Pfingsten Partners Buys Motus3

Pfingsten Partners has acquired Motus3 Cos., an Overland Park, Kansas-based maker of food processing equipment under the brand names Marlen and Carruthers. No financial terms were disclosed for the deal, which closed on December 31.

PRESS RELEASE

Private equity firm, Pfingsten Partners, L.L.C., announced the acquisition of Motus3 Companies, an Overland Park, KS-based designer and manufacturer of innovative food processing equipment for a variety of products including meat, poultry, fish, vegetables, fruit, bakery, confectioneries, snacks and dairy goods. Motus3 products are sold under the brand names Marlen and Carruthers, and are used for pumping, portioning, filling, dicing, grinding, slicing, reducing, chilling and cooking food.

Motus3’s highly engineered products, replacement parts, and field services have been used by blue chip food processors for more than 50 years. Strong brand recognition and customizable products for niche applications have enabled the company to achieve meaningful market share in a highly fragmented industry. Pfingsten plans to create a diversified food processing equipment platform through organic growth, strategic add-on acquisitions and geographic expansion. Going forward, the company will operate under the name Marlen International.

“Growing global demand for processed foods, a large installed base of equipment, and a meaningful replacement parts business made this an attractive opportunity for us,” said Thomas S. Bagley, Senior Managing Director, Pfingsten Partners, L.L.C. “We hope to leverage the company’s strong brand image with Pfingsten’s global capabilities to build an international manufacturer of niche food equipment and replacement parts spanning a broad range of food applications.”

“Pfingsten’s conservative capital structure enabled us to get a deal done with certainty,” said Motus3 President, Adam Anderson. “The new partnership will allow us to embark on our next stage of growth by immediately accessing new customers, expanding our geographic reach both domestically and internationally, and continuing further investment in new product development.”

Pfingsten Partners acquired the business in partnership with management on December 31, 2009, and marks the second platform investment for Pfingsten Partners’ $525 million Fund IV. Terms were not disclosed.

About Pfingsten Partners

Pfingsten Partners is an operationally focused private equity firm founded in 1989. From its headquarters in Chicago and offices in Hong Kong and Shenzhen, China, the firm builds better businesses through operational improvements, professional management practices, global capabilities and profitable business growth rather than financial engineering. Since completing its first investment in 1991, Pfingsten Partners has acquired 68 manufacturing, distribution and business service companies and has over $1.2 billion of capital under management. For more information, visit www.pfingstenpartners.com.


Jordan Co. Buys Dental Device Biz – Exclusive

The Jordan Company LP has bought Zest Anchors Inc., an Escondido, Calif.-based company that makes attachments used to secure dentures and other dental implants, according to Paul Zuest, the president of the company.

Jordan Company purchased a majority stake while Zuest and other shareholders will retain a 25 percent stake. Zuest declined to discuss how large the investment was and executives at Jordan Company declined to comment.

Equity for the investment will come out of The Resolute Fund II LP, according to a regulatory filing. The New York-based shop closed the $3.6 billion fund in February 2008.

Zuest said he sold the company in part because he plans to retire in about six months and wants to take some money off the table for himself and his family. Zuest’s father, Max Zuest, developed the original Zest Anchor attachment in 1972 in his San Diego-based dental laboratory. The company’s products include small screw-like components that are used with various kinds of dental implants.

Zuest and other managers began shopping the company in January 2009 with the help of Gary Hochman, the company’s accountant. About 15 groups expressed interest in the company but Jordan Company offered the most money, Zuest said. The deal closed Dec. 31, he said.

The Jordan Company is led by Jay Jordan, a dealmaker with more than 35 years of experience. The firm practices a classic buy-and-build strategy and manages $6 billion in 36 countries. Including add-ons to existing portfolio companies, the firm has made more than 400 acquisitions.

Zest Anchors marks the first platform investment Jordan has made since August 2008, when the firm bought Harvey Gulf & International Marine, a Harvey, La.-based owner of towing vessels that operate in the Gulf of Mexico, for $500 million. In a June 2009 interview with Buyouts, Jay Jordan said the firm had been cautious in part because sell-side expectations had not sufficiently come down. “We’re cautiously optimistic we’ll be able to make some deals over the next two to three years,” he said.

In that same interview, Jordan said the Resolute Fund II was about 20 percent invested.

This article was previously published on the website of Buyouts magazine, where Bernard Vaughan is a senior editor.


Guardian Capital Buys Sure Fit

Guardian Capital Partners has acquired Sure Fit Inc., a New York-based maker of slipcovers and related accessories. Argosy Private Equity and existing Sure Fit senior lender Wells Fargo Business Credit provided additional financing. No pricing terms were disclosed.

PRESS RELEASE

Sure Fit Inc., the nation’s leading provider of ready-made slipcovers and related accessories, today announced that Guardian Capital Partners (GCP), a Philadelphia, PA based private equity firm that invests in middle market companies, has acquired the business. Terms were not disclosed.

Hugh R. Rovit, CEO of Sure Fit, said: “We are very pleased to have established a partnership with GCP and are looking forward to working with them to continue Sure Fit’s growth in order to maintain our place as category captain. The Company has just completed its most profitable year, successfully executing its strategy in a very challenging retail environment, and the company is well positioned to continue its strong performance. Together with Guardian’s guidance and resources, we will be able to accelerate our initiatives in product, customer and channel expansion as well as continued branding opportunities for the Sure Fit® name.”

Scott D. Evans, Managing Partner of GCP, said: “We are impressed with the company’s accomplishments and with its potential for future growth. Under the leadership of Hugh and his team, Sure Fit has successfully repositioned its products as affordable and practical solutions to higher priced home decorating alternatives, such as buying new furniture or reupholstering. This approach has connected with consumers and has made the product even more relevant in today’s retail environment.”

Wells Fargo Business Credit, the company’s senior bank lender since September 2008, and Argosy Private Equity, a middle market mezzanine lender and minority equity investor, provided additional financing for the transaction. With a well-capitalized balance sheet and larger credit facility, Sure Fit now has the financial resources to take advantage of the many growth opportunities identified by Rovit and his team.

