Black Canyon Takes JDC Healthcare Stake
Companies in need of debt solutions are increasingly turning toward PE shops, which are in turn looking for more efficient ways to deploy capital at a time when debt is scarce.
July 1, 2009
Black Canyon Capital, the Los Angeles-based private equity firm, worked to complete a recapitalization of JDC Healthcare along with the company’s management and owners.
Black Canyon bought the company’s debt and will capitalize the business to work toward future growth opportunities; JDC is a dental practice management company in Texas.
Increasingly, companies in need of debt relief have turned to private equity firms. PE shops’ response to companies looking to alleviate debt pressure has served as an opportunity for several firms that are facing debt constraints of their own. Most recently, Allis-Chalmers Energy Inc. took in a total of $86 million from Lime Rock Partners V, a private equity fund, to support the oil and gas exploration equipment company’s business at a time when it stock has been reduced to less than 25% of what it was even a year prior.
In June, listed, Florida-based Office Depot raised $350 million from BC Partners, giving the European PE firm a 20% stake. In January, Warburg Pincus spent $175 million for a stake in Nuance Communications at about $10 per share; at press time, these shares appreciated about 25% since the date of the PE shop’s play. Also, last November, Whole Foods sold $425 million worth of preferred stock -- convertible into a 17% stake -- to an affiliate of retail investment firm Leonard Green & Partners.
This is not the first time the California private equity firm has supported companies facing debt issues. Other Black Canyon Capital plays include control stakes in Logan’s Steakhouse and Virgin America; mezzanine debt and minority equity plays in Triton Media and Archway Marketing Services and debt provided to Ready Pac and J. Crew.
Calls were not returned by press time.
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