Week Starts Well For Mid-Market PE
Saunders and James Brown deals show middle-market PE firms haven't slowed down on fund deployment.
May 12, 2008
While new deals by large leveraged buyout firms are few and far between, middle-market private equity investors are busy arranging new deals.
On Monday, Heritage Partners and Black Canyon Capital announced their recapitalization of Phoenix measurement and test equipment maker Saunders & Associates, while Navigation Capital Partners and VVS Capital disclosed their acquisition of James Brown Contracting and its subsidiaries, Brown Trucking Co. and JBT Brokerage.
While financial transaction terms in the weren’t disclosed by Heritage, a Boston private equity firm that invests in closely held family or founder-owned businesses, Gladstone Capital provided senior financing for the recap of Saunders. The transaction allows some founding Saunders shareholders to realize liquidity on their holdings in the Arizona company, while also allowing some shareholders to retain ownership in the business. In addition, the investment by Heritage and Los Angeles private equity firm Black Canyon, which manages a $500 million investment fund, will provide Saunders with additional capital to fund its business objectives.
Peter Hermann, a general partner of Heritage, said the company’s management’s experience in the test and measurement industry and Heritage’s track record of investing alongside successful entrepreneurs will leave Saunders “poised for great success.”
Saunders makes components for frequency control devices that are universal in most electronic products and systems like cell phones, personal digitial assistants, GPS devices, automobiles, telecommunications and other applications.
The company’s revenue and cash flow metrics weren’t disclosed.
“Heritage’s expertise in investing in privately held businesses and Black Canyon’s experience in the test and measurement industry made them compelling partners,” said Dwane Rose, chief executive and president of Saunders, in a statement.
RSM EquiCo advised Saunders, whereas Snell & Wilmer acted as counsel to the company.
Choate, Hall & Stewart was counsel to Heritage, while Skadden, Arps, Slate, Meagher & Flom were counsel to Black Canyon and Cooley Godward Kronish counseled Gladstone Capital.
Separately, Atlanta-based Navigation Capital and VVS Capital formed an entity named James Brown Holdings to carry out their purchase of Lithonia, Ga.-based freight hauler James Brown. Although financial details weren’t released, Wells Fargo Bank and John Hancock Life Insurance Co. affiliates provided financing to support Navigation Capital and VVS Capital's purchase of the 32-year-old business.
James Brown oversees 500 trucks and more than 3,000 trailers, which serve the paper and packaging industry, primarily in the Southeastern US. The privately held business did not release its Ebitda or revenue figures.
As part of the deal, trucking executive Brian Kinsey was named CEO of James Brown, while founder James W. Brown will remain at the company in an unspecified executive role.
“Brown exemplifies Navigation’s strategy to create productive partnerships where our resources can accelerate and support solid growth,” said David Panton, partner at Navigation Capital, which manages $375 million of invested and committed capital.
Hunton & Williams attorneys Joseph Alexander Jr., Daniel Rollman and Kevin Hull provided counsel to Navigation Capital, whereas Powell Goldstein attorney Stuart Johnson supplied counsel to VVS, a firm established in 2007 by managing partners Pete Vaky and John Van Slooten.
Miller & Martin attorneys David Flanigan Jr. and Timothy Silvis were legal advisors to James Brown, while Transportation Capital Partners’ Miller Welborn provided financial advice.
Sullivan & Worcester attorneys Nicole Rives and Megan Smiley provided counsel to John Hancock, and Burr & Forman attorneys Edgar Snow Jr. and Lindsey Arnold were the legal advisors to Wells Fargo.
Find out more information about people mentioned in this article from our People Database:
For more information on related topics, visit the following:
