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Prospect Partners Acquires Wedgewood Wedding

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Prospect Partners has acquired Wedgewood Wedding and Banquet Centers in partnership with the company’s management team. Wedgewood becomes the ninth platform company in Prospect Partners’ $200 million third fund which closed in August 2010.

Wedgewood is a provider of full-service wedding and banquet services. Wedgewood’s all-inclusive banquet model features multi-tiered, professionally planned wedding packages that include invitations, food and entertainment as well as options like floral arrangements, cakes, photo booths, lighting, and ministry services. Since founding in 1986, Wedgewood has hosted more than 20,000 unique weddings – 2,300 in 2013 alone – serving over 415,000 guests. The weddings take place on golf courses, historical properties and outdoor gardens leased by Wedgewood, which controls all aspects of each venue’s food and beverage operations. Wedgewood has 25 leased wedding locations in California, Arizona, Colorado and Nevada. The company is headquartered near Los Angeles in Temecula, CA (www.wedgewoodbanquet.com).

“Wedgewood is a truly unique and rapidly growing company that has built a tremendous reputation in a niche segment of the wedding services market,” said Erik Maurer, a Principal of Prospect Partners. “The company’s momentum is a credit to CEO John Zaruka and President Bill Zaruka who defined and brought to life the concept of a ‘Wedgewood wedding’ – convenient, competitively-priced, hassle-free, and memorable – through their incredible expertise, industry knowledge, and dogged focus on an outstanding guest experience.”

Under Prospect ownership, Wedgewood’s growth objectives include expanding Wedgewood-branded weddings to more locations in existing and new geographic markets. The company will continue to seek partnerships with property management companies as well as acquisitions of food and beverage operators that provide wedding/banquet services at US venues such as golf courses, hotels, and other properties.

Prospect Partners focuses exclusively on management-led leveraged recapitalizations and acquisitions of niche market leaders with revenues of less than $75 million. Since 1998, Prospect Partners has invested nationwide in more than 110 companies in a range of niche manufacturing, distribution, and specialty service markets. The firm has $470 million of capital under management and is based in Chicago with an additional office in Menlo Park (www.prospect-partners.com).

“Prospect Partners has successfully helped guide so many other niche companies like ours at key moments in their growth. We look forward to tapping the team’s real-world business acumen in the months and years to come,” said Wedgewood’s President Bill Zaruka.

© 2014 PEPD • Private Equity’s Leading News Magazine • 2-20-14

Golden Gate Exits Eddie Bauer

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Jos. A. Bank Clothiers and Golden Gate Capital have entered into an agreement under which Jos. A. Bank will acquire Everest Holdings, parent company of the Eddie Bauer brand. Golden Gate acquired Eddie Bauer for $286 million at a bankruptcy auction in 2009.

The purchase price for Eddie Bauer consists of a combination of $564 million in cash and approximately 4.7 million new shares of common stock of Jos. A. Bank. The purchase price represents a multiple of approximately 1x estimated 2013 revenue and 9.5x estimated 2013 Adjusted EBITDA, including $25 million of potential pro forma synergies.

Eddie Bauer is a specialty retailer of sportswear, outerwear, gear and accessories. Products are available at approximately 370 stores throughout the United States, Canada and Japan, through catalog sales, and online at www.eddiebauer.com. For the year ended December 31, 2013, Eddie Bauer has estimated its revenue to be between $885 million and $895 million and adjusted EBITDA to be between $61 million and $65 million. The company was founded in 1920 and is headquartered in Seattle.

“Eddie Bauer is a clear success story, with the potential for significant growth as part of a larger enterprise. It has been an exceptional experience to work with CEO Mike Egeck and his team to enable Eddie Bauer to so dramatically improve its performance, and we are excited to be able to participate in its ongoing growth through our investment in Jos. A. Bank,” said Josh Olshansky, Managing Director at Golden Gate Capital.

Golden Gate Capital targets companies across a range of industries and transaction types, including leveraged buyouts, recapitalizations, corporate divestitures and spin-offs, build-ups and venture stage investing. The firm has approximately $12 billion of capital under management and is based in San Francisco (www.goldengatecap.com).

Jos. A. Bank Clothiers (NASDAQ: JOSB) is a designer, manufacturer and retailer of men’s tailored and casual clothing, sportswear, footwear and accessories. The company sells its products through 629 stores in 44 states and the District of Columbia, a nationwide catalog and online at www.josbank.com. The company was founded in 1905 and is headquartered in Hampstead, MD.

The Eddie Bauer acquisition will be financed by Jos. A. Bank through a combination of cash on its balance sheet, committed debt financing provided by Goldman, Sachs & Co. and an issue of new equity. Goldman, Sachs & Co. and Financo are serving as financial advisors to Jos. A. Bank.