Sure Fit’s success owes much to its positioning of the category and its own brand as providing an economical, visually appealing and easy-to-install solution for redecorating and furniture protection. Slipcovers have traditionally been used by consumers to cover and protect upholstered furniture from damage. Under Sure Fit’s lead, slipcovers are increasingly used for fashion and redecoration.

High quality design has also been an important element in the company’s strategy. Sure Fit focuses its product development on design-based, differentiated slipcovers that deliver performance and functionality. Its machine-washable slipcovers provide a modern, fitted look that is not readily distinguishable from standard upholstery. Sure Fit provides its core products in a selection of rich designs, fabrics, and pattern collections, many of which are protected by patents, trademarks or copyrights.

Peter H. Haabestad, Managing Partner of GCP, added: “Sure Fit has developed a balanced platform of brands, channels, and price points, and has strong access to customers through major national retailers, its own website and other channels. We believe there is excellent potential for the company to reach many consumer segments and substantially increase its growth.”

Mr. Rovit continued: “Our goal in the coming year is to continue our growth and further develop the brand, which has high consumer recognition and is increasingly viewed as the authority in this market segment. Our business infrastructure is highly scalable, so we can take advantage of growth opportunities quickly and efficiently. Most important, we have outstanding people who have worked hard to build the company and will play a vital role in its future success.”

About Sure Fit Inc. (www.surefit.com)

Sure Fit Inc. is the nation’s leading provider of ready-made slipcovers and related accessories. The company’s longstanding position as the premier producer of ready-made slipcovers and coordinating accessories is based on its history of providing value-added decorating solutions in a broad range of styles to meet the needs of the widest range of purchasers.

Sure Fit’s product line includes slipcovers for sofas, loveseats, chairs, oversized chairs, wing chairs, dining room chairs, recliners, ottomans and futons as well as furniture throws and coordinating decorative pillows. Sure Fit provides an attractive and affordable solution for consumers who need to protect furniture from children, pets and general wear or want to quickly and cost-effectively enhance the appearance of a room.

Sure Fit has operations in New York, New York and Allentown, Pennsylvania.

About Guardian Capital Partners (www.guardiancp.com)

Guardian Capital Partners is a private equity firm based in suburban Philadelphia that makes control investments in lower middle market manufacturing and service companies. GCP partners with management teams to provide equity capital to lead leveraged buyouts, recapitalizations and divestitures of family-owned businesses and non-core divisions of larger corporations. The private equity experience and complementary skill sets of the GCP team provide a unique combination of operating and finance capabilities resulting in speed and certainty of execution, operational excellence, and meaningful long term value creation for its portfolio companies. GCP targets companies with revenues between $15 million and $75 million.


Parthenon Capital Backs Loan Depot

LoanDepot, an Irvine, Calif.-based online provider of consumer direct mortgage origination, has raised an undisclosed amount of growth equity funding from Parthenon Capital Partners. Company CEO Anthony Hsieh co-invested alongside Parthenon.

PRESS RELEASE

Parthenon Capital Partners, a private equity firm with offices in San Francisco and Boston, announced today that it completed an investment in loanDepot, an online consumer direct mortgage origination company based in Irvine, California. The purpose of the investment is to provide the necessary growth capital for the Company to secure warehouse funding and to continue to develop the leading origination platform in the industry.

“Since we first met Anthony and his team in 2003, we have looked for the right opportunity to partner with them, and we’re excited to have found it by supporting their new venture, loanDepot.”

loanDepot is led by industry veteran and Chief Executive Officer, Anthony Hsieh, a pioneer in the mortgage industry who, with his highly accomplished team, previously built two successful mortgage businesses, LoansDirect and Home Loan Center. Mr. Hsieh co-invested alongside Parthenon in the transaction.

“We greatly appreciate the support of the Parthenon Capital Partners team,” said Mr. Hsieh. “We were fortunate to have a number of potential funding options but chose Parthenon Capital Partners given our longstanding relationship with their partnership group and their deep understanding of the mortgage industry.”

“We are thrilled to partner with the preeminent team in the mortgage origination business,” said Brian Golson, Managing Partner of Parthenon Capital Partners. “Since we first met Anthony and his team in 2003, we have looked for the right opportunity to partner with them, and we’re excited to have found it by supporting their new venture, loanDepot.”

loanDepot, which officially launches this week, provides purchase mortgages and refinancing direct to consumers through its online portal, www.loanDepot.com. In addition to finding the best mortgage solutions for consumers, loanDepot provides significant content designed to educate the consumer and demystify the mortgage process. Mr. Hsieh and his team have built the technology and the systems required to provide exceptional customer service, efficient mortgage processing, and stringent underwriting. Having designed this system following the recent mortgage crisis and subsequent increase in regulatory requirements, loanDepot will have one of the only mortgage processes in the industry built specifically for this new environment.

Parthenon has been analyzing the mortgage origination industry broadly—and this team specifically—for more than five years. Andrew Dodson, Principal in Parthenon’s San Francisco office, remarked, “the recent consolidation and heightened regulatory requirements have caused considerable dislocation in the mortgage industry. This outstanding team has been able to build a system designed for the new mortgage environment and obtain access to capital when few other teams can. We believe this is a testament to the team’s historical success and the industry’s confidence in their capabilities going forward.”

ABOUT loanDepot

loanDepot, based in Irvine, CA, is a 3rd generation online direct-to-consumer lender servicing multiple states. The company founder, industry veteran Anthony Hsieh, with a world-class executive team, is well known for pioneering the Internet mortgage industry, building two highly successful companies and merging them into publicly-traded companies, E*TRADE Mortgage (NASDAQ: ETFC) and LendingTree Loans (NASDAQ: TREE), both of which are still in operation today. loanDepot is committed to delivering a better, faster, more efficient process and industry-leading rates while delivering the best service in the industry.

