15Jun/14

Integro Insurance acquires California-based employee benefits broker

Integro Ltd. on Thursday announced that it has acquired the Newport Beach, California-based employee benefits broker and consultant Lugo & Associates Insurance Services Inc.

Terms of the sale were not disclosed.

“Lugo & Associates focuses on group health and 401(k) and pension plan clients in the small to medium size markets, a great complement to Integro’s larger company client base,” Integro North America’s San Francisco-based president, Marc Kunney, said in a statement released Thursday. “With his vast experience in this market, Mike (Lugo) will lead the small to mid-size group division serving clients with fewer than 250 employees.”

Lugo & Associates will be rebranded as a unit of Integro, and continue operating from its offices in Newport Beach.

Source: Business Insurance

15May/14

Integro Announces New Management Team

May 6, 2014 – Integro Ltd., a leading risk management and insurance broking company, announced today that John Clements has been appointed Chairman of the Board of Directors and Rocco J. Nittoli has been appointed Vice Chairman of the Board. The Company also announced the formation of an Executive Committee, consisting of Marc Kunney (President, North America Operations), John Sutton (President, International Operations), William Goldstein (President and Chief Operating Officer), Toby Humphreys (Chairman of Integro Insurance Brokers Limited) and William P. Costantini (Managing Principal & General Counsel), to assume management responsibilities, including those of Peter Garvey, who has left the Company. The Company wishes Mr. Garvey well in his future endeavors.

“We are pleased to have elevated a team of proven Integro executives to lead the Company’s continued organic and acquisitive growth,” said Mr. Clements. “We are confident that this team possesses the experience, enthusiasm and vision to propel Integro to the next level, providing quality insurance broking and risk-management services to our expanding roster of top-notch commercial and private clients across a wide range of industries and businesses.”

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Founded in 2005, Integro is headquartered in New York City and has offices in Atlanta, Bermuda, Boston, Chicago, London, Montreal, Nashville, San Francisco, Toronto and Vancouver.

 

Source: Integro

01May/14

Finalists announced for Arizona Deal of the Year

The Association for Corporate Growth-Arizona Chapter has announced the finalists for its prestigious “Deal of the Year” Award, which will be presented at the organization’s Southwest Mergers & Acquisitions Conference on May 14-15.

The three finalists are:

— The merger of E.B. Lane and Terralever into LaneTerralever, which was nominated by JDB Capital Partners, LLC.

— Recapitalization of QK, Inc. by Cave Creek Capital, Stewart Capital and Seacoast Capital, nominated by Greene Holcomb Fisher.

— Sale of Pinto Valley Copper mining and milling operations and related railroad company, nominated by Polsinelli.

The Southwest Mergers & Acquisitions Conference will conclude with the presentation of the ACG-Arizona 2014 Deal of the Year Award, a coveted honor given annually to a company or private equity firm in recognition of their accomplishments in Arizona’s mergers and acquisitions or capital markets marketplace. The award will recognize a deal/transaction in the Arizona marketplace involving established businesses with between $10 and $750 million of revenue that closed in the 2013 calendar year.

Additionally, the conference program will include exceptional speakers and content for the business community, including:

— Breakfast Keynote with Jim Huntinger of BOK Financial

— Breakfast Keynote with Anthony LeBlanc of the Phoenix Coyotes

— CEO Panel Discussion in Morning Breakout Session

— Lunch Keynote with Douglas Holtz-Eakin, economic policy expert

— Afternoon breakout sessions featuring Private Equity and Credit Market updates

“We are pleased to be able to recognize these three exceptional transactions which have had a positive effect on Arizona’s economy,” said Sanat Patel, President of the ACG-Arizona Chapter Board of Directors. “These are perfect examples of how middle-market transactions are helping create economic growth and job development in our state and the country as a whole.”

Endeavour Capital’s purchase of Arizona Nutritional Supplements was recognized as the 2013 Deal of the Year last year.

The conference will be held at the Fairmont Scottsdale Princess Resort, where a room block for attendees is available. Registration is $310
for ACG members who sign up in advance and $410 for non-members. At-the-door registration is $365 for members and $465 for non-members.

