About Us: investment success
Investment History
Private equity investing is complex and challenging and requires extensive experience to execute well. Pine Creek's Managing Partners bring nearly 25 years of combined private equity experience to the success of backing excellent managers. The team has led investments in over 30 companies totaling over $600 M since 1987.
Deals come in many forms and flavors and Pine Creek's team has successfully led deals of nearly every investment style. These include buying divisions of large companies, family transitions, leveraged build-ups, minority investments in public companies and growth equity. We also have taken many companies public and have extensive Wall Street relationships.
Below, in alphabetical order, are samples of a few of the types of transactions with which the team has experience:
3Gi -
Growth Equity
3GI was a leading smart card solutions company delivering payment products to the financial services industry. The company was a spin-off from a government contractor providing authentication systems to the Federal government. The contracting business was sold just prior to the FSP investment and the CEO, a former E&Y entrepreneur of the year, continued to manage 3GI. 3GI sought to take advantage of the huge growth of the authentication and security market. 3GI received an unsolicited offer from RSA Security (NYSE: RSA) and was sold.
Appro Systems -
Growth Equity
APPRO Systems, Inc., is a leading provider of automated credit risk management systems tailored to consumer and small business lending environments. APPRO currently serves over 150 financial institutions, including vehicle finance, direct finance, credit card, home improvement and home equity lenders. The proceeds from the FSP investment were applied to expansion of the sales force and acquisition of a complimentary product line. Appro, under the direction of its CEO, Steve Uffman, was a market leader prior to the FSP investment and expanded that lead during the period of our investment as evidenced by the fact that the company was sold for cash to Equifax (NYSE:EFX) in 2005. Co-investors: GE Equity, Shawmut Equity Partners, Banc One Equity Investors.
Auction Finance -
Acquisition Financing: Industry Consolidation
FSP invested $5 M in Auction Finance Group (AFG), a dealer finance company, and its simultaneous acquisition of Canadian Auto Auction Group (CAAG), Canada’s largest auto auction, the first of three acquisitions during the period of the FSP investment. The strategy was to buy, at a value price, auto auctions that were for sale due to generational shifting in an attractive geographic market and simultaneously capture the distribution for AFG's dealer floor plan finance products.
The CEO, a serial entrepreneur, analyzed and found attractive the recurring revenue model of the auction industry, successfully implemented his preexisting finance company into the system and properly integrated the acquired auctions. Co-investors: Imperial Capital. Sub-debt providers: Apollo Capital (Ares) and JH Whitney. Sold for cash to Adesa (NYSE:KAR), largest auction in the US.
Education Technologies -
MBO: Small Division Sale by Large U.S. Corporate
MBO of division of Vivendi/Houghton Mifflin. Partnered with management team to buy two businesses for $24 M which Vivendi had originally acquired for $130 M. Acquired for approx 5x cash flow. Worked extensively with seller to execute transaction. Set management team comp structures and sold small division post-closing to pay off all existing debt.
ePlus -
Private Minority Investment in Publicly-Traded Company
Public company PIPE with strong control features. Government Contractor. Worked with company management to complete two acquisitions. Worked with investment banks to expand the Company's research analyst base. Thayer sold stock on the open market over time at substantial profit. Due to board role, CEO of ePlus referred Rickertsen to Software AG.
Financeware -
Growth Equity
Financeware provides a web-enabled financial planning workstation that incorporates client relationship management, asset allocation, and portfolio management functions to the financial advisor marketplace. Its tools provide integration, efficiency and compliance control amongst the various processes that a financial advisor uses each day.
The company is led by the former Director of Strategic Planning for Wachovia Securities. Financeware also has a growing asset management platform, Wealthcare Management, and a joint venture with Thomson Financial which integrates its products and sales effort with that of Thomson's in certain market segments. The company is experiencing superior growth. Co-investors: T.D. Capital, Mellon Ventures, Northwestern Investment Management, Thomson Ventures.
Finetre -
Growth Equity
Finetre (formerly Annuity Net) is an enabler of annuity sales and servicing. The company serves life insurance company issuers and broker-dealer distributors of annuities. Finetre has experienced solid growth, has witnessed the demise of its competitors and acquired from Wachovia its most important rival. Led by a twice successful insurance industry entrepreneur, Finetre is a growing, vibrant small business. Distributor clients include, WAMU, Wachovia, Fidelity and 2/3 of the life insurance writers in the US. Co-investors: Conning Capital Partners, GE, Keyport Life, Banc One, Liberty Financial Group.
