John McNulty

Mid Oaks Acquires Jet Plastica Industries

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D&W Fine Pack, a foodservice packaging provider and a portfolio company of Mid Oaks Investments, has acquired Jet Plastica Industries, a manufacturer of food service supplies. “We are pleased to be joining forces with the Jet Plastica team,” said Mark Staton, President and Chief Executive Officer, D&W Fine Pack. “There are tremendous synergies between our product offerings, and we look forward to serving our new customers and providing an expanded suite of products to the market.”

Jet Plastica manufactures plastic cutlery, straws, stirrers and meal kits to for the foodservice industry. The company has manufacturing facilities in Hatfield, PA (headquarters) and Fowler, CA. D&W Fine Pack will continue operations in both plant locations (www.jetplastica.com).

D&W Fine Pack manufactures foodservice and food packaging products including tableware, containers, cutlery, straws, and meal kits. The company is based in Fountain Inn, SC (www.dwfinepack.com).

Mid Oaks makes control and non-control investments in companies with annual revenues of $25 million to $250 million. The firm has a preference for manufacturing companies but will also consider distribution or service company opportunities. The firm was founded in 1986 and is based in Buffalo Grove, IL (www.midoaks.com).

Investcorp Acquires Lerman Container

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Berlin Packaging, a supplier of plastic, glass, and metal containers and closures and a portfolio company of Investcorp, today announced the acquisition Lerman Container. This transaction marks Berlin Packaging’s third strategic acquisition since 2010 when the company acquired Pittsburgh-based All-Pak and Chicago-based Continental Packaging Solutions.

Lerman is a distributor of plastic and glass bottles, plastic and metal closures and dispensing systems and other related packaging products. The company was founded in 1979 and is based in Naugatuck, CT (www.lermancontainer.com).

Berlin Packaging is a stocking supplier of plastic, glass, and metal containers and closures. Berlin Packaging supplies billions of containers and closures, as well as design, labeling, filling, and sourcing services. The company serves national and private-label brands in a multitude of markets including personal care, pharmaceutical and health care, food and beverage, chemical and industrial, veterinary, and laboratory. Revenues are approximately $500 million. The company is based in Chicago, IL and has more than 100 salespeople and over 40 sales and warehouse locations across the United States (www.berlinpackaging.com).

“The closer we can get to customers geographically, the faster we can serve them and the more attention we can give them. This acquisition makes that possible by adding local presence in important markets as well as top packaging talent and deep vertical industry expertise,” said Andrew Berlin, Chairman and CEO of Berlin Packaging. “As always, our goal is to help customers increase their net income by optimizing their packaging costs, operations efficiency, and shelf impact. Bringing the Lerman team into our organization strengthens our ability to do that.”

Investcorp invests in mid-size companies operating in a wide 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. The group has offices in London, UK and New York, NY (www.investcorp.com).

Olympus Partners Acquires Assured Packaging

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PLZ Aeroscience, a portfolio company of Olympus Partners, has acquired Assured Packaging, a custom manufacturer of aerosols. “We are excited about this add-on acquisition as it continues to leverage PLZ Aeroscience as a platform for growth in the custom aerosol packaging sector, now with a solid footing in the household and personal care market,” said Manu Bettegowda of Olympus Partners.

Assured is Canada’s leading custom manufacturer of aerosols for the health and beauty aids, pharmaceutical, food and household market categories. The company operates a 100,000 sq. ft. facility in Mississauga, Ontario and produces approximately 90,000,000 cans a year (www.assuredpackaging.com).

PLZ Aeroscience is a manufacturer and marketer of specialty aerosol products. The company formulates, blends, fills and packages more than 2,500 brand and private label products, including industrial solvents, lubricants and degreasers, adhesives, sanitary supply disinfectants, insecticides, cleaners, polishes, air fresheners, and personal care items. The company is headquartered in St. Clair, MO (www.plzaeroscience.com).

Olympus Partners with $3 billion of capital under management provides equity capital for middle market management buyouts and for companies needing capital for expansion. Sectors of interest include: business services; transportation and logistics services; healthcare manufacturing and services; financial services; consumer and restaurant; and software and IT services. The firm is based in Stamford, CT (www.olympuspartners.com).

