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Water Street and JLL Merge Clinical Services Portfolio Companies

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Water Street Healthcare Partners and JLL Partners have merged their portfolio companies CCBR-SYNARC and BioClinica to create a global provider of specialty outsourced clinical services. CCBR-SYNARC was acquired by Water Street in April 2013 and JLL Partners acquired BioClinica in January 2013.

strothman nf“This merger creates a market leader uniquely positioned to support pharmaceutical companies with managing key components of their clinical trials,” said Peter Strothman, a Partner at Water Street.

Earlier this year, the two investment firms reached an agreement to merge the two companies and recruited Jeffrey McMullen, an executive with 40 years of experience in the drug development industry, to serve as chairman.

“Together, CCBR-SYNARC and BioClinica offer the industry’s most comprehensive clinical imaging program across all major therapeutic areas that can interact with any contract research organization. In addition, they offer complementary services and software solutions in the high-growth areas of patient recruitment and clinical development,” said Mr. Strothman.

Together, CCBR-SYNARC and BioClinica support pharmaceutical and biotechnology companies with a portfolio of outsourced services that include: medical imaging analysis and consultation that track the effectiveness of new drugs and medical devices across major therapeutic areas, including oncology, neurology, musculoskeletal and cardiology; patient recruitment through a network of 26 dedicated research centers that enroll and retain qualified patients from targeted geographies to participate in trials; software and consulting services that improve the efficiency and management of the drug development process; cardiovascular safety and efficacy that measure the effects of compounds under development on cardiac health, and; central Lab Services that analyze biological samples originating from Phase I-IV trials. BioClinica is based in Newtown, PA (www.bioclinica.com) and CCBR-SYNARC is headquartered in Copenhagen (www.ccbr.com).

agroskin nf“Pharmaceutical and biotechnology companies are increasingly turning to outside specialists to help them manage the cost and complexities of drug development. As one entity, CCBR-SYNARC and BioClinica offer a combination of scientific expertise, clinical trial experience and advanced technologies that solve challenges across the drug development continuum. Their solutions are proven to reduce clinical trial costs, shorten drug development time, and improve data quality and compliance,” said Dan Agroskin, partner, JLL Partners.

JLL Partners seeks to invest in companies across a range of manufacturing and service industries. Sectors of specific interest include healthcare services, medical products, food and consumer products, chemicals, broadcasting, transportation, automotive, industrial manufacturing, and distribution. JLL Partners is based in New York (www.jllpartners.com).

Water Street Healthcare Partners targets investments ranging from $50 million to $500 million in four health care sectors: distribution, medical products, health care services, and pharmaceutical products and services. The firm has particular expertise in corporate divestitures from healthcare companies. Water Street has more than $1 billion of capital under management and is based in Chicago (www.waterstreet.com).

© 2014 PEPD • Private Equity’s Leading News Magazine • 3-12-14

Z Capital Ups Investment in Real Mex

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real mex nfZ Capital Partners has acquired an equity stake of a non-strategic minority holder and increased its equity ownership of Real Mex Restaurants, a full service, casual dining Mexican restaurant chain. As a result of this transaction, Z Capital is now the largest shareholder of Real Mex.

Concurrent with this transaction, Real Mex has announced that James Zenni, Founder, President and Chief Executive Officer of Z Capital, has been named Chairman of the Real Mex Board of Directors.

“We are thrilled to become the largest shareholder of Real Mex,” said Mr. Zenni. “Since Charly Robinson was appointed as CEO, Real Mex has improved operations and efficiencies and the management team is laser focused on the current turnaround strategy to drive profitability and enhance customer relationships. We remain dedicated to supporting Real Mex and are confident that, with Charly and his talented management team, the company is positioned for future growth and success.”

Real Mex Restaurants is the largest full-service, casual dining Mexican restaurant chain operator in the United States with 121 company-owned and operated restaurants, as well as 14 franchised restaurants. Brands include El Torito Restaurants, Acapulco Mexican Restaurants, Chevys Fresh Mex Restaurants, El Torito Grill Restaurants, Las Brisas Restaurant in Laguna Beach, Sinigual Restaurant in New York City, Who Song and Larry’s in Vancouver, WA, and El Paso Cantina in Torrance, CA. The company’s Real Mex Foods division is a manufacturer of foodservice and private label products in addition to co-packing for other manufacturers. Real Mex is headquartered in Cypress, CA (www.realmexrestaurants.com).