Future Financial UK -
Growth Equity
Future Mortgage originates and services residential mortgage loans in the UK, which it selectively sells in the secondary market. Management utilized expertise developed in the US market to export same to the UK. Funds from FBR Special Situations, LP, and a side by side fund formed to facilitate the second round, were used to provide equity for the launch and expansion. After assuming responsibility for the position, McCabe served as Board Observer and assisted in creating secondary market for loans and locating warehouse debt. Purchased by CitiFinancial for cash.
IESI -
Extensive Leverage Build-Up
Large leveraged build-up in environmental services. Backed strong management team out of Waste Management, Inc. Team, working with Thayer, has completed over 100 acquisitions. Cash flow has grown from $5 M to over $100 M. One of the fastest growing companies in environmental services. Thayer was controlling investor. Worked extensively with management on acquisitions and bank financing. Company has since merged with a large public Canadian company, valuing Thayer's stock at twice the original investment.
Jorgenson Forge -
Asset Rich Division Sale
Hancock led the MBO of a large scale, heavy metal steel forge, a division of Jorgenson Steel and Aluminum. Hancock backed the former CFO of Jorgenson in the buyout. It was a value-driven transaction, acquiring over $40 M of hard assets for $14 M. We paid down debt through asset sales to realize a large profit and worked closely with the seller and management on the transaction. Generated a 14 to 1 gain on investment.
National Water & Power -
Growth Equity
National Water and Power (NWP) provides utility billing services in 43 states to owners of multi-family residential properties. NWP installs and operates an advanced network of utility meters that measure water, electricity and gas usage. The market for its products is massive and presents an attractive recurring revenue model. Co-investors: DQE Enterprises, Kline Hawkes, Endeavor Capital.
Outsourcing Solutions -
Management Buy-Out
OSI is one of the two leading providers of strategic receivables management services to banks, insurance companies, telecom providers and utilities in the U.S. Its primary offerings address trends in its targeted industries toward back office outsourcing of billing, collection and portfolio acquisition services across the entire credit cycle. Co-investors: Madison Dearborn, Gryphon Partners, First Union, Deutsche Bank.
RevCare -
Management Buy-Out
RevCare provides a full suite of accounts receivable management (“ARM”) services to health care providers. These services include billing, delinquent debt recovery, litigation and bankruptcy claim management, and workers' compensation lien claim resolution. Given government involvement, complicated payer relationships and fragmented provider networks, the market for the company's products is substantive. FSP funds were utilized to combine several companies to create a full product set capable of being cross sold through a platform of shared services.
Ritz Carlton -
Corporate Partnership Investment
Acquisition of the Ritz-Carlton hotel management company and brand in partnership with Marriott Corporation. Led due diligence and valuation team working in Atlanta to close the deal. Aided in negotiations with Marriott and the investor group's ability to sell their stock to Marriott at a 90% IRR in one year. Also worked closely with co investors Richard Rainwater and Ray Chambers.
SAGA Systems -
Traditional MBO: Division Sale by European Owner
$85 M MBO of US unit of German enterprise software firm. Worked closely with management to complete two acquisitions and developed cost reduction plans which grew pretax profit from $10 M to $35 M. As Chairman, Rickertsen oversaw the IPO process and recruited Robertson Stephens and DLJ to lead the IPO. IPO, seven months after initial closing, valued equity at ten times original investment. Returned initial equity at time of IPO. Led large secondary and later sold company for cash back to the German company who was the original seller. This deal was the basis for the book, "Buyout". Rickertsen was Chairman from 1997 to 2000. Gillis was CEO and then Chairman of SAGA.
Sysdome -
Growth Equity
Sysdome provides automated fraud detection services for the mortgage and consumer finance industry. Fraud in the consumer finance area due to identity theft and misstated information is a massive and growing issue for providers of credit. Company experienced growth but required restructuring in 2002 due to lack of access to a required round of capital. A new CEO, a division manager at Homestore (NASDAQ:HOMS), was subsequently brought in who executed to plan exceptionally well.
McCabe provided sales introductions, assisted with product management and advised on cost reduction strategies. Sold in 2005 to Insurance Services Organization, which bought Sysdome and its primary competitor, for cash.
TRM -
Private Minority Investment in Publicly-Traded Company
FSP invested $5 M in a total round of $20 M in a private, senior equity security issued by TRM Corporation, a publicly traded company, (NASDAQ: TRMM) that operates one of the largest international networks of self-service copy machines and ATM’s in both the U.S. and U.K. Use of ATM's and other self service financial kiosks has increased and retailers, typically the larger brands, outsource this function. Proceeds were used to roll out an ATM network over existing copy machine platform and cross train service technicians.
TRM recently purchased the ATM network from E Trade Financial and is one of the largest ATM deployers in the US as its copy business becomes a decreasing percentage of revenues. A national service network and decreasing costs due to scale are creating barriers that favor TRM. It also provides outsourcing to banks for the management of branded ATM networks.
|