© 2014 PEPD • Private Equity’s Leading News Magazine • 2-20-14

Golden Gate Exits Zale

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Signet Jewelers and Zale Corporation, a retail jeweler and a portfolio company of Golden Gate Capital, have entered into an agreement for Signet to acquire all of the issued and outstanding stock of Zale for $21 per share in cash or about $690 million. The transaction has an enterprise value of approximately $1.4 billion, representing an enterprise value to TTM Adjusted EBITDA multiple of 7.4x.

Zale Corporation (NYSE: ZLC) is a specialty retailer of diamond and other jewelry products operating approximately 1,680 retail locations throughout the United States, Canada and Puerto Rico, as well as online. Zale’s brands include Zales Jewelers, Zales Outlet, Gordon’s Jewelers, Peoples Jewellers, Mappins Jewellers and Piercing Pagoda. Zale also operates webstores at www.zales.com, www.zalesoutlet.com, www.gordonsjewelers.com, www.peoplesjewellers.com, and www.pagoda.com. The company is headquartered in Irving, TX (www.zalecorp.com).

Signet is expected to finance the acquisition through bank debt, other debt financing and the securitization of a significant portion of Signet’s accounts receivable portfolio.

J.P. Morgan Securities is Signet’s exclusive financial advisor and provided a fairness opinion to its board of directors. J.P. Morgan Chase has committed to provide bridge financing for the transaction. BofA Merrill Lynch is acting as the exclusive financial advisor to Zale.

Signet Jewelers (NYSE: SIG) (LSE: SIG) is the largest specialty jewelry retailer in the US and UK. Signet’s US division operates over 1,400 stores in all 50 states primarily under the name brands of Kay Jewelers and Jared The Galleria of Jewelry. Signet’s UK division operates approximately 500 stores primarily under the name brands of H.Samuel and Ernest Jones. The company is headquartered in London, UK (www.signetjewelers.com, www.kay.com, www.jared.com, www.hsamuel.co.uk and www.ernestjones.co.uk).

Golden Gate Capital targets companies across a range of industries and transaction types, including leveraged buyouts, recapitalizations, corporate divestitures and spin-offs, build-ups and venture stage investing. The firm has approximately $12 billion of capital under management and is based in San Francisco (www.goldengatecap.com).

© 2014 PEPD • Private Equity’s Leading News Magazine • 2-20-14

TPG Acquires Gelson’s Markets

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TPG has completed its previously announced acquisition of Arden Group, the parent of Gelson’s Markets, an operator of specialty grocery stores. The transaction is valued at $394 million.

Gelson’s Markets operates 17 specialty grocery stores in Southern California. Products sold include produce, meat, seafood, deli, wine and liquor. The company was founded in 1951 and is headquartered in Encino, CA (www.gelsons.com).

“Gelson’s Markets is an iconic Southern California supermarket chain that prides itself on offering quality and unmatched customer service,” said Carrie Wheeler, partner at TPG. “We look forward to working with the team to further expand Gelson’s footprint of premier supermarkets.”

TPG is a private investment firm founded in 1992 with approximately $56 billion of assets under management. Sectors of interest include industrials, retail, consumer, financial services, travel and entertainment, technology, media and communications, and healthcare. TPG makes investments throughout North America, Europe, Asia and Australia. The firm has offices in San Francisco, Fort Worth, Austin, Beijing, Chongqing, Hong Kong, London, Luxembourg, Melbourne, Moscow, Mumbai, New York, Paris, São Paulo, Shanghai, Singapore and Tokyo (www.tpg.com).

“With TPG’s retail experience and financial support, we are confident that we can profitably grow Gelson’s, and we are excited to embark on this new phase for the company,” said Rob McDougall, President and CEO of Gelson’s Markets. “In fact, we will be opening our first new store under TPG’s ownership in La Cañada Flintridge at the end of March. We hope this will be the first of many new store openings to come in the future, expanding Gelson’s legacy of providing quality service and products.”

Moelis & Company was the exclusive financial advisor to Arden Group. BMO Capital Markets acted as financial advisor to TPG.

© 2014 PEPD • Private Equity’s Leading News Magazine • 2-20-14

CD&R Acquires Ashland Water Technologies

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Clayton, Dubilier & Rice (CD&R) has agreed to acquire Ashland Water Technologies, a supplier of specialty chemicals used in water treatment, for $1.8 billion. Ashland Water Technologies is a division of Ashland, Inc.