ABOUT PARTHENON CAPITAL PARTNERS

Parthenon Capital Partners is a leading mid-market private equity firm based in Boston and San Francisco. Parthenon utilizes niche industry expertise and a deep execution team to invest in growth companies in service industries. Parthenon seeks to be an active and aligned partner to management, either through recapitalization transactions or by backing new executives. Parthenon has particular expertise in business services, financial and insurance services and healthcare, but seeks any service, technology or delivery business with a strong value proposition and proprietary know-how. Parthenon’s investment team has deep experience in corporate strategy, capital markets and operations, enabling the firm to pursue complex, multi-faceted value creation opportunities. For more information, visit www.parthenoncapitalpartners.com.


Calera Capital Buys Rock-It-Cargo

Calera Capital has acquired a majority stake in Rock-It-Cargo LLC, a Philadelphia-based provider of specialty freight forwarding and logistics services. No pricing terms for the all-equity deal were disclosed.

PRESS RELEASE

Calera Capital, a leading middle-market private equity firm, announced today an investment in Rock-It Cargo LLC (“Rock-It” or the “Company”) in partnership with Rock-It management.

Rock-It, headquartered in Philadelphia, PA, is a leading provider of specialty freight forwarding and logistics services. The Company was founded in 1978 with an initial focus on providing international freight forwarding services to the global music touring and live events industries. Over the past nine years, Rock-It has expanded into complementary non-touring logistics markets including specialty industrial projects, corporate live events, sports events, theatre, trade shows and fine art exhibitions. Across all markets, the Company’s logistics projects are characterized by international destinations, a meaningful degree of complexity, and critical time sensitivity.

James Halow, a Principal at Calera Capital, stated, “We have spent over 18 months getting to know Rock-It’s management and its business and are excited about partnering with the Company in the next stage of its development. Rock-It has strong brands, a long track record of executing for its clients and an attractive, defensible business model. As such, the business should be uniquely positioned to benefit from strong underlying trends in music touring and continued expansion in new and existing markets.”

David Bernstein, CEO of Rock-It Cargo, said, “The Company has an incredible set of opportunities ahead of it. Calera will be a valued partner as we look to further extend the Rock-It platform, enable our independent brands to grow more quickly, execute on operational initiatives and grow in targeted segments both organically and through acquisition. Most importantly, we fully intend to preserve the strong, client-focused culture that has driven our success as we pursue these opportunities and continue to build the business.”

Calera Capital will be investing in Rock-It through its fourth fund and on an all equity basis. Terms of the transaction were not disclosed.

About Rock-It Cargo LLC

Rock-It Cargo LLC excels at delivering logistics solutions for the most challenging projects. The Company specializes in handling complex itineraries, international destinations, fragile cargo and time-sensitive schedules – all with the highest degree of critical planning, execution and customer-focused service. Rock-It Cargo is a global organization with over 200 employees in 23 offices in the US and around the world.

About Calera Capital

Founded in 1991, Calera Capital, formerly known as Fremont Partners, is a private investment firm which has approximately $2.8 billion of capital under management. With offices in San Francisco and Boston, Calera invests across a diverse range of industries including financial services, business services, food and consumer, healthcare, building products, and industrial manufacturing. Calera Capital makes substantial equity investments in operating companies, typically with enterprise values up to $1 billion, and seeks to build long-term sustainable value by working with management teams to implement strategic and operating initiatives. More information can be found at www.caleracapital.com.


Blackstone Steps Into Highland Hospitality

NEW YORK (Reuters) - Private equity firm Blackstone Group (BX.N) is aiming to control the restructuring of hotel owner Highland Hospitality Corp, a source familiar with the matter said on Tuesday, confirming a report in the Wall Street Journal.The buyout firm purchased a key slice of Highland’s debt from Wachovia Corp, the paper reported. This was confirmed by the source.

Highland, a real estate investment trust that owns 27 hotels, is struggling to restructure its $1.7 billion debt load amid the worst downturn for the hotel industry in decades, the Wall Street Journal said.

JER Partners, the private equity investment arm of J.E. Robert Companies, bought Highland for $2.1 billion, including the assumption of $210 million in debt in 2007, according to a JER press release that year.

At that time, Highland owned 28 luxury and limited-service hotels, including properties operated by Marriott International (MAR.N).

Highland could not be immediately reached for comment when contacted by Reuters after hours. Blackstone declined comment.

(Reporting by Megan Davies and Deepa Seetharaman; Editing by Phil Berlowitz)


Deutsche Post Receives Bid for French Parcel Biz

DUESSELDORF, Germany (Reuters) - Deutsche Post DHL said it received an offer for its French domestic parcel business, which it aims to offload by the end of March to focus on its profitable express delivery business.

The news comes a day after Deutsche Post, Europe’s biggest mail and express delivery company, sold its UK domestic parcel business to Britain’s Home Delivery Network for an undisclosed price. 

Financial investor Caravelle has made an offer for the French business, which has about 3,400 employees, a spokesman for Deutsche Post said on Wednesday.

Media has already speculated last month that a sale to Caravelle was in the making, saying that the deal could be valued between $200 million and $300 million.

The Post spokesman said there were no plans to sell any international businesses or the express delivery operations.

Shares of Deutsche Post were up 0.5 percent at 14.07 euros by 1103 GMT, while Germany’s blue-chip index .GDAXI was unchanged. (Reporting by Matthias Inverardi; Writing by Maria Sheahan)


Lehman PE Spinout Trilantic Nearing Deal – Scoop

Trilantic Capital Partners is close to inking its first platform acquisition since spinning out of Lehman Brothers Merchant Banking.

Executives at the New York-based shop expect to buy MicroStar Logistics, a company that helps breweries manage their kegs, from Macquarie Group Ltd., according to a regulatory filing and two sources with knowledge of the deal.