River Associates Investments Closes Sixth Fund at $222 Million, Exceeding Target

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River Associates Investments has held a final closing of its sixth investment fund with $222 million in commitments, exceeding its initial target of $200 million and more than twice as large as the firm’s fifth fund which had $110 million in commitments.

River Associates received strong support from its existing investors, with almost all of them making a capital commitment to River VI. In addition, River VI attracted commitments from new investors including internationally recognized insurance companies, endowments, pension plans and private equity fund-of-funds. As they have in prior funds, the partners of River Associates made significant personal capital commitments to River VI.

River VI will continue River Associates’ (RAI) strategy of control buyouts of lower middle market companies. The firm generally targets investments in platform companies with $3 million to $10 million of EBITDA located in the U.S. or Canada. RAI has invested in companies located in 20 different states and two Canadian provinces. As to industry preference, the firm is generally industry agnostic but has specific interest in the manufacturing, distribution, industrial service, business service and select specialty retail sectors.

“We sincerely appreciate the support of our existing and new investors who see value in our time-tested track record and strategy”, said Mark Jones, Partner of RAI. “We are focused on continuing to differentiate ourselves with our longstanding tenure of supporting management teams of lower middle market companies. We have always believed that all of our investments are equally important since behind each investment are management co-investors and numerous employees who look to us as economic and strategic partners. The larger fund size will allow us to acquire platform companies at the top end of our $3 million to $10 million EBITDA range as well as effect numerous add-on acquisitions.”

Founded in 1989, River Associates has completed 71 investments, including platform and add-on opportunities. The firm has generated strong returns for its investors and portfolio company management teams, the latter of whom are often meaningful investors in their respective companies. The firm has focused on earnings growth over financial engineering to generate returns.

“We are pleased that we have already been able to invest almost $50 million of River VI capital prior to the final closing and we are excited to now solely focus on identifying new platforms as well as working to grow existing River VI portfolio companies,” said Mike Brookshire, Partner of RAI. “Our current platforms include such diverse companies as National Deli (deli meats), KK Precision (complex components for gas turbines), Omega Environmental Technologies (aftermarket automotive truck and off-road air conditioning parts) and Industrial Magnetics (permanent and electromagnets for work holding, lifting, fixturing, conveying and magnetic separation applications) and we hope to complete strategic add-ons for all of these businesses.”

Proskauer Rose served as fund counsel for River VI. LB Group acted as placement agent for certain limited partner interests.

River Associates Investments was founded in 1989. In addition to Mark Jones and Mike Brookshire, RAI partners include Jim Baker, Patten Pettway and Craig Baker. The firm is based in Chattanooga, TN with an additional office in Santa Fe, NM (www.riverassociatesllc.com).

Five Megatrends Driving Technology M&A

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Aggregate deal value of global technology mergers and acquisitions fell 12% year-on-year to $25.1 billion in the first quarter of 2012. This was only half the value decline of M&A in all industries, as ongoing economic uncertainty continues to take its toll on global deal-making. Private equity deal values for technology, meanwhile, climbed 171% year-over-year in the first quarter of 2012, despite falling significantly in all other industries, according to the latest Ernst & Young’s Global technology M&A update.

The total unit volume of transactions in Q1 was 756 up just 1% from 748 in 2011. Quarterly deal volume appears to have reached a plateau after two years of strong growth in 2009 and 2010 — for the last five quarters the number of deals has ranged from a low of 722 to a high of 756.

“Even though technology M&A activity is down year over year, it’s doing a lot better than M&A in other industries. During the first quarter of 2012, the same disruptive megatrends that have been fueling global technology M&A since 2009 are now sustaining technology M&A against the continuing macroeconomic pressures that are holding back other industries. And the long-term outlook for technology M&A remains positive because those megatrends represent the driving force of disruptive innovation that is revitalizing and reshaping the technology industry,” said Joe Steger, Global Technology Industry Transaction Advisory Services Leader at Ernst & Young.

