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Lies, Damned Lies And … The Middle Market

The Leading Authority on Corporate Growth.

August 7, 2008 — Northwest Growth Financing Conference
Register early for ACG Seattle’s Northwest Growth Financing Conference, the Northwest's premier conference for financing the growth of "middle market" companies. Throughout the day, panels will examine the financing options available to "middle market" companies in a format guaranteed to generate lots of interaction among the panelists as well as the audience. Other event highlights include a Middle Market Finance Roundup and a concluding hors d’oeuvres and wine tasting function.

August 13, 2008 — ACG Central Texas Lunch Meeting With Paul B. Walker
Lunch with ACG Central Texas at the Shoreline Grill in Austin, TX, and pick up brand-building tips from business development expert Paul Walker. As the CEO of GCI Media, Paul is responsible for advising GCI clients like Dell, Whole Foods, Darden, and Nike on how they can exploit the Internet, social computing, and emerging technologies to build their brands, develop markets, and generate positive word-of-mouth. RSVP online or by phone for this noon lunch meeting by Friday, August 8.

August 13, 2008 — ACG Portland Golf Tournament
ACG Portland invites you to take part in this year’s golf tournament at Langdon Farms in Aurora, OR. Team up with fellow members for an afternoon of golf and networking at what has been recognized by the Portland Business Journal as the best course in Oregon to hold a tournament.

DEALS

KKR Announces Plans To Go Public

Back-door route to public transition requires acquisition of Amsterdam subsidiary.

Monomoy Capital Acquires Catalog Co.

Monomoy Capital Partners has acquired the assets and operations of the Missy Group from Redcats USA, Inc., a subsidiary of the Redcats Group, Inc., a business unit of the multinational French holding company PPR, S.A. The new company will be named the Women’s Apparel Group, LLC. The Women’s Apparel Group is a catalog and Internet retailer of clothing and accessories marketed under the Chadwick’s, Metrostyle and Closeout Catalog Outlet brands. Richard Porter and Travis Nelson of Kirkland & Ellis, LLP represented Monomoy in the acquisition; Crowe Chizek provided financial and accounting diligence; and SD Retail Consulting, Inc. provided strategic business review and advice.

High Road Closes on Milwaukee Gear

High Road Capital Partners, a New York City-based leveraged buyout firm, completed its acquisition of Milwaukee Gear Company and Treat All Metals, a sister company. Terms of the transaction were not disclosed. Milwaukee Gear is a Milwaukee, Wisconsin-based industrial manufacturer. Treat All Metals is a continuous heat-treating provider. This transaction is the first deal for High Road Capital Partners Fund I, LP, the firm’s entrant fund. Babson Capital Management and JP Morgan Chase provided debt financing for the transaction. High Road manages about $150 million in committed capital, and is focused on the acquisition of smaller mid-market deals. The firm was founded in 2007.

Unilever Snuggles with Vestar

Unilever will jettison its laundry assets, in the form of Wisk, Surf, Sunlight and Snuggle—who could forget the high-pitched intonations of quarter-century old Snuggle Bear on television ads?—to private equity firm Vestar Capital Partners. The products will be tucked into Huish Detergents, a company in which Vestar has majority share, to create the Sun Products Corp. Under the terms of the deal, Unilever will get about $375 million in Sun Products Corp. shares, warrants to buy more and a cash payment of more than $1.07 billion. The deal comes as no major surprise; Unilever had publicly pledged to shed ancillary brands. Neil DeFeo, currently a Huish director, will become chief executive of the new company. Cravath, Swaine & Moore LLP advised Unilever on the transaction; its banker was Morgan Stanley.

Blackstone Group To Purchase AlliedBarton

The Blackstone Group will acquire AlliedBarton Security Services, a provider of security personnel to many industries including commercial real estate, higher education, healthcare, residential communities, chemical/petrochemical, government, manufacturing and distribution, financial, and shopping centers and malls. Credit Suisse and Lehman Brothers acted as financial advisor to AlliedBarton. Bank of America, Blackstone Advisory Services, HSBC, and Anne Yang of Old Well LLC, acted as financial advisors to Blackstone. Skadden, Arps, Slate, Meagher & Flom LLP acted as AlliedBarton’s legal counsel. Simpson Thacher & Bartlett LLP acted as legal counsel to Blackstone.

The Sterling Group Sells Hudson Products To Riverstone Holdings

The Riverstone/Carlyle Global Energy and Power Funds has agreed to purchase Hudson Products from The Sterling Group, L.P. Hudson is a provider of air-cooled heat exchangers and axial flow fans to refinery, petrochemical, natural gas, power and other industrial and commercial end markets. Riverstone intends to invest additional equity capital to support Hudson’s growth plans, as well as other strategic initiatives going forward. Terms of the transaction were not disclosed.

H.I.G. Capital to Acquire PMSI

H.I.G. Capital has agreed to acquire PMSI from AmerisourceBergen Corp. This transaction is expected to close during the third quarter of 2008. PMSI is a provider of specialty managed care services and products for workers’ compensation and catastrophically injured populations. PMSI provides an integrated portfolio of services in Pharmacy, Medicare Set-Asides, Medical Services and Equipment, and Clinical Services.