“This is an exciting transaction for all of us at Real Mex,” said Charly Robinson, President and CEO of Real Mex. “Z Capital has been a dedicated partner since their initial investment in the company and is deeply committed to the company’s vision to revitalize the Real Mex brands. With the support of a seasoned financial sponsor we are continuing to develop our brands and expand into new markets.”

Z Capital makes control investments in middle-market distressed companies, operational turnarounds and special situations. The firm targets companies with an enterprise value of less than $1 billion or EBITDA of less than $100 million. Sectors of interest include consumer products, steel, steel processors, agricultural, gaming, leisure, real estate, manufacturing, specialty services and automotive. Z Capital Partners was formed by Mr. Zenni, the former President, co-owner and co-founder of Black Diamond Capital Management. Mr. Zenni co-managed the portfolios of Black Diamond from its inception in 1995 to approximately $9 billion in assets under management and divested his fifty percent equity ownership interest in Black Diamond in October 2006. Z Capital is based in Lake Forest, IL (near Chicago) and has an additional office in New York (www.zcap.net).

© 2013 PEPD • Private Equity’s Leading News Magazine • 11-12-13

Grey Mountain Ups Investment in Ajubeo

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ajubeo nfGrey Mountain Partners has made an additional investment in its portfolio company Ajubeo, a provider of virtual datacenters and cloud infrastructure-as-a-service.

The Ajubeo service offering includes virtual datacenters, virtual desktops, cloud-based disaster recovery, cloud-based data backup and restore, and cloud-based systems and application monitoring. Cloud hub locations include data centers in Denver, New York, and London, accessible via secure, private network connections from anywhere in the world. Ajubeo is headquartered in Boulder, CO (www.ajubeo.com).

The new capital will be used to support strong demand, 600% quarterly revenue growth over the past 12 months, for Ajubeo’s enterprise-class Virtual Datacenters, Virtual Desktops, Backup and Restore-as-a-Service and Disaster Recovery-as-a-Service. Specifically, the new capital will fund continued expansion in the New York Metro Area, new product development, staffing, and sales and marketing initiatives.

“The cloud infrastructure market continues to expand at a rapid pace,” said Chuck Price, president and CEO of Ajubeo. “The question is no longer whether infrastructure-as-a-service is a viable alternative to traditional methods. Instead, customers are architecting their IT-based products and services around a diversified cloud strategy. This shift has led to strong demand for high-performance, production-ready cloud services from providers such as Ajubeo.”

Grey Mountain Partners invests up to $75 million in control acquisitions of companies with enterprise values between $30 million and $150 million. Sectors of interest include aerospace & defense, building products & materials, business process outsourcing, diversified manufacturing, energy & power, financial services, food & beverage, healthcare services & technology, industrial services, packaging, professional services, specialty chemicals, technology, transportation & logistics, wholesale and distribution. Grey Mountain was founded in 2003 by Managing Partners Rob Wright and Jeff Kuo and is based in Boulder with an additional office in Minneapolis (www.greymountain.com).

“We are excited to support Ajubeo’s leadership team, Chuck Price and Colorado CIO of the Year Tom Whitcomb, as they expand and enhance their industry-leading cloud infrastructure offering,” said Marcello La Rocca, affiliate manager at Grey Mountain Partners. “Ajubeo continues to deliver on a strong business plan, providing performance-sensitive customers with a 100% uptime cloud solution that has been measured at twice the performance of current market share leaders such as Amazon Web Services.”

© 2013 PEPD • Private Equity’s Leading News Magazine • 8-22-13

Breakwater Invests in Consensus

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Breakwater Investment Management has provided a $7.75 million unitranche facility to Consensus Orthopedics, a manufacturer of hip and knee implants. Breakwater first invested in the company in February 2010.

The new facility, consisting of both a revolving working capital line of credit and a term loan, will be used to refinance the company’s existing bank facility and provide additional growth capital.

Consensus Orthopedics designs, manufactures, and distributes reconstructive total joint implants for the hip and knee. Products are sold throughout North America, Western Europe, Turkey, China, Japan, and Australia. Consensus Orthopedics was founded in 1992 and is headquartered in El Dorado Hills, CA (www.consensusortho.com).

“We are very excited to continue working in partnership with the professionals at Breakwater,” said Colleen Gray, CEO at Consensus. “Breakwater has consistently demonstrated its ability to provide flexible capital as our needs have changed throughout these growth years. The unitranche facility was the perfect financing solution to enable us to expand the reach of our products worldwide. We look forward to executing our business plan with the continued support of Breakwater.”

