Business Services

Sageview Invests in NAM

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Sageview Capital has made a growth equity investment in National Arbitration and Mediation (NAM), a provider of alternative dispute resolution services.

Alternative dispute resolution (ADR) is a timely and cost-effective alternative to litigation, allowing parties to resolve their disputes without a trial. More than 75% of NAM-administered cases result in the resolution of all outstanding issues.

NAM’s services include arbitration, mediation, online and offline case management, trial preparation services, mock jury trials, and dispute resolution training. The company’s clientele is diverse and no one entity represents more than 2% of NAM’s revenues. NAM works with more than 8,000 commercial entities, including more than 50% of Fortune 100 companies and maintains a nationwide panel of nearly 2,000 former judges and practicing specialists. In 2016, NAM was named Best ADR firm in the United States by the National Law Journal’s Annual Reader Rankings Survey. The company was founded in 1992 and is headquartered on Long Island in Garden City, NY (www.namadr.com).

“NAM is exceptionally well positioned as a market leader within the rapidly expanding ADR field,” said Scott Stuart, partner at Sageview Capital. “Sageview is focused on providing growth capital to leading companies with demonstrated track records of success and compelling market opportunities. We look forward to partnering with NAM and supporting its tremendous management team as they expand the company’s core capabilities and accelerate growth.”

“We see increasingly high demand for NAM’s dispute resolution services and the business is growing at a record pace, particularly with respect to complex commercial, construction and employment matters,” said Roy Israel, President and CEO of NAM. “Sageview is an ideal investment partner at this stage of our evolution, and we look forward to expanding our team and building out a broad sales and marketing platform to help accelerate the growth of our business and extend our market leadership position.”

Sageview Capital provides growth capital of $20 million to $75 million to small and mid-sized companies in the technology, business services, and financial services sectors. The firm was founded in 2006 and is led by Ned Gilhuly and Scott Stuart, former partners of Kohlberg Kravis Roberts (KKR) and Dean Nelson, former head of KKR Capstone. Sageview Capital has offices in Greenwich, CT and Palo Alto, CA (www.sageviewcapital.com).

© 2017 Private Equity Professional | January 23, 2017

LNC Partners Buys OutSolve

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LNC Partners has acquired OutSolve, a provider of affirmative action planning and compliance services to federal contractors. Five Points Capital co-invested alongside LNC Partners.

OutSolve’s services are used by government contractors to meet the requirements of Executive Order 11246, the Vietnam Era Veteran Readjustment Assistance Act (VEVRAA), and Section 503 of the Rehabilitation Act of 1973, among other regulations. Services include developing Office of Federal Contract Compliance Programs (OFCCP) compliant affirmative action plans, offering OFCCP audit support, and creating EEO-1 reports that comply with the requirements of the US Equal Employment Opportunity Commission. OutSolve was founded in 1998 and is based near New Orleans in Metairie, LA (www.outsolve.com).

LNC Partners invests from $4 million to $20 million in companies that have at least $10 million of revenue and at least $2 million of cash flow. Sectors of interest include business and information services; financial and insurance services; healthcare services; and niche manufacturing. LNC is a licensed Small Business Investment Company and has over $235 million of capital under management. The firm is based in Reston, VA (www.lnc-partners.com).

Five Points Capital invests equity and subordinated debt in lower middle market buyout, acquisition, growth, and recapitalization transactions as a control investor on a standalone basis or as a co-investor with other financial sponsors.  Sectors of interest include business, healthcare and industrial services; niche manufacturing; value-added distribution; and education and training. The firm is headquartered in Winston-Salem, NC (www.fivepointscapital.com).

© 2016 Private Equity Professional • 11-17-16

Silver Oak Sells Direct Travel to ABRY

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Silver Oak Services Partners has completed the sale of its equity interest in Direct Travel to ABRY Partners. Silver Oak made its original investment in Direct Travel in September 2011.

Direct Travel is a provider of corporate travel management services to mid- to large-sized corporate accounts. Services include booking and managing employee air travel, transportation and accommodations. Direct Travel is led by Ed Adams, CEO and has over 900 employees in 39 offices in 16 states. The company is headquartered in Denver (www.dt.com).

During Silver Oak’s term of ownership, Direct Travel completed 12 acquisitions which expanded the company nationally. To take advantage of its larger scale, Silver Oak worked with the management team to renegotiate supplier contracts, expand cross-selling services, and move toward a common IT platform.