The conference will kick off on May 14 at 1 p.m. with a Golf Event at the Tournament Players Club of Scottsdale. The golf event is open to all registrants for the conference and is $195.

Conference sessions will take place on May 15, and will begin with an 8 a.m. breakfast featuring Huntzinger and LeBlanc as breakfast keynote speakers. After the morning CEO panel, lunch will be served and the Keynote Luncheon Speaker will be Holtz-Eakin.

A distinguished policy advisor, academic, and strategist, Dr. Doug Holtz-Eakin is skilled at forecasting policy changes on the horizon and recommending sound strategies for mitigating risk to your industry. He has served at the highest levels of government concerned with economics and is well-known on Capitol Hill and in Washington’s top think tanks. Having been involved in policy, politics, campaigns, and elections, he addresses economics from all points of view with his well-rounded expertise.

For more information or to register for the conference, visit www.acg.org/arizona, e-mail the chapter atacgarizona@acg.org, or call 602.448.3981.

Source: azbigmedia.com

Transparent Capitalism


Why Independent Sponsors Can Be A Better Way To Invest in Private Equity

Transparent CapitalismimgIndependent Sponsors are rapidly penetrating the Private Equity market and are now involved in nearly half of all middle market transactions.  These groups invest in each deal individually,rather than through ten year committed funds (affectionately known as “blind pools”).  As this trend accelerates, it is also helping high net worth investors (“Investors” with >$1MM of investable assets) access and fund deals where they can earn better returns with more control over deal selection, less risk of delayed liquidity, fewer fees and more transparency.  These are not high flying, venture capital “club deals” with lottery style risk and return; these are generally established, profitable middle market companies which are managed through trusted relationships, distribute current income and provide investors with timely access to a company’s detailed information.  This “Transparent Capitalism” is yielding enormous advantages for Investors; they can make their own decision about each deal and pick the ones which coincide with their interests and values and which are better timed and sized to their liquidity. Deal quality is self policing as each investment must stand on its own merits and Independent Sponsors are under no required timetable to invest uncommitted funds.

Independent Sponsors are not tied to a single funding source and can select Investors who offer more than just money.  The best ones often focus their fundraising efforts on Investors who can add value through their expertise, background and relationships. Investors can be more than passive bystanders; they can serve as consultants, board members or just interested parties on the lookout for new customers or key hires.  Their questions, insights and involvement can actually aid in the due diligence process and improve investment outcomes over time.  They are the opposite of “dumb money”.  In Transparent Capitalism, Investors become engaged, informed and focused on a smaller number of deals rather than participants in widely diversified, passive investment portfolios managed or selected by third parties.  Transparent Capitalism also enables a virtuous cycle.  Investors can use these networks to share in deal referrals with other like-minded groups to gain access to a larger number of higher quality transactions than they could otherwise find and invest in individually.

TransparentCapitalismSubtitle

Investors in the public markets face a sobering prospect of lower returns as interest rates have plummeted, earnings growth has slowed and stock performance has declined over the last decade.  They would gladly trade some short term liquidity in return for access to Private Equity opportunities yielding double digit annual returns, but most Investors have little ability to indentify or underwrite these investments on their own.  The majority of large Private Equity funds (often sold to individuals through brokers with a high fee structure) require a 10+ year commitment before you even know the identity, valuation, timing and structure of the investments.  Furthermore, the surplus of capital in the large buyout market has depressed the returns of these large funds which, on average have underperformed the returns of the lower middle market funds.  Hence, the growth of Independent Sponsor networks is creating a much needed realignment of investment opportunities by combining an Investor’s capital with his or her expertise and network of relationships.

Investors historically invested the large majority of their assets in the stock and bond markets and only a small percentage of their assets (“fun money”) went to private deals that were perceived as high risk but high reward for those that worked out well.  However, these deals often created adverse selection risk by focusing on earlier stage investments (or, my favorite, speculative real estate).  Generally, the further away from the Sponsor’s personal network or industry they went to seek funding, the more likely the deal’s risk/return characteristics were mismatched or exorbitantly favored the insiders.  Independent Sponsors in established, profitable middle market companies, putting their personal capital to work alongside Investors, mitigate the risk of adverse selection and provide an important investment discipline.