Breakwater Investment Management specializes in direct investments in small to lower middle market growth businesses with annual sales ranging from $5 million to $100 million. The firm serves as general partner of Breakwater Structured Growth Opportunities Fund, LP, a $100 million open-ended private investment partnership organized in August 2008. The fund’s investment objective is to generate both current income and capital appreciation through secured debt investments accompanied with equity participation rights, primarily in growth-oriented companies across a variety of industries. The firm is based in Los Angeles (www.breakwaterfund.com).

“Consensus has demonstrated strong, expansive growth throughout the past four years,” said Saif Mansour, Managing Partner at Breakwater. “We are delighted to increase our investment in Consensus and to continue supporting Colleen and her highly experienced management team, which has an excellent track-record of implementing new growth initiatives, optimizing cost structures, and entering new markets.”

© 2013 PEPD • Private Equity’s Leading News Magazine • 6-14-13

Superior Capital And Plymouth Ventures Invest in XanEdu

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Superior Capital and Plymouth Venture Partners have made an investment in XanEdu Holdings, a publisher of digital and printed coursepacks to students at colleges and universities. The new investment will enable XanEdu to expand the capabilities of its Folio-X platform and accelerate its growth initiatives including new publisher partnerships, content development, and custom publishing editorial services.

Superior Capital’s investment in XanEdu Holdings is made through NAPC Holdings, a platform company formed by Superior in 2009 to acquire the business and assets of National Archive Publishing Company. NAPC Holdings is comprised of two business lines: XanEdu and NA Publishing, a provider of periodical microfilm for public and academic research libraries.

XanEdu is a custom publisher of digital and printed coursepacks to students at colleges and universities. The company was founded in 1999 to serve the emerging digital custom publishing marketplace. XanEdu’s course materials are used by more than 630,000 students at 1,000 institutions. The company was founded in 1999 and has nearly 100 employees. XanEdu is headquartered in Ann Arbor, MI with additional offices in Louisville, KY and Acton, MA (www.xanedu.com).

“This combined investment from Plymouth and Superior provides XanEdu with the resources to accelerate the transformation of XanEdu into a dynamic e-learning company. Education is becoming more portable, more dynamic and more engaging. Students are demanding mobility, interactivity, and currency. We have the resources in place to assist instructors, students, and institutions in accessing greater choices and in providing greater flexibility in their learning materials at a lower price point than traditional solutions,” said Alar Elken, CEO of XanEdu.

Superior Capital Partners invests in niche manufacturers, value-added distributors and specialty service companies with annual revenues between $10 million and $150 million. Superior will invest up to $15 million of equity per transaction to facilitate management buyouts, corporate spin-offs, recapitalizations, family successions, acquisitions out of bankruptcy and debt purchases. The firm is based in Detroit (www.superiorfund.com).

“We’re honored that Mark Horne, Ian Bund and the rest of the Plymouth team share our belief in the growth potential of XanEdu,” said Mark Carroll, Superior’s Managing Partner. “During Superior’s ownership period, the company has transformed from a traditional provider of mostly print-based coursepacks to a provider of a wide variety of custom-developed solutions that are now delivered via the Folio-X digital platform. Plymouth provides us with an investment partner with deep experience in accomplishing aggressive growth initiatives in a technology driven market.”

Plymouth Venture Partners invests from $1 million to $4 million in companies throughout the Great Lakes Region. The fund invests in revenue producing companies with the potential for significant growth through a defined, catalytic event or milestone. The firm is based in Ann Arbor, MI (www.plymouthvc.com).

“We’re excited to be partnering with Superior and the XanEdu team,” said Mark Horne, Plymouth’s Chief Executive Officer. “Our due diligence revealed the proven potential for XanEdu to expand its leading position in the higher education custom textbook and e-learning market. We’re confident that they have the right strategy and management team in place to continue delivering on its mission.”

© 2013 PEPD • Private Equity’s Leading News Magazine • 4-15-13

KPS Capital Partners Recaps Waupaca Foundry

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KPS Capital Partners has completed a recap of its portfolio company Waupaca Foundry.  The proceeds of the recapitalization, funded by a $200 million upsizing of the company’s term loan, were used to fund a $200 million cash distribution to stockholders.