The firm should close the deal by the end of the week, our sources said. Equity for the investment will come from Trilantic Capital Partners IV LP, according to the filing. The firm closed the $3.3 billion fund in June 2007; about $1.7 billion of the pool was still available at the time Trilantic Capital spun out of Lehman Brothers.

Greenwood Village, Colo.-based MicroStar provides a management system that delivers full kegs and picks up the empties, tracks their delivery, repairs and maintains kegs, and manages the inventory for client breweries. The idea is to save the brewer time and money that could be spent on brewing beer. The company works with more than 1,600 beer wholesalers in all 50 states and in Europe, according to its Web site. Macquarie bought the company in February 2008.

The deal would mark the first platform acquisition for Trilantic Capital since the firm’s management along with Reinet Investments SCA, a Luxembourg-based investment firm, acquired the buyout shop in April 2009.

Trilantic Capital is managed by Charles Ayres, the former managing director and head of global merchant banking for Lehman Brothers, along with four founding partners: E. Daniel James, Joseph Cohen, Vittorio Pignatti-Morano and Javier Banon. The firm employs 21 investment professionals in all, with 11 devoted to North America, nine devoted to Europe, and Ayres working as global chairman.

The firm’s last significant deal was in October 2008, when it bought a 40 percent stake in SRAM Corp., a Chicago based designer and maker of bicycle components, according to Capital IQ.

The Trilantic Capital team has typically invested in North American and Western European companies in a wide variety of sectors, including business services, consumer, energy, and financial services. In the U.S., the firm typically invests between $50 million and $180 million in companies with enterprise values of between $100 million and $1 billion.

Jon Mattson, a partner at Trilantic Capital, Alex Doughty, a spokesman for Macquarie, and Lauri Honea, president of MicroStar, declined to comment.

This post was originally published at the website of Buyouts magazine.


Bankruptcy Court Approves Simmons Restructuring

NEW YORK (Reuters) - Simmons Bedding Co said on Tuesday it had won bankruptcy court approval to be taken over by affiliates of Ares Management LLC and Teachers’ Private Capital and emerge from bankruptcy by Jan. 20.

The Atlanta-based mattress maker said that the U.S. Bankruptcy Court for the District of Delaware had approved its pre-packaged restructuring plan, which helps the company cut debt by more than half, to about $450 million.

In a pre-packaged bankruptcy, a company reaches agreements with creditors on reorganization and repayment before it files a bankruptcy petition.

Asset manager Ares and Teachers’ Private Capital, the private investment department of the Ontario Teachers’ Pension Plan, which already own rival mattress maker Serta, will take control of Simmons in a transaction valued at about $760 million.

The deal includes the domestic and international subsidiaries of Simmons, as well as its parent Bedding Holdco Inc.

“The company’s historical performance is excellent when measured against our core investment criteria,” Erol Uzumeri, senior vice-president of Teachers’ Private Capital, said in a statement. “With its new capital structure, we are confident this investment will produce significant returns for us and all of its stakeholders — both now and over time.”

The combination of Serta and Simmons could dethrone the current world leader Sealy Corp (ZZ.N), as the two brands would have a combined market share larger than Sealy, according to market research firm IBISWorld Inc, in November.

Affiliates of private equity firm Kohlberg Kravis Roberts & Co [KKR.UL] held 50.9 percent of Sealy as of Aug. 30.

The plan provides for all trade vendors, suppliers employees, and senior secured lenders to be paid in full.

The maker of Beautyrest and ComforPedic mattresses filed for Chapter 11 bankruptcy protection in November

Miller Buckfire & Co and law firm Weil, Gotshal & Manges LLP are advising Simmons. Goldman Sachs & Co (GS.N) and law firm Sullivan & Cromwell LLP are advising the buyers. (Reporting by Chelsea Emery; editing by Gunna Dickson)


Ontario Teachers Buying AIG’s Canadian Mortage Insurance Biz

TORONTO (Reuters) - The Ontario Teachers’ Pension Plan said on Tuesday it is buying AIG Inc’s (AIG.N) Canadian mortgage insurance business, which has assets of C$274 million ($263 million).

Teachers, one of Canada’s largest investors, said it is the lead sponsor of a private investor group in the deal to buy AIG United Guaranty Mortgage Insurance Company Canada, the second-largest private mortgage-insurance provider in Canada.

“We believe the mortgage insurance industry in Canada to be an attractive market, and that United Guaranty Canada is well positioned to grow its market position,” Erol Uzumeri, senior vice-president of Teachers’ Private Capital, said in a statement.

“The company has a strong management team, and Teachers is prepared to support the growth of the business,” Uzumeri said.

Terms of the deal were not disclosed.

($1=$1.04 Canadian) (Reporting by Andrea Hopkins; editing by Peter Galloway)


Exclusive: Linsalata In Talks With Eatem Corp.

Linsalata Capital Partners is hungry to expand its holdings in the food industry.

Executives at that firm are in talks to buy Eatem Corporation, a Vineland, N.J.-based company that makes bases and concentrates used in soups and other food products, according to a regulatory filing.

If the deal proceeds, the Mayfield Heights, Ohio-based buyout shop will make the investment out of its latest fund, Linsalata Capital Partners Fund V LP, according to the filing. The firm closed the $425 million pool of capital in 2005.

Founded in 1983, Eatem, which does business as Eatem Foods, makes products including beef and chicken bases, kosher bases, seafood bases and vegetarian bases used in soups, sauces and other foods. The company touts itself as a pioneer of low-sodium, meat-first bases and vegetarian, organic and kosher bases, according to its Web site.

After mounting a three-year research effort, Linsalata Capital entered the food market in September 2008, buying Hospitality Mints Inc., a Boone, N.C.-based company that makes promotional mints and candies. At the time of that deal, Linsalata Capital Senior Managing Director Eric Bacon told Buyouts the firm was looking for deals in private label (store-brand) food, niche branded food, and companies that provide food-related services to schools and hospitals. In December 2009 the firm agreed to by Spartan Foods of America, a Spartanburg, S.C.-based company that makes pizza crust and pancakes sold in grocery stores under the names Mama Mary’s and Mystic Pizza, from a group of investors including Azalea Capital, CapitalSouth Partners and Harbinger Mezzanine Partners LP.

