting systems to improve workflow, administration and management of the DME process. StateServ was founded in 2004 by Anthony Perre and is headquartered in Tempe, AZ (www.stateserv.com).

“Blue Wolf’s investment, along with its operational expertise, will allow us to improve and expand our proprietary software solution DMETrack which provides workflow automation, real-time reporting, and analytics to optimize operational, clinical, and financial performance for our customers,” said Mr. DiCosmo. “We will continue to add DME providers to our national network, and we expect to expand into other post-acute care segments.”

“StateServ has longstanding recurring contracts with its customers, who have come to rely on the scalable, single point of entry cost containment system that helps them track, manage and service equipment that contributes to their patients’ daily well-being,” said Adam Blumenthal, Managing Partner of Blue Wolf. “The company’s technological advantage and commitment to innovation and quality will serve it well as it pursues a range of value-building initiatives, including strategic acquisitions. This is a signature Blue Wolf investment, and we look forward to building the company as we grow our footprint in this exciting market.”

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 raising its fourth fund with a target of $525 million. The firm is headquartered in New York (www.blue-wolf.com).

“An aging population and widespread demand for compassionate hospice care and skilled nursing have created a growing need for the products and technology StateServ offers,” said Jeremy Kogler, a Principal at Blue Wolf. “StateServ not only provides the equipment, but has pioneered a benefit management system that enables clinicians to focus on their primary role – patient care. This is a unique opportunity for Blue Wolf to invest in a platform with a market leading position in a rapidly consolidating industry. We are excited to work with CEO Paul DiCosmo and his team to further enhance the value of the business.”

TripleTree (www.triple-tree.com) was the financial advisor to StateServ on this transaction.

© 2017 Private Equity Professional | September 26, 2017

Salt Creek Acquires Corporate Caterers

by

Salt Creek Capital has acquired Corporate Caterers, a franchisor of corporate catering services throughout the United States.

Corporate Caterers has 20 operating franchises and two company owned businesses. The company was founded in 1997 and operates its branded services and systems through franchise partners in Texas, Georgia, Ohio, Pennsylvania, Florida, Tennessee, North Carolina, Arizona, Colorado, Wisconsin, Kansas and Kentucky. Corporate Caterers is headquartered in Miami (www.corpcaterers.com).

The founders of Corporate Caterers, Dennis McGinley and Jim Gass, will maintain an ownership position in the company and will work with incoming CEO Greg Halton to manage the company owned locations and to support the franchise network.

“Jim and Dennis built an exceptional business, and we are delighted they chose to work with us during the company’s next phase of growth,” said Dan Mytels, Managing Director of Salt Creek Capital. “The company’s strong foundation and proven model combined with Greg’s demonstrated leadership are a compelling fit, and we look forward to supporting the company’s expansion in the coming years.”

Mr. Halton joined Salt Creek Capital as an Executive Partner in 2016. From 2004 to 2015, he was the President and CEO of Event Rental Group, a provider of party related equipment, furniture and supplies. Event Rental Group was acquired by its main competitor Chair-man Mills, a portfolio company of Toronto-based Granite Partners, in August 2015. Prior to Event Rental Group, Mr. Halton was the VP and General Manager of National Carpet Mills of Canada, a vertically integrated plastics and textile manufacturing company, from 1998 to 2004.

“Corporate Caterers offers great food and outstanding service, and I look forward to working with the team towards continued success,” said Mr. Halton. “The company’s franchise model has demonstrated solid growth, and we are eager to open new locations and expand our footprint across the US.”

Salt Creek invests in executive-led buyouts of companies with up to $100 million in revenue and EBITDA from $750,000 to $5 million. Sectors of interest are varied making the firm nearly industry agnostic but areas of specific interest include manufacturing, business and consumer services, distribution, and franchisors. The firm is based in Menlo Park (www.saltcreekcap.com).

© 2017 Private Equity Professional | September 26, 2017

Riverside Exits G&H Orthodontics

by

The Riverside Company has sold G&H Orthodontics, a manufacturer and distributer of orthodontic components, to Altaris Capital Partners.

G&H’s products include orthodontic brackets, bands, tubes, wires, springs, elastomerics, and other consumable supplies. The company sells its products throughout the US and to customers in more than 90 other countries. G&H was founded in 1976 and is headquartered just south of Indianapolis in Franklin, IN (www.ghorthodontics.com).

The Riverside Company acquired G&H Orthodontics in December 2010 from the Edgewater Funds. During the course of its ownership, Riverside completed two add-on acquisitions that added new product lines and distribution channels to the company as well as new customers and cross-selling opportunities. The largest add-on was the August 2012 acquisition of Vista, CA-based Orthodontic Design and Production, a manufacturer of orthodontic brackets, bands and buccal tubes.

“G&H was poised for both organic and add-on growth at the time of our investment,” said Riverside Managing Partner Suzy Kriscunas. “We were able to partner with a strong management team and provide the capital and expertise to get them to the next level.”

The Riverside Company is a global private equity firm focused on investing in and acquiring growing businesses valued at up to $400 million. Since its founding in 1988, Riverside has invested in more than 480 transactions and its portfolio includes more than 80 companies. The firm is headquartered in New York with 16 additional US and international offices (www.riversidecompany.com).

“We were able to identify ways to strengthen customer relationships and channels, improve pricing and expand G&H’s unique product offerings,” said Riverside Partner Meranee Phing. “Riverside also helped G&H implement metrics-driven management, consolidate the company’s physical footprint and drive significant manufacturing efficiencies.”

Working with Ms. Kriscunas and Ms. Phing on the transaction for Riverside were Vice President Conner Harris, Senior Associate Marc Baudry, Senior Associate John Ribble, Operating Partner George Benson and Finance Executive Allison Zabransky.

Altaris Capital Partners, the buyer of G&H Orthodontics, invests from $15 million to $50 million of equity in companies that operate across the healthcare industry, including the pharmaceuticals, medical devices, services and IT sectors. The firm is headquartered in New York (www.altariscap.com).

Piper Jaffray (www.piperjaffray.com) and Houlihan Lokey (www.HL.com) advised Riverside on this transaction.

© 2017 Private Equity Professional | September 26, 2017