The advent of Transparent Capitalism is turning traditional investing upside down.  Investors can take matters in their own hands and invest a much larger portion of their assets in fewer companies where they can leverage their industry knowledge and relationships.  Capital has become cheap and oversupplied in most capital markets and Investors have come to accept capital preservation as a more modest and realistic goal for their institutionally managed money.  Investors are realizing that their future wealth will be created by their own business or from private investments coming out of their own network.  Independent Sponsors enable Investors to pick their own deals within a trusted network and favor investment structures that mitigate risk.  Investors sacrifice liquidity but gain access and influence with their Sponsor or Management team.  These investments often yield current income, improving liquidity and providing Investors with some financial cushion in a distressed economic environment.

Individual investing in private companies is not a new concept.  The Independent Sponsor model in Private Equity is just another step in the ongoing financial disintermediation of personal investments from the institutional model; improving transparency and efficiency and leveraging the growth in information technology, a form of social networking with financial objectives.  Transparent Capitalism mimics the benefits of the merchant banking model of the 1800’s by ensuring that investors’ interests are closely aligned (ie. Everyone is writing a check and has money at risk).  The model takes advantage of trusted networks that need to maintain each party’s reputational status.  By pooling talent and capital, Investors’ ongoing business relationships and investment results are strengthened, generating transcendent franchise/network value.  Importantly, Transparent Capitalism can function as an evergreen source of investment opportunities and funding for the Investor network, with proper incentives for all parties’ active involvement towards a successful investment result.

13Nov/13

Integro Canada Acquires Winnipeg’s Multimedia Risk Inc.

November 5, 2013 – Integro (Canada) Ltd. today announced its acquisition of Winnipeg-based Multimedia Risk Inc., a leading specialized insurance brokerage serving the national and international film and television production industry from offices in Canada and the United States.

Financial considerations were not disclosed.

Established in 1998, Multimedia Risk has brokered coverage for hundreds of film productions, including “The Expendables,” “The Mechanic,” “Midnight’s Children” and “Getaway” as well as television productions, ranging from “Heartland” and “Cracked” to “Corner Gas,” “Little Mosque on the Prairie,” “Cashing In” and “Todd and the Book of Pure Evil.”

“Multimedia Risk adds to our geographic presence and enhances our expertise in entertainment,” noted Mark Rankin, president of Integro Canada. “With Integro offices in Montreal, Toronto and Vancouver, Multimedia gives us a physical presence in a fourth Canadian city and province, Winnipeg, Manitoba, and its diversified, flourishing economy. We are excited to welcome Claude Forest and his accomplished team, and to leverage their success across the Integro organization.”

Forest, who founded and leads Multimedia Risk, said, “We are proud of what we’ve accomplished over the past 15 years and excited at the prospect of helping Integro assume a leadership role on the international entertainment risk management stage.”

Multimedia Risk is the latest of several international entertainment sector acquisitions by Integro Canada’s parent company – New York-based Integro Insurance Brokers — in recent years:

  • Doodson Broking Group, a UK-based entertainment and sports specialist (October 2013);
  • Allan Chapman & James, leading UK-based media insurance broker (August 2012);
  • Frost Specialty, Nashville, TN-based entertainment specialist (August 2010).

About Multimedia Risk Inc.

Since 1998, Multimedia Risk has provided insurance-related services to the national and international film and television industries — covering the spectrum from micro budget to blockbuster productions. Multimedia Risk understands the complexities of motion picture and television production in all its forms, and tailors comprehensive, cost effective solutions delivered on time from offices in Canada and the United States.

About Integro (Canada) Ltd.

Established in 2005, Integro Canada provides commercial clients, from coast to coast, with solutions to complex risk challenges from its offices in Montreal, Toronto and Vancouver. The firm offers a broad array of brokerage services with specialties in Mining, Manufacturing, Construction, Marine, Real Estate and Recreational. Integro Canada is a division of Integro Insurance Brokers, an international insurance brokerage and risk management firm based in New York.