The prospective sellers of Eatem are listed in the filing as James J. Gervato, the company’s director of sales and marketing, and Robert G. Buono, Sr., the treasurer and business manager.

Executives at Linsalata Capital declined to comment. Gervato, of Eatem, did not return requests for comment by deadline and Buono could not be reached for comment.

This article was previously published on the website of Buyouts magazine.


Six Suitors for Siemens Hearing Aid Unit

LONDON/FRANKFURT (Reuters) - Siemens AG (SIEGn.DE) has shortlisted a strategic buyer and five private equity firms as potential buyers of its hearing aid unit, potentially worth over 2 billion euros ($2.89 billion), several people familiar with the matter said.

Siemens, the German industrial conglomerate, makes a broad range of products from trains to light bulbs, but is sharpening its focus on core areas and put the unit up for sale late last year.

The auction, now in its second round, points to a returning appetite for multi-billion euro European leveraged buyouts (LBOs) by private equity firms, which have been starved of debt and deal opportunities for much of last year.

Bain Capital, Cinven [CINV.UL], Hellman & Friedman, KKR [KKR.UL] and Permira [PERM.UL] are all vying for the unit, which Siemens hopes will fetch more than 2 billion euros, the sources said. A strategic acquirer is also seeking to buy the unit, they said.

Cinven, Permira and Siemens declined to comment. Bain, H&F and KKR were not immediately available to comment.

Two of the buyout houses are working together, one of the sources said, adding that some other trade bidders such as Danaher Corp (DHR.N) and Procter & Gamble Co (PG.N) had earlier shown interest but had since left the race.

The field of private equity firms has been narrowed from a much wider initial group, including CVC [CVC.UL] and BC Partners, the sources said.

RIVALS

The unit, which competes with Switzerland’s Sonova Holding AG (SOON.VX) and Denmark’s William Demant Holding A/S (WDH.CO), is projected to make earnings before interest, tax, depreciation and amortisation (EBITDA) of some 170 million euros in 2010, the sources added.

The listed rivals trade at a market value of about 16.5 times and 15 times forecast EBITDA, based on earnings forecasts compiled by Thomson Reuters I/B/E/S. Antitrust hurdles are likely to preclude bids from either company.

However, the Siemens unit performed less well than either rival in 2009, some of the sources said, with both revenues and margins shrinking, and is likely to sell at a lower multiple.

But Siemens projects strong growth at the unit and bidders will be hoping they can rapidly improve its fortunes, the sources added.

DEAL APPETITE

Bidders will now gain access to a data room and hear management presentations in the coming days, the sources said. After receiving binding bids, Siemens hopes to pick a winning bidder by the end of February, they added.

The auction underlines a returning hunger among private equity firms for deals: buyout firms are circling several major European businesses including German drugmaker Ratiopharm and British retailers Pets at Home and Matalan [MTLAN.UL].

The funds are hoping to capitalise on renewed appetite from banks to lend, after Sweden’s EQT secured a 1 billion pound ($1.61 billion) loan to buy Springer Science and Business Media [SPSBM.UL] in December. [ID:nN18217896]

Buyout firms may be able to raise debt equivalent to as much as 5.5 times the Siemens unit’s EBITDA, one of the sources said, equating to roughly 935 million euros. That would still require a bidder to fund more than half a 2 billion euro deal with equity.

Shares in Siemens were 0.2 percent higher at 65.62 euros by 1305 GMT, giving the company a market capitalisation of close to 57 billion euros.

UBS is running the sale. ($1=.6920 Euro) ($1=.6208 Pound) (Visit the Reuters DealZone blog here)

By Quentin Webb and Philipp Halstrick
(Additional reporting by Simon Meads in London, Marilyn Gerlach in Frankfurt and Jens Hack in Munich; editing by Elaine Hardcastle and Rupert Winchester)


CD&R Closes Fund, Completes Third Deal in ‘09

Clayton Dubilier & Rice has closed its eighth fund with $5 billion in capital commitments, according to a source familiar with the situation. An announcement is expected shortly.

The New York-based firm originally began fundraising almost two years ago with listed hard cap of $7.5 billion, after having raised $4 billion for its seventh fund in 2006.

CD&R is one of those in-between-sized firms that tends to fly below the radar. With a $5 billion fund, it isn’t quite a mega-firm, but it’s not middle-market either. The firm typically does just one deal per year, which makes 2009 a big one for CD&R. Last year CD&R closed three deals, all paid for by its new fund.

On Christmas Eve, the firm announced its acquisition of BCA, a UK-based seller of autos from corporate lessees and rental businesses to used car dealers. The deal value was not disclosed, but a source familiar with the deal said CD&R paid £319 million for the company (including around a 55% equity check). The firm used eight banks to finance the transaction.

Montagu Private Equity, formerly HSBC Private Equity, launched an auction for the company in October, with the goal of exiting the company by the year’s end as it prepares to launch its second fund (prior vehicle is a 2005 vintage with £2.2 billion in commitments). The auction included bids from Bridgepoint, Cinven and BC Partners, according to reports. Dave Novak, partner with CD&R said the firm’s industry expertise helped it win the deal. “We started looking at the car auction business in 2000, and have been around auto-related businesses since 2005, when we bought Hertz,” he said. That gave the seller confidence in the firm’s speed and certainty of closing, he added.

CD&R found the company attractive because it’s a market-leading business-to-business company in both the UK and continental Europe, the latter being less-mature market which the firm hopes capitalize on. Novak compared the growth plans to CD&R’s investment in Brakes, a food service distributer the firm sold in 2007. Brakes had penetrated the more mature British market but CD&R led its growth into Europe. Europe represents around one third of the CD&R’s deal activity and employees.