KPS acquired ThyssenKrupp Waupaca, Inc., which was renamed Waupaca Foundry, Inc., from ThyssenKrupp Budd Company in June 2012.  Waupaca Foundry is the largest iron foundry company in the world and produces gray and ductile iron castings using state-of-the-art technology. Waupaca is a  North America’s leading supplier of iron castings to the automotive, truck, agriculture, construction, hydraulics and commercial vehicle markets.  The company operates six manufacturing facilities located in Wisconsin (4), Indiana, and Tennessee. The company employs approximately 3,700 people and is headquartered in Waupaca, WI (www.waupacafoundry.com).

“Waupaca is now a thriving independent company under KPS’ ownership, and we are pleased to return capital to our stockholders. This recapitalization validates the successful transformation of Waupaca that was achieved in a very short period of time,” said Gary Gigante, Chief Executive Officer of Waupaca.  “Our conservative capital structure and the financial support of our stockholders provide us with the resources to support our customers and grow aggressively, both organically and through acquisitions.”

Financing for the transaction was provided by a syndicate of banks and institutional investors with GE Capital Markets acting as Lead Arranger.  RBC Capital Markets acted as special advisor to KPS.

KPS Capital Partners is the manager of the KPS Special Situations Funds, a group of private equity funds with over $2.5 billion of committed capital focused on investing in restructurings, turnarounds and other special situations. KPS has created new companies to purchase operating assets out of bankruptcy; established stand-alone entities to operate divested assets; and recapitalized highly leveraged public and private companies. The KPS investment strategy targets companies with strong franchises that are experiencing operating and financial problems. KPS portfolio companies, as of September 30, 2012, have aggregate annual revenues of approximately $6.8 billion, operate 85 manufacturing plants in 25 countries, and employ over 29,000 associates, directly and through joint ventures worldwide.  KPS Capital Partners is headquartered in New York (www.kpsfund.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 2-11-13

Warburg Pincus Merges Keystone Dental with Southern Implants

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Keystone Dental, a provider of dental implant technologies and a portfolio company of Warburg Pincus, and Southern Implants, also a dental implant company, today announced that the two companies have merged. The combined entity will retain the name Keystone Dental.

Michael Kehoe is the President and Chief Executive Officer (CEO) of the newly merged company and the former CEO of Southern Implants. The new management team will be comprised of individuals from both Keystone and Southern Implants. The merged company will maintain headquarters in Burlington, MA and will continue to operate its other manufacturing facility in Irvine, CA.

“The merger of Keystone Dental and Southern Implants represents an excellent strategic fit for the two companies,” said Mr. Kehoe. “The combination of Keystone’s portfolio of industry-proven biomaterials and dental implants with Southern’s unique dental implant systems for both the esthetic zone and molar regions provides the merged company with a greatly expanded product range for the dental implant community.”

Keystone Dental was launched in 2006 by Warburg Pincus and represents the continuation of the business of Lifecore Biomedical, a participant in the dental implant market since 1990. Keystone Dental’s product portfolio includes Genesis, The Biomimetic Implant System, The Prima Implant System, DynaMatrix Extracellular Membrane, DynaBlast and DynaGraft bone graft substitutes, and Accell Connexus, a bioactive bone grafting product. The company is headquartered in Burlington, MA (www.keystonedental.com).

Southern Implants provides implant surgeons and restorative dentists with a range of implants and restorative components. Southern Implants was established in 2006 to commercialize in North America, South America and Asia, dental implant technologies that have been sold in Europe and other parts of the world for over two decades. The company is headquartered in Irvine, CA (www.southernimplants.us).

Warburg Pincus has more than $30 billion in assets under management and has raised 13 private equity funds which have invested more than $40 billion in approximately 650 companies in 30 countries. The firm was founded in 1966 and is headquartered in New York with offices in Amsterdam, Beijing, Frankfurt, Hong Kong, London, Luxembourg, Mauritius, Mumbai, San Francisco, Sao Paulo and Shanghai (www.warburgpincus.com).

ACON and MidOcean Merge Fairway Outdoor and Olympus Media

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ACON Investments and MidOcean Partners announced today that they have merged their respective portfolio companies, Fairway Outdoor Advertising and Olympus Media, to form Fairway Media Group. “We believe this transaction will drive tremendous growth and value,” said Ken Brotman a Founding Partner of ACON. “The combined company will have the increased scale and market presence to continue growing and investing in new technologies.”

