PEI Staff

We’ve don’t normally post anonymous columns, but we’re making an exception today because we think the column below will generate some interesting debate. It was written in response to Luisa Beltran’s poll last week about how difficult it is for small companies to go public. Give it a read and weigh in with your thoughts. –Ed. […]

No matter how you slice it, Arbor Investments’ deal to buy and transform Great Kitchens, a "take and bake" pizza maker, is a deserving winner of the Buyouts Small Market Deal of the Year award for 2011. By the time Great Kitchens was sold in an auction to Aryzta, a Swiss food company, for $180 million in 2010, Arbor had transformed both the company and the concept of private-label "take and bake" pizza, where consumers take home a fresh, ready-to-bake pizza for much less than the cost of a delivered pizza. The company also makes appetizers and sandwiches. Arbor, a Chicago-based private equity firm specializing in the food and beverage industry, bought Great Kitchens in 2004 for $17.2 million. Upon the sale, Arbor reported a 69 percent IRR and a 17x cash-on-cash return over its original $7.1 million investment. Over six years EBITDA grew by a factor of eight to $27 million from $3.4 million. At present, Arbor has $294 million of capital under management in two private equity funds. Its investors include Goldman Sachs, Babson Capital Management and the Kentucky Retirement System.

Irving Place Capital, formerly Bear Stearns Merchant Banking, has taken home Buyouts magazine’s “Deal of the Year” honors in the mid-market buyouts category. Particularly impressing the editors judging the category was how rapidly Vitamin Shoppe grew under Irving Place’s ownership, and how its October 2009 IPO on the New York Stock Exchange was the first retail IPO in nearly two years. The deal also scored highest in our online voting open to peHUB visitors earlier this month. Irving Place acquired vitamin and nutritional products retailer Vitamin Shoppe in 2002 for $305 million, investing a $121 million plug of equity. Under the ownership of Irving Place Capital, the company secured a new management team, upgraded its board of directors, and diversified its product lines. It expanded from a primarily East Coast chain with 128 stores to a nationwide chain with 484 stores.

Despite everyone’s prediction to the contrary, the financing pendulum has definitely swung back in favor of the borrower. Go back a mere 24 months when lenders called private equity groups and said “Sorry, I know I gave you a term sheet but the world has changed and our pricing has gone up – if you want […]

Monroe Capital LLC is bullish on credit, introducing an array of new lending options for buyout shops. The Chicago specialty finance company, which announced Monday it raised $250 million for a new limited partner-backed fund, announced Friday it will raise $150 million from public investors by forming a business development company, Monroe Capital Corp. The […]

As Frank Sinatra crooned: “I want to be a part of it. New York, New York. I want to wake up in that city. That doesn’t sleep. And find I’m king of the hill. Top of the heap.” Sinatra could have sung his number in chorus with SIlicon Valley VCs. As Mark Boslet reported in […]

President Obama’s efforts to change rules on carried interest are misguided, said Steve Klinsky, founder and chief executive of New Mountain Capital, in a wide-ranging video interview with Reuters Insider and sister magazine Buyouts. The entire 4-minute video can be viewed here. Carried interest, said Klinsky, is “something very different from salary, something very different from bonus. You take a business, you spend years building value, and if you do in fact sell it at capital gain, you get charged at capital gains rates. That’s what carried interest means.” He said “hopefully people will look at it more fairly and level-headedly.” Reflecting on the financial crisis, he said private equity got caught up in the rage directed at Wall Street, even though private equity itself had little to do with the crisis itself. “We got caught up in that spirit of revenge,” he said.

As the 2011 began, lenders were convinced the need for middle market financings (defined as companies with EBITDA of less than $50.0 million), which started to increase during 2010, would accelerate and they would all be overwhelmed with increased demand for debt capital. But as we talk to numerous financing providers, including senior lenders, finance […]

Investing in a music-related startup sounds cool, doesn’t it? Imagine if you invested in RootMusic, which recently raised a $2.3 million round. You’d get to go to their San Franciso digs and listen to music all day. Just last week, Pandora Media registered to raise $100 million in an IPO. Yesterday, TuneUp added $2 million to […]

Jobs in the venture capital industry are in high demand these days. The lure is undeniable: successful VCs profit wildly from entrepreneurs’ hard work. Two questions I hear frequently are: is VC the right fit for me, and if so, how do I land a job? If my recommendations sound taxing, you may simply lack […]