The firm believes distribution businesses, like BCA, serving many customers through many deals provides an attractive distribution of risk. Likewise, the firm will introduce best practices across the company’s many regional branches, Novak said. CD&R is particularly interested in BCA’s online business, which has shown double digit growth in the past year, he said.

CD&R’s deal and fund closings cap an active year for the firm. In October, the firm made a $250 million equity investment in the NCI Building Systems, a maker of metal products for nonresidential buildings. That same month, the firm invested $477 million for get a 46% stake in commercial cleaning company JohnsonDiversey.

The firm’s fifth fund, a 1995 vintage, earned a 1.03x return; its sixth fund, a 1998 vintage, has earned a 1.43x return, according to data from Washington State Investment Board.


Lyceum Capital Buys McKinnon and Clarke

Lyceum Capital has acquired a majority stake in McKinnon and Clarke, a Scotland-based energy procurement and compliance consultant. The deal gives M&C and enterprise value of £22 million. wwwlyceumcapital.co.uk


BB&T Capital Buys Jones & Frank Corp.

BB&T Capital Partners has acquired Jones & Frank Corp., a Norfolk, Va.-based provider of petroleum equipment and services on the East Coast. No financial terms were disclosed. Parkway Capital Investors co-invested on the equity, while Parkway and SunTrust Bank provided leveraged financing. Matrix Capital Group managed the sale process.

PRESS RELEASE

Matrix Capital Markets Group, Inc. announced today the sale of Jones & Frank Corp. to an investor group that was led by BB&T Capital Partners and included Parkway Capital Investors and the company’s former owners and existing management team. Senior and subordinated debt for the transaction was provided by SunTrust Bank and Parkway Capital Investors, respectively. Jones & Frank Corp., founded in 1945 and based in Norfolk, Virginia, is a leading provider of petroleum equipment and services to the retail and commercial segments of the petroleum industry along the East Coast. Matrix Capital Markets Group served as exclusive financial advisor to Jones & Frank. The transaction was led by Mike Morrison, Bill Kerkam, David Shoulders and Lauren Sharp.

Sterling Baker, CEO, noted that, “This transaction provided both liquidity for existing owners, as well as a mechanism to provide future ownership to employees.” O.L. Everett, former majority shareholder, added, “We hired Matrix Capital to execute a formal process and were very pleased with the results. BB&T Capital Partners emerged as the best choice to support the company’s continued growth and profitability.”

“BB&T Capital Partners is excited to partner with Sterling Baker, CEO, and the Jones & Frank team. Jones & Frank has a long tradition of providing high quality service and support to its customers, which has led to strong, long-standing customer relationships,” commented Martin Gilmore, Partner at BB&T Capital Partners. “This transaction will provide significant capital for continued growth, and in particular, an active industry consolidation strategy. We believe that there is significant opportunity in the fuel equipment distribution and service sector, as shifting demands, stiffening regulatory requirements and new technology drive continual change.”

Mike Morrison, Managing Director and Principal of Matrix Capital Markets Group, commented, “Jones & Frank’s consistent performance and strong management team enabled us to attract strong interest for this recapitalization. We are excited to see O.L. Everett and Sterling Baker begin a new partnership with an investor that understands the industry and shares their vision.”

In 2008, Jones & Frank won Gilbarco/Veeder-Root’s “Southern Distributor of the Year” award for its outstanding sales performance. The company employs over 200 employees. To learn more about Jones & Frank, visit their website at www.jones-frank.com.

NEWS
RELEASE
For Immediate Release

December 21, 2009

For more information, contact:

Managing Directors
Thomas E. Kelso
Jeffrey G. Moore
Michael C. Morrison
William H. Weirich

Directors
Spencer P. Cavalier

Vice Presidents
R.H. Butler, Jr.
Cedric C. Fortemps
C. Bryan Johnson
William B. Kerkam, IV

Corporate Headquarters
11 South 12th Street, 3rd Floor
Richmond, VA 23219
804.780.0060
www.matrixcapitalmarkets.com

100 South Charles St., Suite 1350
Baltimore, MD 21201
410.752.3833
www.matrixenergyandretail.com

About Matrix Capital Markets Group

Matrix Capital Markets Group is a leading middle-market investment bank headquartered in Richmond, Virginia. Since 1988, Matrix has focused on providing merger & acquisition and financial advisory services for corporate and privately-held companies, including sales and divestitures, Staged Liquidity Transactions®, management buyouts, and debt & equity placements. For additional information, please visit www.matrixcapitalmarkets.com.


Butler Completes Combo With Schein US Animal Health Biz

Henry Schein Inc. (Nasdaq: HSIC) has completed the merger of its US animal health business with Butler Animal Health Supply, a portfolio company of Oak Hill Capital Partners and The Ashkin Family Group. The combined animal health distribution company has been renamed Butler Schein Animal Health, and would have had around $850 million in revenue over the past 12 months. Henry Schein holds a 50.1% stake in the newly formed entity, with Butler owners holding the other 49.9 percent.

PRESS RELEASE

Henry Schein, Inc. (NASDAQ: HSIC) and Butler Animal Health Supply today announced the closing of the transactions to form Butler Schein Animal Health, a new company that combines Butler Animal Health Supply and Henry Schein’s U.S. Animal Health businesses.  Butler Schein Animal Health is 50.1%-owned by Henry Schein and 49.9%-owned by the owners of Butler Animal Health Supply (Oak Hill Capital Partners and The Ashkin Family Group).  The transaction was announced on November 30, 2009 and closed on December 31, 2009.

 

Headquartered in Dublin, Ohio, Butler Schein Animal Health is the leading U.S. companion animal health distribution company with combined revenues for the last 12 months of approximately $850 million on a U.S. GAAP (General Accepted Accounting Principles) basis.  Approximately 900 Butler Schein Animal Health team members, including approximately 300 field sales representatives and approximately 200 telesales and customer support representatives, will serve animal health customers in all 50 states. 