“Ashland Water Technologies has many attractive features, including a very strong competitive position which reflects its global scale, deep set of service capabilities and innovation leadership,” said CD&R Partner George Jaquette. “We look forward to working with the management team to build upon the company’s market leadership position.”

Ashland Water Technologies (AWT) is a supplier of specialty chemicals and services to the pulp and paper (67% of 2013 sales) and industrial water markets (33% of 2013 sales). Pulp & paper products include sizing, strength, biocides, retention and drainage control, contaminant control, and crepe and release chemistries. Each of these product groups addresses steps in the packaging, tissue & towel or paper manufacturing processes. Industrial water products include water treatment and process chemicals that are used in boilers, cooling towers and wastewater treatment applications to prevent corrosion, deposition, biological fouling and foaming. AWT employs about 3,000 people and has annual revenues of approximately $1.7 billion. The division has 31 manufacturing facilities located in 17 countries and is headquartered in Wilmington, DE. To visit AWT’s website click HERE.

John Panichella will continue to lead AWT as Chief Executive Officer. Lewis Hay III, former Chairman, President and Chief Executive Officer of NextEra Energy and a CD&R Operating Advisor, will assume the role of Chairman upon the close of the transaction, which is expected by the end of September.

“We are excited to be partnering with John Panichella and the AWT management team and look forward to working with them to move the business forward to its next level of profitable growth,” said CD&R Partner David Wasserman.

Clayton, Dubilier & Rice focuses on producing financial returns through building stronger more profitable businesses. Since inception, the firm has managed the investment of more than $19 billion in 59 businesses representing a range of industries with an aggregate transaction value of approximately $90 billion. Founded in 1978, Clayton, Dubilier & Rice is based in New York and London (www.cdr-inc.com).

CD&R has obtained committed financing for the purchase of AWT from BofA Merrill Lynch, Credit Suisse, Goldman Sachs Bank USA, Macquarie Capital, Nomura Securities International, and RBC Capital Markets.

BofA Merrill Lynch, Credit Suisse, Goldman, Sachs & Co., Macquarie Capital, Nomura Securities International, and RBC Capital Markets acted as financial advisors, and Debevoise & Plimpton LLP acted as legal advisor to CD&R in connection with the transaction.

Ashland (NYSE: ASH) operates through four commercial units – Ashland Specialty Ingredients; Ashland Water Technologies, Ashland Performance Materials and Ashland Consumer Markets. The company serves the architectural coatings, automotive, construction, energy, food and beverage, personal care, pharmaceutical, tissue and towel, and water treatment markets. Ashland is headquartered in Covington, KY (www.ashland.com).

© 2014 PEPD • Private Equity’s Leading News Magazine • 2-18-14

Riverside Exits Vokes-Air Group

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The Riverside Company has sold Vokes-Air Group to MANN+HUMMEL GmbH, a filtration company headquartered in Germany. Vokes-Air Group was acquired by Riverside in July 2008 though a corporate care-out with SPX Corporation.

Vokes-Air Group is a provider of air filtration products for a variety of commercial and industrial applications, ranging from HVAC to power plants and hospitals. The company has manufacturing plants in Sweden, Germany and the UK, and sales operations in 10 countries. Vokes is based in Svenljunga, Sweden (www.vokesair.com).

“Riverside took a fragmented corporate division with untapped potential and carefully built a strong standalone company,” said Riverside Partner Thomas Blomqvist. “We then helped Vokes thrive by investing in R&D, improving production efficiency, reducing overhead, and ultimately significantly increasing profitability of the company.”

Working with Mr. Blomqvist on the transaction for Riverside were Senior Operating Partner Fabio Pesiri, Vice President Björn Larsson, Vice President Marcin Goszyk and Associate Martin Gustavsson.

“Riverside’s contribution to Vokes has been substantial, greatly supporting it in a variety of ways throughout its period of ownership to ensure that Vokes delivered significant operational improvements and strong earnings growth,” said Vokes’ CEO George Black. “Vokes has a strong position in the attractive European air filtration market with significant opportunities ahead for continued growth.”

The Riverside Company is focused on the smaller end of the middle market and invests in businesses valued at up to $250 million (€200 million in Europe). Since 1988, the firm has invested in more than 330 transactions with a total enterprise value of more than $6 billion. The firm’s current portfolio includes more than 70 companies. The Riverside Company is headquartered in New York with additional offices in Atlanta, Chicago, Cleveland, Dallas, Los Angeles, San Francisco, and London (www.riversidecompany.com).

Mannheimer Swartling (www.mannheimerswartling.se/en‎) provided legal advice and KPMG advised Riverside on the sale of Vokes.

© 2014 PEPD • Private Equity’s Leading News Magazine • 2-18-14