“Silver Oak has been an excellent partner over the past four years,” said Mr. Adams. “The leadership team at Silver Oak provided us with tremendous advice, support and mentoring throughout our partnership. Under Silver Oak’s stewardship, Direct Travel enjoyed substantial growth.”

Silver Oak makes control investments of $10 million to $30 million in companies with revenues from $15 million to $150 million and EBITDAs from $3 million to $20 million. Sectors of interest include business, healthcare, and consumer services.  Silver Oak is based in the Chicago suburb of Evanston (www.silveroaksp.com).

ABRY Partners, the buyer of Direct Travel, 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, $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).

William Blair & Company (www.williamblair.com) was the financial advisor to both Direct Travel and Silver Oak.

© 2015 PEPD • Private Equity’s Leading News Magazine • 12-4-15

McCarthy Exits Benaissance

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McCarthy Capital has sold its equity interest in Benaissance, a provider of outsourced business services, to Evolution1, a wholly-owned subsidiary of publicly traded WEX. McCarthy Capital first invested in Benaissance in 2008.

Benaissance provides health insurance premium billing and payment collection services and other outsourced services for insurance carriers, private exchanges, state health and human services and benefit administrators. The two major product lines of Benaissance include ExchangePoint, which provides financial management services to public and private health insurance exchanges for employers and individuals, and COBRApoint, which provides financial management, benefits administration and payment processing for individual subscribers. Benaissance was founded in 2006 and is headquartered in Fargo, ND (www.benaissance.com).

“This sale represents the culmination of a long-term and successful partnership between McCarthy Capital and Benaissance,” said Patrick Duffy, President and Managing Partner at McCarthy Capital. “This investment has highlighted McCarthy Capital’s commitment to growing businesses in partnership with management teams retaining a significant ownership position, and we’re excited to watch Benaissance in its next stage of growth with WEX and Evolution1.” Over the past few years Benaissance and Evolution1 have built a working relationship and already share a number of mutual partners and customers.

Evolution1 provides healthcare and reimbursement account services – including Defined Contribution, HSAs, HRAs, FSAs, VEBAs, PRAs, Wellness, and Transit Plans – to more than 75,000 employers and more than 9,000,000 consumers. Customers include health plans, third-party administrators, financial institutions, and software providers.  Evolution1, headquartered near Minneapolis in Edina, MN (www.evolution1.com), is a subsidiary of WEX (NYSE:WEX), a provider of payment processing and information management services headquartered in South Portland, ME (www.wexinc.com).

“This transaction closes a very successful partnership with McCarthy Capital and opens a new and exciting chapter in Benaissance’s growth story,” said John Jenkins, founder and CEO of Benaissance. “Benaissance could not have established its position as an industry leader in financial management solutions for America’s health benefits without the amazing support of McCarthy Capital.”

McCarthy Capital was founded by Michael McCarthy in 1986 and has invested in over fifty companies, including Cabela’s, Peak 10, Guild Mortgage Company, and Vornado Air. Today, the firm has approximately $1 billion in capital under management and is based in Omaha with an additional office in Boston (www.mccarthycapital.com).

McCarthy Capital has been very active lately. Earlier this month, the firm held a closing of McCarthy Capital Fund VI, LP at $213 million. The firm’s earlier fund, McCarthy Capital Fund V, had a final close in June 2011 with $158 million in capital.

© 2015 PEPD • Private Equity’s Leading News Magazine • 11-20-15

Norwest Equity Partners Acquires Marco

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Norwest Equity Partners (NEP) has acquired Marco, a provider of business technology services to small and medium-sized business. Marco has been owned for the last 28 years by its employees through an employee stock ownership plan.

Marco provides planning, design, implementation and support for copiers/printers, business IT services, managed services, hosted/cloud services, carrier services, phone systems, document management and audio/video systems. The company is organized under three business divisions: Copier/Printer, IT, and Carrier Services. Marco serves more than 25,000 customers through 920 employees in 42 locations across Minnesota, Wisconsin, North Dakota, South Dakota, Iowa, Illinois, and Nebraska. Marco is led by its CEO Jeff Gau.  The company was founded in 1973 by Gary Marsden and Dave Marquardt as a small typewriter shop in St. Cloud, MN which is still the company’s headquarters (www.marconet.com).

In the past three years, Marco has acquired 15 companies and added 430 employees to its workforce. The company has plans to build a 30,000 square foot building adjacent to its St. Cloud corporate headquarters next year to support its continued growth.  NEP plans to grow Marco through a combination of initiatives including developing new customer channels, expanding geographically via acquisitions, and developing new products.