The Carlyle Group Invests $75M In Boston Private

The Carlyle Group is investing approximately $75 million in newly issued equity securities of Boston Private, a national financial services organization. Goldman Sachs served as the financial advisor to Boston Private and Goodwin Procter LLP provided legal advice. Morgan Stanley served as financial advisor to Carlyle and Simpson Thacher & Bartlett LLP acted as Carlyle’s legal counsel. Boston Private has been evaluating alternatives to raise additional capital to further strengthen its balance sheet. This investment by Carlyle is an integral component of the overall capital raising plan that Boston Private has developed, which is expected to generate in excess of $185 million in new equity capital.

Please contact Naz Bayazit to inquire about advertising opportunities with this e-newsletter. Naz.Bayazit@sourcemedia.com.

FIRMS

Moody's Downgrades J.W. Childs Portfolio Co.

PE-owned mattress retailer could face further downgrades from rating agency if its performance doesn't improve.

Pine Brook, Comet Team Up In Energy JV

Pine Brook Road Partners has launched a new joint venture with Australian energy company Comet Ridge as part of a $100 million deal to extract oil and gas from the Rocky Mountains of Colorado. The New York private equity firm, which disclosed its new joint venture with Melbourne, Australia-based Comet Ridge late last week, is providing up to $100 million to finance oil and gas exploration efforts in Florence, Colo. Terms call for Pine Brook, a firm that invests in energy and financial service businesses, to own a majority stake in the venture named Comet Ridge Resources. Besides drilling in the Florence Oil Field, Comet Ridge Resources will also operate in the Pacific Northwest, principally in 425,000 acres of the Grays Harbor Basin of Washington State. For Pine Brook Road, a private equity firm launched in 2006 and led by former Warburg Pincus energy heavyweight Howard Newman, the deal marks another backing of a domestic energy business since last fall. That’s when the firm participated in two separate equity-line investor group financings involving Houston-based Common Resources and a Southeast Asia business named Asia Pacific Exploration Consolidated.

Goldman Buying Low?

Goldman Sachs has reportedly initiated efforts to develop a $10 billion fund that will back leveraged buyouts. A Financial Times piece illustrated that the fund will purchase senior loans, the first paid off by borrowers. The move is reportedly going to take advantage of financing markets shortfalls created by the credit crunch. The fund represents a continuation in the trend that has private equity and debt investment used together. Goldman already has together a mezzanine debt fund—those debts paid after senior loans—of $20 billion. Together, the funds can commit to substantial deals without even needing to rope in additional investors or debt. Goldman’s mezzanine fund has already made buys, in the form of $1 billion in First Data’s debt and about $1.2 billion of Harrah’s Entertainment’s debt. Though the reported senior debt fund has not yet completed fundraising, it has already begun weighing targets, the FT reported.

PEOPLE

Jefferies Names Head of US Chemicals Banking

Parkerson will be part of the firm's industrial investment banking group.

Sagent Hires Two Bulge-Bracket Bankers

Sagent Advisors tapped Abid Rizvi as a managing director and Scott Moses as a principal. They will join Sagent's consumer and retail group in New York. Rizvi was most recently a managing director in the consumer products division at Merrill Lynch. At Sagent, he will focus on food and beverage companies. During his tenure at Merrill, Rizvi also served as a senior member of the corporate finance team. His past mandates include advising on the sale of Otis Spunkmeyer to IAWS. Prior to Merrill, he was part of the corporate finance advisory group at McKinsey & Co. Moses, meanwhile, will lead Sagent's specialty retail and food-and-drug advisory teams. In June, Sagent announced it named Thomas Rosén, who served as head of natural resources M&A at Bank of America for eight years, a managing director in its energy and power group. However, earlier this week, Barclays Capital stated that Rosén is joining its ranks instead.

Former Duff & Phelps VP Joins GCP

Sean Flinnhas, a former vice president at Duff & Phelps, joined Growth Capital Partners, a Houston, Texas-based merchant and investment banking firm. At GCP, Flinnhas will join as a vice president, and he will be based out of the firm’s Houston office, working in the energy group. He is a former, previously having worked in that capacity at Exxon Mobil in the petrochemical and refining business.

Hammond Named MD At GMB

Chris Hammond has been named a managing director of GMB Business Advisors, a mid-market focused subsidiary of Denver, Colorado-based investment bank Green Manning & Bunch. He was involved in the acquisition of the Denver School of Nursing by Education Affiliates, based in Baltimore, Maryland, and the stake sale of MIRATECH Corp to Limestone Miratech Partners, LLC. Prior to joining GMB, Hammond was a vice president at IBG Business Services, based in Greenwood Village, Colorado, from October 2002 to August 2006. Alan Mayer, managing director of GMB, said, "[Hammond] has a keen understanding of the unique processes required to maximize value for lower middle-market business owners." GMB Business Advisors is focused on companies ranging in value between $8 million and $30 million. Green Manning & Bunch’s corporate parent, CoBiz Financial is a $2.4 billion financial holding company.

Former Tyco Exec Jumps To Dechert

William B. Lytton, a former executive vice president and chief legal officer of Tyco International Ltd and former deputy special counselor to Ronald Reagan, joined Dechert LLP as senior counsel. In September 2002, Lytton joined Tyco as part of a sweep of new management that was brought in to resolve issues stemming from allegations of misconduct by Tyco’s former management team and multiple government investigations and civil litigation. He retired from Tyco in July 2007, following the company’s noted turnaround efforts and subsequent spin-off of two subsidiaries of the company. Lytton also acted in the capacity of deputy special counselor to President Ronald Reagan and special counsel to President George H.W. Bush, addressing issues relating to the Iran-Contra matter for both presidents. In his new position, Lytton will work out of the firm’s New York office, addressing corporate governance and corporate investigations issues.

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