 

 “We are delighted to announce the formation of Butler Schein Animal Health, and look forward to new opportunities for the combined businesses to share best practices.  Butler Schein Animal Health has the largest veterinary sales and distribution footprint in the U.S., and begins operations with the outstanding reputation and strong customer focus that are the hallmarks of Henry Schein and Butler Animal Health Supply,” said Henry Schein Chairman and Chief Executive Officer, Stanley M. Bergman.

 

“The foundation of Butler Schein Animal Health is a relentless focus on customers and a company-wide commitment to exceeding their expectations,” said Kevin R. Vasquez, Chairman, President and Chief Executive Officer of Butler Schein Animal Health and former Chairman, President and Chief Executive Officer of Butler Animal Health Supply.  “Through a close working relationship with our supplier partners we will offer veterinarians nationwide the broadest selection of products and value-added services in the industry.  With seasoned veterinary professionals at all levels of the organization, we are confident that manufacturers will benefit from our unmatched reach and marketplace insight and customers will gain from one-stop shopping and superior customer service.”

 

About the Henry Schein Animal Health Businesses

Henry Schein’s U.S. Animal Health business includes Henry Schein’s telesales and field sales organizations as well as NLS, which was acquired in 2006.  These operations serve more than 10,000 clinics and veterinary practices through a national network of distribution centers, and online through www.henryschein.com, www.nlsanimalhealth.com and www.MyVetDirect.com.

As the leading animal health products distributor in Europe, Henry Schein’s International Animal Health business serves more than 18,000 customers and has operations in Austria, the Czech Republic France, Germany, Portugal, Spain, Switzerland and the United Kingdom.  Henry Schein’s International Animal Health business will continue to be operated by Henry Schein and is not part of Butler Schein Animal Health.  Henry Schein’s International Animal Health business had sales in the last 12 months of approximately $620 million.

 

About Butler Animal Health Supply

Butler Animal Health Supply is the nation’s largest distributor of companion animal health supplies to veterinarians. Headquartered in Dublin, Ohio, the Company has 16 distribution centers and seven telecenters.  Butler Animal Health Supply serves over 25,000 veterinary clinics in all 50 states and distributes over 12,000 products from more than 445 vendors.  The organization includes the industry’s largest and highest-ranked sales force of approximately 375 sales representatives, including 220 field sales representatives and 155 telesales representatives.  For more information, visit Butler Animal Health Supply at www.accessbutler.com.

 

About Henry Schein

Henry Schein, a Fortune 500® company and a member of the NASDAQ 100® Index, is the largest provider of health care products and services to office-based practitioners.  Recognized for its excellent customer service and highly competitive prices, the Company’s four business groups – Dental, Medical, International and Technology – serve approximately 590,000 customers worldwide, including dental practitioners and laboratories, physician practices and animal health clinics, as well as government and other institutions.  Henry Schein operates through a centralized and automated distribution network, which provides customers in more than 200 countries with a comprehensive selection of more than 90,000 national and Henry Schein private-brand products in stock, as well as more than 100,000 additional products available as special-order items.  Henry Schein also provides exclusive, innovative technology offerings for dental, medical and veterinary professionals, including value-added practice management software and electronic health record solutions. 

Headquartered in Melville, N.Y., Henry Schein employs more than 13,500 people and has operations or affiliates in 23 countries.  The Company’s net sales reached a record $6.4 billion in 2008.  For more information, visit the Henry Schein Web site at  www.henryschein.com.


PE Deals Down 43% in 2009, Lowest Year Since 2002

Despite a slight increase in fourth quarter deal activity, private equity deals in 2009 fell to a level not seen since 2002. By value, PE deals fell by 43% year-over-year, from $236 billion in 2008 to $134 billion this year. Volume fell as well: Last year buyout firms did 3,951 deals; in 2009 just 2,611 closed.

But (But!), there’s hope. Large deals picked up in the fourth quarter, with deal value jumping from $39 billion in Q3 to $48 billion. (And that’s more than double the total value in Q4 of last year, where just $22 billion worth of deals were completed.) That figure indicates an increase in large deals because volume actually dropped in the fourth quarter, from 702 deals in the third quarter to 677 deals in the fourth quarter.

You can download a spreadsheet with Thomson Reuters deal data, including worldwide M&A, going back to 2002, below.

Thomson Reuters M&A Data 2009


Sentinel Capital Buys Massage Envy

Sentinel Capital Partners has acquired Massage Envy LLC, a Scottsdale, Ariz.-based provider of therapeutic massage services. No financial terms were disclosed.

 PRESS RELEASE

Sentinel Capital Partners, a private equity firm that invests in promising smaller middle-market companies, today announced it has acquired Massage Envy, LLC. Based in Scottsdale, Arizona, Massage Envy is the nation’s largest provider and franchisor of therapeutic massage services. Financial terms of the transaction are not being disclosed.

Massage Envy offers professional and affordable therapeutic massage services to consumers with busy lifestyles, offering convenience, high quality, and excellent value. Since its founding in 2002, Massage Envy has established itself as the leading franchisor of massage therapy services in the United States, with more than 600 clinics operating in 42 states generating more than $450 million in systemwide sales. With a highly trained and committed workforce of more than 10,000 employees, Massage Envy offers a range of services that include full-body and partial-body massage therapies and facial skin treatments.

Massage Envy operates through a membership model, giving the company and its franchisees the benefit of recurring, predictable revenues. In 2009, Entrepreneur magazine’s Franchise 500® ranked Massage Envy as one of the nation’s 20 “Fastest Growing Franchises” in addition to #1 in the “Massage Services” category.

“We are very proud of Massage Envy’s market leadership and are excited about the growth prospects for our convenient, high-quality, competitively priced therapeutic massage and spa services,” said David Humphrey, CEO of Massage Envy. “Sentinel has a proven record of helping franchise businesses grow and build value, and with Sentinel as our partner, we possess the strategic and financial resources to capitalize on our numerous growth opportunities,” added Mr. Humphrey.

