|
Cornerstone
Equity Sells Label Maker Vestcom
International
Cornerstone's
determination to get a good sale price - despite issues with one of
Vestcom's customers that complicated the auction - paid off, as the
company ultimately fetched the firm a 3.2 times return. The buyers
are Stephens Group - which has deep ties with Vestcom - and
Lake
Capital.» |
|
Allied
Capital Sells Mercury Air Centers For
$427M
The
company did six add-on deals and brought in a new CEO under Allied's
leadership.»
Gores Group
Does First Health Care Deal
The
firm is buying Healthsouth's diagnostics division for $47.5 million
in a baby boomer play.» |
LBO-Backed
Beauty Schools Co. Puts On A New
Face
Key
Principal has a 24% stake in Empire Beauty, which will boost school
count to 88 from 37 with this deal.»
Goldman
Invests In Big Names With $500M Energy
Fund
The
fund, even though it is still being raised, has already committed
some $350 million.» |
Cornerstone Equity Sells Label Maker Vestcom
International
4/20/2007
– Cornerstone Equity Investors
LLC sold Vestcom International Inc. for $158 million to two other private
equity firms, returning 3.2 times its money from the maker of shelf labels
for supermarkets and drugstores.
The buyers -- The Stephens Group
LLC and Lake Capital -- won an auction that was complicated last fall
after one of Vestcom's top customers, Albertson's Inc., changed hands and
began shedding locations, said Cornerstone Equity Managing Director
Steve Larson.
Potential
suitors became wary of Vestcom's growth prospects as the supermarket
chains' new owners, an investment group led by Cerberus Capital
Management, sold some 180 locations and initiated plans to shutter another
125, he said. Bids came in below Cornerstone Equity's expectations, and
the sale process was delayed as Vestcom launched new accounts with
Walgreen Co. and Safeway Inc.
The company re-engaged the Stephens
Group, one of its initial suitors, in exclusive talks earlier this year as
those accounts began to bear fruit.
"We were trying to get a
premium price," Larson said. "(Potential buyers) needed to be convinced
that the growth was there."
Stephens Group General Counsel Ron
Clark said his firm was drawn to Vestcom's "strong market share," with a
client list that includes retailers like Target Corp., Kroger Co. and
Dollar General Corp.
The buyout firm also has deep ties with
Vestcom. Their headquarters are located about 15 minutes away from each
other in Little Rock, Ark. Stephens Group Senior Principal Rick Turner
went to school with Vestcom President and Chief Operating Officer
Tim McKenzie at the University
of Arkansas, and also attends the same church. Stephens Group Principal
Kent Sorrells' uncle was an
initial investor in Vestcom when it was founded in 1969.
The
executives' familiarity with each other made for a smooth negotiating
process, although Stephens and Lake
didn't get any favors when it came to a valuation, Larson said.
"We sold it for the best price we could get," he said.
Stephens Group decided to bring Lake Capital into the deal because it
wanted a partner with lots of experience in the retail services industry,
Larson said. Lake Capital is a veteran in the space,
with a current investment in Storecast Merchandising Corp., which provides
merchandising services in retailers.
Vestcom's shelf labels range
from simple strips that have a barcode and price, to larger tags that
feature advertisements, promotional and nutrition information. It also
recently started marketing tiny shelf monitors that broadcast 30-second
ads and sound clips.
The company is on track to post $120 million
in revenue this year, up from $115 million in 2006. It processes up to 100
million labels a week from nine locations around the country.
It
had more than 30 locations and provided marketing and business
communication services to financial and insurance entities when
Cornerstone Equity took it private in 2002.
That deal was worth
about $85 million, with Cornerstone Equity investing nearly $36 million of
equity, according to regulatory filings.
During the last five
years, Cornerstone Equity has consolidated the business services arm while
focusing on building up the retail labeling business, which the firm felt
had the strongest growth potential. It sold the business services arm last
year to Bowne & Co. for $30 million in cash, using the proceeds to
take out a dividend and pay down some of Vestcom's debt.
Vestcom
was advised by Robert W. Baird & Co. in the sale.