About Integro

Integro is an insurance brokerage and risk management firm focused primarily on serving organizations with complex risks. Clients credit Integro’s superior technical abilities and creative, collaborative work style for securing superior program results and pricing. The firm’s acknowledged capabilities in brokerage, risk analytics and claims are rewriting industry standards for service and quality. Launched in 2005, Integro and its family of specialty insurance and reinsurance companies, some having served clients for more than 100 years, operate from offices in the United States, Canada, Bermuda and London.

Source: Mediacaster

28Oct/13

Integro Acquires UK-Based Broker Doodson

October 22, 2013 – International insurance brokerage and risk management firm Integro announced it has acquired Doodson Broking Group, a UK-based entertainment and sports specialist that also provides full service commercial and private client broking services.

Doodson was established in 1964 in Manchester. It also has UK offices in London and Halifax, and Austin, Texas in the US. Integro’s bulletin notes that it has “has achieved significant success with clients in the entertainment, live event and sports sectors in the UK and US, and also large corporate entities and high net worth private clients in the UK.”

Integro President and CEO Peter Garvey said: “Joining forces with Doodson enhances our reach and existing strengths in sports and entertainment, as well as our presence in UK retail broking.” With the addition of Doodson as well as the firm’s strong organic growth, Garvey noted, Integro’s annualized revenue surpasses $150 million.

“Strategically Doodson, along with earlier acquisitions Frost Specialty, a significant presence in entertainment coverage in the United States; and Allan, Chapman & James, a leading film and media insurance broker in the United Kingdom, solidifies Integro as a leader in entertainment and live event risk,” Garvey said.”

Integro said the “current Doodson management team, led by Neil Clayton with the support of James Dodds and David Leech in the UK, and Roger Sandau in the US, will remain in place.”

Managing Director Clayton said: “Partnering with Integro is great for Doodson clients and staff. The combined forces of the group will give us a great platform to continue to grow the business in the UK and internationally, especially in our key sectors. Integro has a culture and ethos completely aligned with Doodson’s, further strengthening the strategic fit.”

Source: Integro

31Aug/13

Cave Creek Capital Management Leads Recapitalization of Denny’s and DelTaco Franchisee

PHOENIX, AZ ( 4 September 2013) Cave Creek Capital Management is pleased to announce its investment in QK Holdings LLC, the largest Denny’s franchisee in the United States.  QK operates 84 Denny’s and DelTaco restaurants in Arizona, Colorado, New Mexico, Oregon, Texas and Utah generating over $100 million in annual revenues.

Doug Koch, President of QK Holdings, said, “We are looking forward to growing even faster with the strategic guidance and additional capital from our new partners.  They structured a deal which met our needs perfectly”.  CCCM’s transaction funded both growth capital and personal liquidity for the Founders who maintain a majority interest in the Company.  Robbie Qualls, Doug Koch and Dennis Ekstrom will continue as Chairman, CEO and COO of the Company.  Kevin Fechtmeyer, Managing Partner of CCCM, noted “QK is a classic example of our investment approach; pick strong operators who don’t necessarily need to sell but would like an institutional partner to fund growth,  cash out some of the shareholders and leave the management team with an even larger equity upside in the future.”

Co-investors included Stewart Capital of Stilwell, Kansas and Seacoast Capital, an SBIC based in San Francisco and Boston.  The senior lenders in the transaction included lead agent, GE Capital, National Bank of Arizona and Alliance Bank of Arizona.

Dennys Corp.

Denny’s Corp  (NASDAQ: DENN) is a leading national franchised chain of family restaurants with nearly 1,700 locations worldwide.  Founded in 1953, Denny’s has built a strong brand with its America’s Diner theme and its Grand Slam ™ and $2-$4-$6-$8 Breakfast, lunch and dinner specials.

DelTaco Corp.

DelTaco is a national quick service restaurant (“QSR”) chain offering freshly prepared, value for the money Mexican and American favorites.  The Company, founded in 1964, is based in Lake Forest, CA and has grown rapidly to over 500 locations in 16 states becoming the second largest Mexican QSR concept in the U.S.

