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In HindsightRoughly a year ago in this forum I predicted that our economy would be in for a rough stretch. It wasn’t at all a bold prediction or even all that insightful considering the signs -- emerging then on a daily basis -- that pointed to the distress we’re all feeling today. To take everyone back, we were just a few months into the dislocation in the credit market; Bear Stearns had just seen two of its hedge funds collapse; and consumers, those of us who don’t make over six figures, were gasping for air. Despite the obvious nature of my prediction, the gloomy forecast yielded more angry emails than perhaps anything else I’ve ever written. It was surprising because to me it amounted to a report that the sky was blue. I’m not bringing this up to vindicate myself. What is interesting, though (and telling), is that so many people not only refused to acknowledge the possibility of a downturn, but were indignant that anyone would even suggest it. It’s akin to Richard Fuld blaming the shorts for Lehman’s failures. I think in hindsight his time might have been better spent finding a fix. There are plenty of examples of companies that took a more proactive approach. Go back a few months, and CIT Group appeared worse off than any of its bulge-bracket rivals. The firm, though, moved quickly to sell off its exposure to mortgage-related debt and student loans and also raised billions in new capital. Last week, CIT lined up a $500 million secured facility, reflecting, perhaps, its renewed stability, and since July the lender has supported more than $1.4 billion in new commercial loans.Maybe it’s just one example, but to me it underscores the difference when you face a problem head on versus counting on blind faith that everything will be okay… Of course, now that everyone and their overextended mother is getting bailed out, who can really say that the latter approach won’t also work. Ken MacFadyenken.macfadyen@sourcemedia.com 
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DEALSAscent Media Sells SubtitlerSDI Media will take over Visiontext by the end of the month, marking strategic relationship’s commencement. Lime Rock and Thompson Street Team UpLime Rock Partners and Thompson Street Capital Partners have agreed to acquire Industrial Rubber Products, Inc., a designer, producer, and applicator of protective coatings to pipeline and industrial markets, for $16.50 per share, which represents an approximate 49% premium to the average closing price of Industrial Rubber over the preceding twenty trading days. It is anticipated that the management of the company, including its President, Daniel Burkes, will continue in their current officer positions and retain a meaningful portion of their ownership. Providence, Ayala To Acquire BPOProvidence Equity Partners and Ayala Corp., a Makati City, Philippines-based holding company of diversified businesses, have agreed to acquire business process outsourcer eTelecare Global Solutions for $290 million. As part of the deal the acquirers will pay $9 per share for the Philippines-based company, which trades on the Nasdaq under American Depositary Shares. The purchase, which isn’t conditioned on Providence, R.I.-based private equity firm Providence and Ayala securing financing, marks a 76% premium over the target’s close at $5.10 per share on Thursday. A $250.5 million market-capitalized business and nine-year-old company, eTelecare provides customer service and technical support to large US corporations like American Express, AT&T, Dell and Sprint. The company has offices spread between the Philippines, North America and Latin America. Last year, eTelecare generated $259.9 million in revenue on $37.9 million in Ebitda, according to its annual report. Kohlberg Agrees To Acquire CenterplateKohlberg & Company, the Mt. Kisco, New York private equity firm, has agreed to acquire foods company Centerplate, Inc. in an all cash transaction. The Stamford, Connecticut-based food services and catering company is best known for its upscale concession franchises at professional sports arenas and stadiums. The transaction, which is expected to close in the first quarter of 2009, was unanimously approved by the Centerplate board of directors. Under the terms of the agreement, Kohlberg will acquire units of Centerplate for $4.00 per unit, a premium of 33% over the target’s closing price on Thursday. Sun Capital Acquires GordmansSun Capital Partners has acquired Gordmans, a Midwestern apparel and home fashions retailer with 65 stores. The Boca Raton, Fla.-based private equity acquirer did not disclose its purchase price, financing details or other financial metrics involving the Omaha, Neb.-based company. Sun Capital, a private equity shop known for its turnaround expertise, will take control of a value-priced retail chain that began operating 93 years ago. The company's big-box stores in 16 states including Colorado, Indiana, North Dakota and Oklahoma sell value-priced clothes and accessories. Harris Williams & Co. bankers Glenn Gurtcheff, Tim Alexander, Tyler Pace and Craig Lawson arranged the deal on behalf of Gordman’s. It closed on Sept. 17. ICV.. or Déjà Vu?ICV Capital Partners pulled off a unique exploit when it re-acquired Marshall Retail Group following its sale of the specialty retailer three years ago. ICV acquired the then-family owned business in January 2003, then sold the company to Bruckmann, Rosser, Sherrill (BRS) in 2005. On Tuesday, ICV announced the re-acquisition of Marshall from BRS. Willie E. Woods, Jr., a managing director at ICV, cited the difficult retail environment as a key factor that allowed ICV to re-acquire Marshall. Although the acquisition of a target from a larger firm such as BRS to a lower mid-market private equity firm of ICV’s scale usually signals mismanagement or a decline of value, Woods asserts that Marshall continued to expand under BRS’ management. “To the seller’s credit, they have grown the business very nicely,” he said. When Marshall was first acquired by ICV in 2003, the retailer had $42 million in annual sales. Terms of the firm’s re-acquisition of Marshall were not disclosed. ICV expects to continue to expanding Marshall through opening new locations and by taking advantage of the poor performance of the gaming industry. As casinos focus of their core offerings, Woods expects that retail opportunities will be farmed out to outside companies such as Marshall. “Retail is a part of what of what they do, but not a core, so we think that this will be a growth opportunity for us,” he said. Marshall now operates three main types of retail stores, including logo and souvenir stores; apparel and accessories stores; and Harley Davidson licensed apparel stores. Halifax Group Helps Nutrition Physiology RecapHalifax Group LLC has joined with Nutrition Physiology Corp. in a recapitalization. Douglas Ware and Michael Ray will retain a substantial, undisclosed portion in the firm and will continue to work with senior management and serve on the company’s board after the transaction; Halifax provided the equity for the deal. Other transaction terms were not disclosed. Nutrition Physiology Corp., a supplier and marketer of additives for feedlots and dairies, provides its products to more than four million beef cattle and 400,000 dairy cows annually. Axia Capital Sells HydroidAxia Capital Partners LP scored a major victory Tuesday when it sold Hydroid LLC to Kongsberg Maritime AS for about $80 million plus an earnout package tethered to the former asset’s performance through 2009. Hydroid makes autonomous underwater vehicles for military and commercial buyers; it wa established in 2001 and when Axia invested in 2005, already had revenues nearing $8 million. Within two years, by 2007, Hydroid’s sales had grown closer to $20 million with aggressive projections. The Massachusetts-based company continues to project strong growth figures. Kongsberg Maritime is a Norwegian company with products and applications designed for use at sea.
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