“At Sentinel, we aim to form strong partnerships with talented management teams of businesses that are market leaders in industries we know well,” said John F. McCormack, a co-founder and senior partner at Sentinel. “We have been investing in multi-unit and franchising businesses for more than 20 years, and we are very excited to be partners with Massage Envy’s highly capable management team.”

According to the American Massage Therapy Association, the many powerful benefits of therapeutic massage include reducing fatigue, lower back pain, and post-operative pain; boosting the body’s immune system; decreasing the symptoms of carpal tunnel syndrome; lowering blood pressure; and diminishing headache frequency.

“Massage Envy has taken an exclusive, high-priced service and made it affordable to and accessible for the general public. Today, millions of Americans find therapeutic massage to be an invaluable component of their wellness,” said Jim Coady, a partner at Sentinel. “With more than 200 additional franchise licenses in development and more than 680,000 Massage Envy members nationwide, we are very excited about the company’s prospects to continue to expand its geographic footprint and grow its delivery system.”

Sentinel has invested in several franchise and multi-unit businesses, including Border Foods, a leading franchisee in the Taco Bell system; Castle Dental, a leading dental clinic operator in the Sunbelt; Cottman Transmission Systems, the nation’s second-largest franchisor of transmission repair depots; Falcon Holdings, one of the largest franchisees of Church’s Chicken restaurants; Interim Healthcare, the nation’s largest provider and franchisor of home healthcare services; Metro Dentalcare, a leading dental clinic practice operator in the Minneapolis/St. Paul area; and Southern California Pizza Company, a 224-unit Pizza Hut franchisee operating in the greater Los Angeles market.

About Sentinel Capital Partners

Sentinel Capital Partners specializes in buying and building smaller middle- market companies in the United States and Canada in partnership with management. Sentinel targets consumer products, food and restaurants, franchising, manufacturing, and service businesses. Sentinel invests in management buyouts, recapitalizations, corporate divestitures, and going-private transactions of established businesses with EBITDA of between $5 million and $35 million. For more information about Sentinel, visit www.sentinelpartners.com.

About Massage Envy

Massage Envy, LLC, based in Scottsdale, Arizona, is the largest provider and franchisor of therapeutic massage and spa services in the United States. Massage Envy clinics are dedicated to providing professional and affordable therapeutic massage services to consumers with busy lifestyles at convenient times and locations. Massage Envy Spa is its newest concept, featuring Murad® facial treatments and therapeutic massages. Founded in 2002, Massage Envy franchises more than 600 clinics in 42 states, with new locations opening every month. For more information, visit www.MassageEnvy.com.


Metalmark Backs Jones Energy Purchase

Metalmark Capital has provided an undisclosed amount of equity capital to Texan oil and gas company Jones Energy, to support its subisidiary’s purchase of bankrupt Crusader Energy Group LLC. Wells Fargo Securities arranged debt financing.

PRESS RELEASE

Jones Energy (“JE”) announced today that its subsidiary, J/M Crusader Acquisition Sub LLC, has completed its purchase of all shares of common stock of Crusader Energy Group, LLC (“Crusader”), consistent with Crusader’s reorganization going into effect under Chapter 11 of the United States Bankruptcy Code. As mandated by Crusader’s reorganization plan, all of the outstanding equity interests in that entity were cancelled and Crusader and its subsidiaries became wholly-owned subsidiaries of JE.

To fund the transaction and refinance its existing credit facilities, JE raised equity capital from Metalmark Capital (“Metalmark”) as well as third-party debt capital from various financial institutions. Wells Fargo Securities acted as the sole lead arranger and sole bookrunner for the new debt facilities.

“This transaction will further enhance our leadership position in the Texas Panhandle energy business and provide expanded opportunities in our core Cleveland and Granite Wash formations where we have significant experience, having drilled over 450 wells in this area over the past decade,” said Jonny Jones, Founder and CEO of JE. “With the equity investment that is being provided by our partner Metalmark in connection with the Crusader acquisition, JE is very strongly capitalized and is particularly well positioned to increase drilling activity on existing and newly acquired acreage. We are enthusiastic about leveraging our strengths in integrating the Crusader assets into our company and having Metalmark as our lead equity investor.”

“Jonny and his team have established a solid expertise as a premier operator in the Anadarko Basin and this transaction is highly synergistic with JE’s existing assets, operations and knowledge base,” said Greg Myers, Managing Director of Metalmark Capital. “We are excited to be partnering with the JE team in this transaction and working closely with the management of the company to help take their business to the next level, by providing them with the assistance and resources to grow their operations over time.”

JE is a leading oil and gas company operating in the Anadarko Basin. The transaction significantly strengthens JE’s position in that region, providing substantial additional reserves to JE in the Cleveland and Granite Wash formations in areas contiguous with JE’s existing operations. Crusader also possesses significant oil and gas assets and acreage positions in the Fort Worth Basin (Barnett Shale), West Texas (Woodford and Barnett Shale) and the Williston Basin (Bakken Shale) that will leverage JE’s horizontal drilling expertise and further expand its geographic footprint.

About Jones Energy

Jones Energy is an established exploration and production company headquartered in Austin, Texas focused almost exclusively in an eight county region in the Texas Panhandle. Founded in 1988, JE is widely recognized as a preeminent Cleveland operator and has joint ventures with some of the largest oil and gas companies, including ExxonMobil, BP, ConocoPhillips, and Devon. The Crusader transaction expands JE’s geographic footprint into the Fort Worth Basin (Barnett Shale), West Texas (Woodford and Barnett Shale), and the Williston Basin (Bakken Shale).

For more information, please visit www.jonesenergy.com.

About Metalmark Capital

Metalmark Capital is a leading private equity firm whose principals have a long track record of successful investing in targeted sectors, with particular focus and competence in energy and natural resources, industrials and healthcare. Metalmark Capital seeks to build long-term value through active and supportive partnerships with the companies and management teams in which they invest. Metalmark Capital is an investment center of Citi Capital Advisors.

For more information, please visit www.metalmarkcapital.com.