“Our firm has extensive experience working with companies like Marco, and we are excited to partner with Jeff Gau and his management team to help them continue growing and building into an even stronger company,” said Tim DeVries, NEP Managing General Partner. “Marco’s leadership, culture and customer-centric approach were key investment drivers for us. We also appreciate our shared Minnesota roots and long history in our respective businesses. Our partnership with Marco is a great fit.”

Norwest Equity Partners makes equity investments of $30 million to $150 million in companies operating in the agriculture, applied technology, business services, consumer products and services, distribution, diversified industrials, and healthcare sectors. In April 2015, NEP closed Norwest Equity Partners X, LP, a $1.6 billion fund and Norwest Mezzanine Partners IV, LP, an $800 million fund formed by NEP’s affiliated mezzanine investment firm, Norwest Mezzanine Partners. Norwest Equity Partners is headquartered in Minneapolis (www.nep.com).

Financing was provided by Antares Capital (www.antarescapital.com), Ally Corporate Finance (www.ally.com/corporate-finance), BMO Capital Markets (www.bmocm.com), and Norwest Mezzanine Partners (www.nmp.com).

Minneapolis headquartered investment bank Chartwell Capital Solutions (www.chartwellfa.com) served as financial advisor to Marco.

© 2015 PEPD • Private Equity’s Leading News Magazine • 11-3-15

Silver Lake to Acquire Cast & Crew

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Silver Lake has signed an agreement to acquire Cast & Crew Entertainment Services, a provider of payroll and production accounting services to the entertainment industry, from ZM Capital (ZMC) and other investors.  Cast & Crew’s senior management will remain in their current roles and continue as equity partners under the new ownership structure.

Cast & Crew Entertainment Services is a provider of payroll and other business process outsourcing services to the film, television, live entertainment and commercial production markets in North America.  Production companies use the company’s services to manage payroll processing and related regulatory filings; production accounting software; workers’ compensation insurance coverage and claims administration; residuals processing; procurement and purchasing services; labor relations; and production incentives guidance and reporting. Cast & Crew is headquartered in Burbank, CA and has field operations in New York, Albuquerque, Atlanta, Baton Rouge, New Orleans, Detroit, Philadelphia and Wilmington. Canadian offices are located in Toronto and Vancouver.  The company was founded in 1976 (www.castandcrew.com).

A ZMC-led consortium, including Veronis Suhler Stevenson, Emigrant Capital and other ZMC limited partners acquired the company in 2012. During the two-and-a-half year term of ownership, Cast & Crew achieved significant growth.  ZMC and management develop strategies to increase revenues with existing clients, develop new clients, expand into new geographies, and develop and launch new products (such as Cast & Crew Financial Services and Cast & Crew Open Health).  ZMC and management also began a set of initiatives to reduce costs and improve customer satisfaction metrics.  These initiatives were coupled with a large investment in Cast & Crew’s technology platform.

“We take great satisfaction in Cast & Crew’s dynamic growth in recent years, driven by an outstanding management team and a talented group of employees.  We feel fortunate that we had the opportunity to work with the company during this phase of its growth and remain excited about Cast & Crew’s future prospects,” said ZMC Partner Jordan Turkewitz.

ZMC invests in media companies in which the partnership’s capital resources, industry relationships and operational experience can enhance growth and value. The firm is based in New York (www.zelnickmedia.com).

“Silver Lake’s technology expertise and entertainment industry understanding position them as the ideal strategic partner for our company,” said Eric Belcher, President and CEO of Cast & Crew. “We undoubtedly will benefit from Silver Lake’s involvement as we accelerate our investment in technology and as we bring new client-centric digital solutions to market.”

Silver Lake invests in technology and technology-enabled industries.  The firm has over 100 investment professionals located in New York, Menlo Park, San Francisco, London, Hong Kong, and Tokyo and has $26 billion in assets under management and committed capital (www.silverlake.com).

“We admire what Cast & Crew’s excellent management team has achieved already with ZMC’s support,” said Silver Lake Managing Director Joe Osnoss.‎ “Technology’s impact on the global media and entertainment sectors will create many new opportunities for Cast & Crew and its clients in the years ahead, and we look forward to helping the company achieve its next phase of growth.”

RBC Capital Markets, Credit Suisse, Deutsche Bank Securities and Societe Generale are providing debt financing for the transaction.  Cast & Crew was advised in this transaction by Moelis & Company, Morgan Stanley & Co. and Sidley Austin. Silver Lake was advised by Kirkland & Ellis.

© 2015 PEPD • Private Equity’s Leading News Magazine • 6-30-15