Reach
Cornerstone at 212-753-0901; Stephens Group at 877-891-0091; Lake Capital at 312-640-7050 and Vestcom
at 501-663-0100.
http://www.cornerstone-equity.com
http://www.stephensgroup.com
http://www.lakecapital.com
http://www.vestcom.com
 E-mail this story  Top  Section Top
Allied Capital Sells Mercury Air Centers For
$427M
4/20/2007
– Allied Capital Corp. has agreed
to sell Mercury Air Centers Inc., which refuels and provides other
services to non-commercial jets while grounded, to Macquarie
Infrastructure Co. for $427 million, more than five times what Allied paid
for the company in 2004.
The publicly traded buyout firm said that
it stands to book a gain of about $240 million on its equity invested,
although it didn't provide cash-on-cash or internal rates of return on the
deal.
Allied Capital is pleased with the investment, said Dan
Russell, an Allied managing director. The firm helped triple Mercury's
earnings before interest, taxes, depreciation and amortization after
establishing it as a standalone company.
Previously, Mercury Air
Centers had been part of the publicly traded Mercury Air Group, which sold
it to Allied in 2004 for $83 million to pay off some of its
debt.
The company's growth was helped with six add-on acquisitions
that put Mercury Air Centers locations at three additional airports while
expanding its presence at others, Russell said. Mercury Air Centers also
brought in a new chief executive, Ken Ricci, and other members of senior
management to guide the company.
In buying Mercury Air Centers,
Allied Capital was betting that increasing orders for private and
corporate jets, as well as an increase in fractional ownership of
aircraft, would drive the need for Mercury's services.
That trend
continued in 2006 when 4,042 general aviation airplanes were shipped, an
increase of nearly 13% from the previous year's total of 3,580 units,
according to the General Aviation Manufacturers Association. General
aviation includes all non-military and non-commercial jets.
With
headquarters in Richmond
Heights, Ohio,
Mercury Air Centers largely sells fuel to jets that pull into its
fixed-based operations (FBOs) and also offers other services while the
plane is grounded like de-icing, catering and cleaning. It currently has
24 FBOs at 22 airports nationwide. In addition to its Mercury Air Centers
brand, the company operates under the names Corporate Wings, First Air and
IX Jet Centers.
The company's financials were not disclosed
although Macquarie said that Mercury
would generate in excess of $25 million of Ebitda in the year following
the sale.
The operations of Mercury Air Centers are expected to be
combined with the Dallas-based Atlantic Aviation, which Macquarie
Infrastructure Co. already owns. The combination will create a company
with over 60 FBOs in North America.
Of the $427 million sale price, about $10 million of proceeds due
to Allied are subject to holdback provisions. Allied expects to be repaid
another $50 million of debt outstanding to Mercury at closing. The deal is
expected to close in the third quarter and the purchase price is subject
to adjustments.
Reach Allied Capital Corp. at 202-331-1112.
http://www.alliedcapital.com
http://www.fuelondemand.com
E-mail this story Top Section Top
Gores Group Does First Health Care
Deal
4/20/2007
– The Gores Group has struck its
first health care deal, agreeing to buy the diagnostic division of
HealthSouth Corp. for $47.5 million.
The deal, which the buyout
firm landed through an auction, is expected to close by the end of
June.
The firm started looking at the asset about a couple of
months ago and found it compelling because it was a "technology-driven,
services-oriented" business, said Frank Stefanik, a partner with Gores
Group.
The firm hopes to do more deals in the health care services
sector to cash in on the growing demands of an aging population, he said.
The diagnostic division includes a network of 54 freestanding
imaging centers in 19 states and the District of Columbia. About 80% of the
centers provide a combination of outpatient diagnostic imaging services,
like MRIs and ultrasounds. The remaining ones are specialty
labs.
Healthsouth sold the division as part of its efforts to
reposition itself as a post-acute health care business, focusing on
inpatient rehabilitative services.
Deutsche Bank Securities served
as HealthSouth's financial adviser for this transaction.
Gores
Group sees the business as a solid platform to grow organically and
through add-on acquisitions, Stefanik said. He declined to comment on the
division's financials, except to say that it has been doing
well.
The investment came out of the firm's first fund, which
closed in 2001 with $500 million in commitments. The Los Angeles-based
firm is currently raising its second fund with a $750 million target, LBO
Wire previously reported. It typically invests in technology, business
services and industrial components sectors.