Cave Creek Capital Management LLC

Cave Creek Capital, based in Phoenix, AZ, is a growth investor with the flexibility of a family office, the talent of a major firm and a much wider range of capital solutions than traditional private equity funds.  Cave Creek Capital does not require control and can invest in both equity and debt.  With no structural deadlines, we can be patient investors and focus on long term goals.  This enables Cave Creek Capital’s management partners to achieve leadership in their markets and generate exceptional growth and returns.

For more information, please contact:

G. Kevin Fechtmeyer
Managing Partner
Cave Creek Capital Management LLC
2355 E Camelback Rd Suite 510
Phoenix, AZ 85016
480-478-6960
kfechtmeyer@cavecreekcapital.com

13Dec/12

VMC Case Study

Management Buyout Results in Team Owning Majority Stake

Overview
  • VMC purchased from Aeroflex, Inc., was a leader in providing vibration isolation and seismic control solutions to the industrial, military and construction markets
  • Purchased for $8.6 million in 2005 by Management and CCCM
  • Management maintained control of Board and majority ownership with a $1 million investment alongside $3 million mezzanine investment
vmc-home vmc-feature

Results
  • Revitalized management team and workforce produced dramatic improvements
  • Sales and ebitda grew more than 250% within three years
  • Acquired competitor Amber Booth in 2007
  • Management recapitalized the mezzanine debt and equity with Fifth-Third Bancorp in 2009 at an 8x markup in equity value
  • VMC makes strategic acquisitions in 2015; AAC of New York and Dynamic Control Labs in Reno, NV establishing leadership in online sales and testing and certification for compliance with the International Building Code
  • $32 million minority recapitalization completed in May 2015 in conjunction with new partner Seacoast Capital and East West Bank refinancing the Senior Debt

 

13Dec/12

Bastech Case Study

Leveraging Technology to Expand Into New Markets

Overview
  • Company founded in 1961 and profitable every year
  • Proprietary products drove strong customer relationships and recurring revenues
  • Founder limited growth to a lifestyle business resulting in low penetration of a large potential market (100+ U.S. pulp mills and untapped mining market)
  • Attractive EBITDA margins
  • Management buyout completed by Former Dow Chemical executives with The Courtney Group and Cave Creek Capital in August 2007
Results
  • Substantial investment made to expand Company’s facilities, marketing, and administrative systems
  • Hired additional Senior Executives; tripled existing team
  • Expanded R&D programs with several existing products and several under development
  • Expanded mining effort to become leader in US phosphate mining sector
  • Launched international sales effort
  • Sales have grown 300% since closing
  • Customer base has increased 400%
  • Cash Flow (EBITDA) has increased over 100% in four years
  • Recapitalized Senior and Subordinated Debt with SunTrust in February 2012
  • Management team expands in conjunction with debt recapitalization in 2014
  • Lower leveraged company continues to to invest in paper/pulp and mining markets
  • Expansion into international markets with joint ventures with major chemical companies attracted by Bastech’s technology

 

13Dec/12

Kenexa Case Study

Culture of Excellence Drives Billion Dollar Exit

Overview
  • Founded as an executive recruiter, in the late 1980’s
  • Developed the “Hire, Train, Retain” outsourced human resources model
  • Purchased several companies in targeted areas; multiplied the sales post-acquisition by cross-selling to Fortune 500 customer base
  • Rapid growth attracted national attention, including membership in the INC 500 and E&Y Entrepreneur of the Year
  • In 1998, Co-Founder, decided to retire and sell his shares
  • Kenexa’s success in several business lines; online surveys, training and recruiting; required additional investment in product development and marketing
  • A Private Capital partner was chosen (in lieu of an IPO) to assist in the funding of Kenexa’s needs in a multi-level recapitalization
kenexa-home4
Results
  • $27 million of Equity Capital from institutional investors in 1999
  • Repurchased $8 million of stock from the retiring Founder and funded expansion of new product offerings
  • Refinanced a stringent asset-based bank loan
  • Board of Directors expanded, existing management retained control
  • Financing partners added a critical capital “cushion” in 2001 downturn
  • Business model shifted successfully to recurring contracts SAS model software, supporting outsourced hiring and retention programs
  • Completion of IPO on June 29, 2005 at $12/share, rose to $38/share in 2007
  • Sold to IBM for $46/share ($1.3 billion) in August 2012, 12X original purchase price