A Busy Day For The Middle Market
Host of deals get done in a variety of industries.
February 11, 2008
The private equity market has been less than robust of late given the state of the leveraged finance market, but a spate of middle-market private equity deals nonetheless were announced on Monday.
Sun Capital Partners said it has agreed to acquire publicly traded Kellwood for $21 per share, or $542.4 million excluding debt. The Boca Raton, Fla.–based private equity firm plans to acquire St. Louis-based Kellwood with financing from Citigroup and Credit Suisse Securities, while Kirkland & Ellis is providing counsel to Sun Capital.
Kellwood’s shares increased to $20.94 per share, or 2% above their previous close of $20.53 a share on Friday.
The Riverside Company, meanwhile, announced its intention to acquire New York proxy advisory firm D. F. King and London public relations consultancy M:Communications for $180 million, while Focus Financial Partners, a portfolio company of Boston’s Summit Partners, has agreed to acquire UK wealth manager Greystone Financial Services and New York’s Falconhead Capital said it will acquire Boulder, Colo.-based publisher Inside Communications.
Additional transaction details weren’t released Riverside purchased DF King, which also owns New York public relations advisory firm Broadgate Consultants, and M:Communications through an entity named Sage Holdings, which will be headed by president and chief executive Oliver Niedermaier, formerly chief executive of proxy solicitation firm Georgeson.
“We'll have greater access to the funding required for ongoing growth initiatives, enhancing prospects for continued success in the U.S., Europe and Asia,” said Peter Harkins, president and CEO of D. F. King, in a statement.
D.F. King, incidentally, is advising Kellwood shareholders on Sun Capital’s agreement to buy the business.
Broadgate provides public relations counsel to several private equity firms including New York firms Clayton Dubilier & Rice and Fenway Partners.
Dechert attorneys Berthold Hummel, Michael Hirschfeld, Stephen Skonieczny, Michiel Muizelaar, Rob Ballenger, Don Meier and Katja Heuterkes are serving as counsel to Niedermaier and his family office for the transaction.
Harkins also said the growth strategy for the 66-year-old company, which manages assignments for its more than 800 clients in over 30 countries, will be to expand its proxy solicitation, shareholder and investor service offerings in Europe.
Separately, Focus Financial did not disclose the details of its purchase that will give it ownership of a London-based wealth management business that manages more than $1.6 billion in assets on behalf of more than 5,000 clients.
Rudy Adolf, chief executive of Focus Financial Partners, said the acquisition will put “one of the most successful entrepreneurial wealth management firms” in the New York firm’s network of financial advisory firms.
The purchase, which will help Focus to capitalize on growing demand for wealth management and financial advisory services in the UK, is expected to close on April 1, 2008..
Summit Partners provided $35 million in funding to back Adolf, a former American Express executive, and the formation of Focus Financial in 2006. Since then, Focus has executed a series of acquisitions of other wealth managers like HoyleCohen and Resnick Investment Advisors that has boosted its network of wealth management firms to 15, its assets under management to more than $26 billion, comprised of more than 600 employees.
Paul Heap, managing director of Greystone Financial Services, said that Focus will provide Greystone with the resources to expand its recruitment as well as acquisition programs.
The transaction is one of the latest in the wealth management advisory space, which has drawn strong interest from private equity firms over the last two years.
In November, Chicago private equity firm GTCR Golder Rauner committed $100 million as part of a $200 million capital raise for PrivateBancorp, a Chicago wealth advisory services company. Other deals in the sector include Birmingham, Mich.-based money manager Munder Capital Management’s acquisition by Crestview Partners of New York , the recapitalization of Nashville-based WealthTrust by Circle Peak Capital, also a New York private equity firm and New York-based MB Investment Partners' purchase of Boston’s Ironwood Capital Management.
As part of Falconhead Capital’s acquisition of Inside Communications, the target company’s publications and business operations will be folded into Falconhead Capital portfolio company Competitor Group.
“The addition of Inside Communications will give Competitor Group a major presence in the competitive cycling space,” said David Moross, chairman and CEO of Falconhead Capital.
Falconhead invests in middle-market consumer-focused companies in the sport, leisure, lifestyle, and media industries.
Inside Communications publishes magazines VeloNews and Inside Triathlon along with the Tour de France Guide.
Falconhead’s purchase is expected to be completed in the next 45 days.
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