Reach Gores Group at
310-209-3010.
http://www.healthsouth.com
http://www.gores.com
E-mail this story Top Section Top
LBO-Backed Beauty Schools Co. Puts On A New
Face
4/20/2007
– Empire Beauty Schools Inc., a
beauty schools operator that is minority-backed by Key Principal Partners,
is bulking up in size, taking on 51 cosmetology schools from
publicly-traded Regis Corp.
Regis will have a 49% stake in Empire
Education Group, as the new company will be known, with Empire Beauty's
shareholders retaining the rest. Key Principal hasn't yet decided whether
to sell or roll over its 24% stake, said Frank Schoeneman, chairman and
chief executive of Empire.
Partners at Key Principal did not
return calls seeking comment.
The deal was negotiated directly
between Regis and Empire's management, which had been seeking to end the
competition between the schools, Schoeneman said. Specific financial terms
weren't disclosed.
The combined Empire Education will own 88
accredited cosmetology schools, generating some $160 million of revenue in
2007, Schoeneman said. That's up from 37 schools and annual revenue of $63
million currently. Most of the schools owned by the two companies
complement each other, said Schoeneman.
In addition, there are
other synergies with Regis that Empire Beauty hopes to cash in on, such as
cross-promotion of hair products at Empire's schools and career
opportunities for trained students at Regis Corp., said Schoeneman.
Key Principal bought its stake in 2004 for $16 million, Schoeneman
said. Since its investment, the company has grown by expanding its
schools, which teach students skills in hair styling, skin care, nail care
and massage, into new geographic locations, like Chicago, New York
and Boston.
Reach Key Principal at
216-828-8125.
http://www.keyprincipalpartners.com
http://www.empire.edu/
E-mail this story Top Section Top
Goldman Invests In Big Names With $500M Energy
Fund
4/20/2007
– Goldman Sachs Asset Management
Private Equity Group, the private equity fund-of-funds arm of the
investment banking giant, is almost done raising - and investing - its
$500 million Goldman Sachs Concentrated Energy Fund, according to a
limited partner.
The New York-based manager has already invested
some $250 million to such funds as Quantum Energy Partners IV LP, First
Reserve Fund XI LP, Energy Capital Partners I LP and Carlyle/Riverstone
Global Energy Power Fund III LP.
The fund of funds also does
direct investing, and is allowed to commit at least 25% of the total
raised to direct deals. So far, Goldman Sachs has invested $100 million to
Quantum Resources A1, $12 million to FirstLight Power Resources Inc.,
formerly NE Energy Inc., owner and operator of predominantly
hydro-generation plants in Connecticut
and Massachusetts; and $20 million to
Niska Gas Storage, an independent natural gas storage company in
North America.
Niska Gas Storage
is a holding company that Carlyle/Riverstone Global Energy & Power
Fund III formed after acquiring the first chunk of publicly-traded EnCana
Corp.' natural gas storage operations in May for $1.3 billion, said Paul
Amirault, senior vice president of Niska Gas. Carlyle/Riverstone completed
its $1.5 billion acquisition of EnCana Corp.'s gas storage business in
November.
No further information could be found on Quantum
Resources A1.
Goldman Sachs declined to comment.
Goldman
Sachs Concentrated Energy Fund invests in a natural resources niche and
focuses on the oil, gas, coal, power, energy infrastructure and
energy-services sub-sectors.
Though the fund of funds is close to
being fully committed, it is still taking in LP commitments, including one
from the Ohio State University, which approved a $10
million allocation last month. It's not clear when Goldman began raising
the fund of funds.
This strategy allows LPs to view the fund in
action, which helps when a vehicle is a first-timer. This is Goldman
Sach's first concentrated energy fund. It also mitigates the J-curve
effect, a thorn in the side of many LPs, by reducing the wait for
distributions.
The Goldman Sachs name also helps, given that the
private equity group utilizes the firm's network and resources to source
and analyze potential investments efficiently.
According to one
LP, Goldman Sachs Concentrated Energy Fund will charge a 1% management fee
for the first five years. Starting in the sixth year, the management fee
will be 75% of the previous year's fee. Also, a performance fee of 5% of
investment profits and 15% of direct investment profits will be charged,
but only after investors receive 100% of their capital contributions plus
an 8% annual return.