According to Mr. Steger there are five long-term “megatrends” that are generating disruptive innovation in technology and leading to technology-enabled innovation in other industries. They are smart mobility, cloud computing, social networking, “big data” analytics and a growing sense of “blur” and convergence, as technology sectors come together and the technology industry enters other industries as enabling innovation. In addition, all five megatrends are driving increased information security requirements.

Online video, SaaS deals surge
Though the Q1 technology report details many influential deal-driving factors, the biggest increases in transaction volume came from deals targeting online video technology and SaaS companies. These also generated the largest deals of Q1 by dollar value. These were a $5 billion transaction targeting technology that can relay video to mobile devices and a $2 billion deal targeting a provider of workforce management SaaS. In China, meanwhile, the country’s largest video website announced a $1.1 billion agreement to acquire its chief rival.

At the same time, a multitude of smaller transactions demonstrated that both online video and SaaS deal-driving trends have widespread strength, according to the report. Similar deal volume strength was seen in mobile applications, health care information technology, advertising/ marketing technologies, patents, social networking and “big data” analytics deals.

Despite a typical fourth-to-first-quarter dip, the report shows that the year over year value of disclosed private equity deals soared 171% to $5.8 billion, mostly in three big-ticket deals. This continues a three-year private equity growth trend.

The increasing reliance on technology of companies throughout the economy, combined with the developing maturity of technology companies themselves, is attracting more private equity firms to technology transactions. Increasing private equity activity is changing the global technology M&A landscape by increasing the competition for deals and by providing better exit opportunities for corporate divestiture of non-core assets, according to the report.

“The decline in first quarter deal value confirms our expectation that macroeconomic pressures will hold global technology M&A activity to flat or slow growth in 2012,” said Mr. Steger. “But the fact that technology M&A is off to a much stronger start than in most other industries demonstrates once again that ‘social-mobile-cloud,’ ‘big data’ and ‘blur’ are driving strategic transactions and enabling innovation throughout the global economy. And over the long-term, M&A growth will remain a relatively safe bet for the technology industry because of these megatrends,” added Mr. Steger.

Babson Capital Backs Baby Jogger

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Babson Capital Management has provided $18.4 million of subordinated notes and $1.5 million of equity to support The Riverside Company’s recent acquisition of The Baby Jogger Company, a designer and marketer of infant and juvenile products. “Our long relationship spans more than a decade and numerous successful investments, and Babson Capital has proven itself to be a value-added partner both as a lender and an investor,” said Riverside Partner Karen Pajarillo. “The familiarity and trust we have developed translates into an ease of working together that enabled us to complete the recapitalization of Baby Jogger on an expedited timeline.”

Baby Jogger is a designer and marketer of branded infant and juvenile products focused on baby strollers, bicycle trailers and related accessories. The company was founded in 1984 and is based in Richmond, VA (www.babyjogger.com).

“Baby Jogger is a market-leading brand with a strong management team and a demonstrated ability to successfully launch new products,” said Mike Klofas, managing director and head of the Mezzanine and Private Equity Group at Babson Capital. “Riverside’s expertise in branded consumer products will help the company achieve its exciting growth potential. Babson Capital is pleased to partner with The Riverside Company once again, and we look forward to working together on future investments soon.”

The Riverside Company is a private equity firm focused on the smaller end of the middle market (“SEMM”). Riverside specializes in investing in SEMM companies (those valued up to $200 million) and partners with management teams to build companies through acquisitions and value-added growth. Since 1988, the firm has invested in 280 transactions with a total enterprise value of more than $6 billion. The firm is headquartered New York with additional offices in Atlanta, Chicago, Cleveland, Dallas, Los Angeles, San Francisco, and London (www.riversidecompany.com).

Babson Capital manages about $4 billion in direct and indirect mezzanine and private equity assets and commitments and has $143 billion in assets under management as of March 31, 2012. Babson Capital, a member of the MassMutual Financial Group, is based in Boston and Springfield, MA and Charlotte, NC. The firm has six additional offices in the US and one in Sydney, Australia, with subsidiaries in London and Tokyo (www.BabsonCapital.com).