The combined company has more than 21,300 bulletin and poster displays in 17 states across the Southeast and Midwest and is now the fourth largest traditional outdoor advertising company in the U.S. The company will be headquartered in Greenville, SC (www.fairwayoutdoor.com) (www.olympusmediallc.com).

Mark Moyer, the current Chief Executive Officer of Fairway Outdoor, will be the Chief Executive Officer of Fairway Media. “Fairway Outdoor is excited about combining with Olympus to more fully exploit the growth opportunities available in the outdoor advertising industry including digital technology, new measurement systems, tuck-in acquisitions and other future growth opportunities,” said Mr. Moyer. “Building on the success that both Fairway Outdoor and Olympus have achieved to date, we believe this combination represents an excellent opportunity for the employees, customers, shareholders, local communities and other key stakeholders in Fairway Media.”

ACON Investments manages private equity funds and special purpose partnerships in the US and Latin America. ACON pursues a theme-based investment strategy by focusing on industries and businesses at key inflection points in their development and pursues these opportunities in close partnership with established management teams. ACON has offices in Washington, Los Angeles, Madrid, Mexico City and Sao Paulo (www.aconinvestments.com).

MidOcean Partners is a private equity firm focused on the middle market. MidOcean seeks companies with stable market positions and multiple opportunities for growth. Industries of interest include consumer, media and communications, business and financial services and industrial services. The firm has offices in New York, NY and London, UK (www.midoceanpartners.com).

“We are excited about merging Olympus with Fairway Outdoor to create a truly unique asset within the outdoor advertising industry. We believe there are numerous opportunities to continue to grow Fairway Media both organically and through acquisition, in both existing and new markets,” said Tyler Zachem, Managing Director at MidOcean.

Hogan Lovells served as legal advisor to ACON. Kirkland & Ellis served as legal advisor to MidOcean.

Palamon Completes Dividend Recap of Cambridge Education Group

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April 30, 2012 – Palamon Capital Partners has concluded a transaction with Royal Bank of Scotland to provide a £23 million financing package for its portfolio company Cambridge Education Group which includes a dividend recapitalization for equity holders and additional debt financing for continued growth.  The strength and profitability of Cambridge Education Group has allowed the company to secure a financing package including capital expenditure financing, mortgage backed and revolving credit facilities which will support its future growth. The financing has also enabled the repayment of Palamon’s initial capital plus a return of over 50%.  Palamon and the management team continue to own a significant majority shareholding in the company.

“RBS has worked extensively with Palamon and have a good understanding of their growth investing model. We are therefore delighted to provide support to Cambridge Education Group, a fast growing and highly successful UK business. Under the leadership of a very strong management team CEG has clear drivers for future growth, which RBS is committed to supporting into the future,” said Peter Talbot Managing Director, Financial Sponsors, Midlands at Royal Bank of Scotland.

Cambridge Education Group (“CEG”) is a UK provider of pre-University foundation programs and English language training principally to foreign students keen to attend UK universities. Having identified the growing attractiveness of British education to international students Palamon acquired CEG in 2007 in partnership with a new management team led by Fergus Brownlee. Since that time, CEG has tripled revenue organically to £55 million by expanding its teaching capacity.  Overall the number of students taught on an annual basis has more than quadrupled from 460 at the time of investment to more than 2,000 today.

“With Palamon’s financial and strategic support we have been able to execute an organic growth strategy that has tripled the size of the business in five years. With the additional backing of RBS we now have in place the facilities and capital structure to underpin the next stage of our development. We are delighted to have secured this backing,” said Fergus Brownlee, CEO of CEG.

This is the third dividend recapitalization that Palamon Capital Partners has completed since 2009.  As Palamon’s growth investment strategy typically utilizes modest levels of initial leverage, recapitalizations have successfully been used to return capital once a business has achieved scale. In every case Palamon has maintained a stake in the on-going businesses as they enter a period of accelerated growth.

“With Cambridge Education Group, we have supported a well positioned company to execute a remarkable growth strategy. The business is on a clear path to continue increasing profitability significantly over the coming years by further developing its teaching capacity and enlarging its footprint,” said Dan Mytnik, Partner at Palamon Capital Partners.

Palamon Capital Partners was established in 1999 and makes investments of between €10 million and €80 million service-orientated businesses throughout Europe.  Particular areas of interest include: media and communications; financial services; leisure and entertainment; business services; information technology; and healthcare.  The firm has €1.1 billion of funds under management and is based in London, UK (www.palamon.com).

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