The GP commitment is 5%, and the term of the
fund is 10 years. The investment period is two years, according to the LP.
The private equity group manages $18 billion in committed assets
across four fund programs: diversified, secondary, technology and
distressed funds of funds.
Reach Goldman Sachs at 212-902-1000.
http://www2.goldmansachs.com
E-mail this story Top Section Top
Mid-market
/ New
York
Wicks Group Puts Horse Racing Magazine On The
Block
4/20/2007
– Amid a hot market for special
interest media, The Wicks Group of Cos. has put its Daily Racing Form LLC,
publisher of the horse racing magazine by the same name, on the block.
The firm has hired Credit Suisse Securities to explore strategic
alternatives for the company including a sale process.
Daily
Racing Form, founded in 1894, is currently the only national daily print
publication dedicated to horse racing. The magazine also has a Web site.
The company's financials were not disclosed, and Wicks Managing Partner
Craig Closk declined to comment on specifics.
Wicks acquired the
magazine from Alpine Capital Group in 2004 for an undisclosed
sum.
The magazine could receive interest from media-savvy private
equity firms, particularly from the ones that own special interest media
companies.
The sector has attracted interest because of the steady
revenue such assets generate. Wind Point Partners backs a platform called
Active Interest, which owns such titles as American Cowboy and Yoga
Journal; Spectrum Equity Investors backs Apprise Media, which publishes
Bow and Arrow Hunting and Victorian Homes; and ABRY Partners and
Providence Equity Investors back F&W Publications, which publishes
Antique Trader and Big Reel.
Reach Wicks Group at 212-838-2100.
http://www.drf.com
http://www.wicksgroup.com
E-mail this story Top Section Top
Aeroflex Gets Rival Offer From Veritas
Capital
By
Staff Reporters
4/20/2007
– Aeroflex Inc., which agreed to
be bought out by two private equity firms for $1 billion last month, has
received a higher rival offer from Veritas Capital.
However, the
Plainview, N.Y., maker of automated testing
services said its $13.50-a-share buyout agreement with General Atlantic
and Francisco Partners remains in place.
The company, which had
until April 18 to solicit other bids, received a proposal from Veritas
Capital for a leveraged recapitalization in which stockholders would
receive a cash dividend of $14 and retain 21.2% of the fully diluted
common equity.
New York-based Veritas Capital would control the
rest of the equity.
Aeroflex is to pay a break-up fee of up to
$22.5 million to General Atlantic and Francisco Partners if it accepts
another offer under the buyout agreement they announced March 5.
Reach General Atlantic at
203-629-8600 and Francisco Partners at 650-233-2900.
http://www.veritascapital.com
http://www.franciscopartners.com
http://www.generalatlantic.com
E-mail this story Top Section Top
National Home Health Considering Competing Offer
To Angelo Gordon's
4/20/2007
– National Home Health Corp.
plans to pursue a revised $12 dollars-a-share cash buyout offer from
Premier Home Health Services Inc.
The company had rejected another
$12 per-share offer in February because the original offer was
conditional.
The Scarsdale, N.Y., company said its board's special
committee unanimously voted that the new offer could be expected to lead
to a superior proposal, compared with the previous offer from Angelo
Gordon & Co. of $11.35 a share to $11.50 a share.
The board
accepted the committee's proposal.
National Home Health's shares
ended trading down 8 cents, or 0.7%, at $11.62.
Reach Angelo
Gordon at 212-692-2000.
http://www.angelogordon.com
http://www.nhhc.net
E-mail this story Top Section Top
Jeweler M Fabrikant & Sons Seeks Judge's OK To
Auction Assets
4/20/2007
– Diamond wholesaler M. Fabrikant
& Sons Inc. has asked a judge for permission to begin enticing bidders
for an auction of its assets slated for early May.
The request,
filed with the U.S. Bankruptcy Court in Manhattan on Tuesday, solidifies the
company's earlier assertions that it may liquidate rather than reorganize.
Under the auction plan, privately held M. Fabrikant would sell all
its assets, including inventory, accounts and intellectual property. It
would then file a liquidation plan with the court.
