Point and counter point, the beat goes on

06.20.2011 - Private Equity

Headlines in the financial press of the last couple of months have reflected the resurgent IPO market for private equity portfolio company exits.  Further evidence of this renewed appetite for risk was a research report released on May 24, 2011 by Preqin, a London based independent research firm focusing exclusively on alternative assets.  Needless to say, the rebound of the IPO market is putting smiles on the faces of general partners and making limited partners very happy.

“Preqin’s exit data shows that there have been 201 PE-backed exits valued at $85bn in Q2 2011 to date. This is 5% higher than the record level reached in Q4 2010 when 325 exits with an aggregate value of $81.3bn were announced. Deals have been particularly prevalent in Europe, with 82 exits valued at $57.9bn taking place so far this quarter, double the $28.6bn seen in the previous quarter.”

Despite these welcome results all is not sunshine in the private equity world.

The latest Global Private Equity Barometer issued on June 20, 2011 surveyed 110 private equity investors (limited partners) from around the world.  Overall the report was positive regarding this asset class but we noted a few findings that bear watching.

The first that caught our eye was that 43% of respondents expect 20% of today’s private equity firms to fail.  The second was even a bit more disconcerting in that 87% of limited partners surveyed expect to refuse reinvestment requests during the coming year.  If the latter is indeed the case it would seem to indicate 20% is on the low side.  Unfortunately, this scenario would most likely effect firms investing in the lower end of the middle market.

London based Coller Capital is a leading global investor in private equity’s secondary market.  The firm provides liquidity to investors wishing to exit early from their private equity investments purchasing original investors’ stakes in private equity funds and portfolios of direct investments in companies.

Well it’s time to sign off and move on to things of a more positive note as we list some of the transactions consummated since our lat post.

Recently Completed Private Equity Transactions

Altamont Capital Partners has completed a significant investment in The Robert Allen Group which is the nation’s leading designer and marketer of decorative fabrics and furnishings to the interior design trade.

Barron Partners has provided Choice Solar with a significant amount of development capital. The company designs and installs solar electric and solar thermal systems throughout Tennessee, primarily for commercial properties.

Fireman Capital Partners has made a $20 million growth investment in Newton Running which is a designer and manufacturer of high-performance running shoes geared toward the recent natural running mechanics revolution.

Francisco Partners portfolio company Emailvision acquired SmartFOCUS. The two companies provide multi-channel marketing and customer intelligence software with a focus on software and services for online relationship marketing.

Genstar Capital has acquired MW Industries. The company manufactures and distributes springs and specialty fasteners.

Harvest Partners acquired Packers Sanitation Services which provides contract cleaning and night sanitation services to the food industry primarily to the meat and poultry industries throughout North America.

H.I.G. Capital portfolio company Vaupell acquired Russell Plastics Technology, a supplier of composite plastic products and assemblies for the aerospace and military markets.

Huron Capital Partners portfolio company Artissimo Designs, Inc. has acquired Lot 26 Studio, Inc., a leading manufacturer, designer and marketer of decorative adhesive wall decor including decals and mirrors.

Irving Place Capital’s portfolio company Multi Packaging Solutions (MPS) has completed the acquisition of CARTONDRUCK, a manufacturer of folding cartons. MPS serves as a platform for acquiring specialty printing and packaging businesses.

OpenGate Capital is acquiring Cascades Boxboard Group – Connecticut LLC, a paper mill facility and Cascades Boxboard US, Inc., a converting facility that supply a wide client base of consumer products companies.

Relativity Capital has acquired Evergreen Maintenance Center, which offers maintenance, repair and overhaul on commercial aircraft, as well as aircraft storage.

Riverside Partners portfolio company Tech Valley Communications acquired a majority stake in segTEL. The companies provide telecommunications services over fiber optic networks.

Roark Capital Group has completed the buyout of Il Fornaio which owns and operates 22 full-service Italian restaurants under the Il Fornaio name as well as 119 company-owned and franchised Corner Bakery Cafes.

The Riverside Company expanded its consumable medical products retailing platform ActivStyle with the acquisition of Home Wellness which supplies a broad range of catheter and incontinence supplies to patients.