Under the
proposed auction rules, any stalking-horse, or lead bidder, would be
offered payment for fees and costs worth up to 2% of the bid or $200,000,
if the offer lost at auction.
The judge overseeing the jewelry
company's bankruptcy case will decide whether to approve the rules at a
hearing on April 26.
M. Fabrikant has been under Chapter 11
protection since Nov. 17, after lenders "froze" its bank accounts. Lenders
include ABN Amro Bank, Antwerpse Diamantbank, Bank of America, HSBC Bank
USA, Israel Discount Bank of New
York, JP Morgan Chase and Sovereign Bank.
Fabrikant owed lenders about $161.9 million as of December.
The
112-year-old New
York company is one of the world's largest
manufacturers and distributors of diamonds and gemstone jewelry. It could
draw interest from private equity firms, which have been active in the
retail jewelry industry in recent years.
For instance, Waltham
Mass.-based DDJ Capital Management last year sold Samuels Jewelers Inc. in
December to Gitanjali Gems Ltd. DDJ Capital bought the Austin, Texas-based
chain out of bankruptcy in 2004 and turned it around shedding some
location. Also last year, Fenway Partners sold its minority stake in
jeweler Harry Winston to Aber Diamond Corp., fetching $99 million after
seven years of ownership.
M. Fabrikant & Sons owns 81% of
domestic unit Fabrikant-Leer International Ltd., which is also in Chapter
11. Fabrikant directly and indirectly owns over 40 companies in 10
countries.
Reach M. Fabrikant at 212-757-0790.
http://www.fabrikant.com
E-mail this story Top Section Top
Large
/ Kennett Square,
Pa.
Genesis Healthcare: Buyout Offer Raised To
$64.25/Shr
By
Staff Reporters
4/20/2007
– Genesis HealthCare Corp. said
it has amended its merger agreement with affiliates of Formation Capital
LLC and JER Partners to increase the cash portion payable to Genesis
shareholders to $64.25 per share from $63. The transaction is now valued
at $1.7 billion, including the assumption of roughly $475 million in debt.
In addition, under the amended agreement, the termination fee has
been reduced to $15 million from $50 million.
The original deal
was announced Jan. 16. Genesis shareholders will vote on the new agreement
on May 4.
Kennett Square, Pa.-based Genesis operates skilled
nursing centers and assisted living residences.
Genesis shares
were halted prior to the announcement.
Reach Formation Capital LLC
at 770-754-9660 and J.E. Robert at 703-714-8000.
http://www.jer.com
http://www.formationcapital.com
http://www.genesishcc.com
E-mail this story Top Section Top
ION Media Holder Zeiger Supports NBC-Citadel
Revised Offer
4/20/2007
– Investor Steven Robert Zeiger,
holder of a 5.7% stake in Ion Media Networks, said that he supports an
amended buyout offer made by NBC Universal Inc. and hedge fund Citadel
Investment Group.
Zeiger said in a filing with the Securities and
Exchange Commission that he intends to recommend to Ion's board that it
accept NBC-Citadel's modified proposal and enter into a definitive
agreement.
As reported, Ion Media is mulling various restructuring
offers, including the one from Citadel with support from NBC, which holds
a controlling interest in Ion Media. NBC is majority-owned by General
Electric Co.
The other proposal is from a group of Ion Media
preferred stockholders, who have complained that the Citadel offer
shortchanges them and have submitted their own recapitalization plan for
the company.
The New York Post reported that some of the preferred
shareholders have privately threatened to sue Ion's board members if they
accept the NBC-Citadel offer.
NBC and Citadel first proposed a
restructuring plan in January and have twice revised their offer, most
recently on April 11. Their latest revision calls for a cash injection of
$100 million into the TV broadcaster formerly known as Paxson
Communications. The deal raises the price paid to some preferred holders
and gives them a potential stake in the private company.
NBC and
Citadel said that if a tender offer is launched by May 4, tendering
shareholders would receive $1.45 per share in cash.
Reach Ion
Media Networks at 561-659-4122.
http://www.citadelgroup.com
http://www.ionmedia.tv
E-mail this story Top Section Top
Group Vying For Delphi Set To Move
Ahead
|
![LBO Wire [logo]](http://www.djnewsletters.com/images/DJ-LBOWire-logo.gif){kind=logo}