Falfurrias looks to sell Dorsey Wright for more than 12x EBITDA: sources

After nearly three years, Falfurrias Capital Partners is looking to sell Dorsey Wright & Associates and is seeking bids of more than $200 million, according to five sources. Wells Fargo is advising on the sale, which is expected to attract lower middle-market private equity firms as well as strategic buyers, the sources said. Richmond, Va.-based Dorsey, a registered investment advisor, produces EBITDA of $15 million to $17 million, two sources said, which would mean Falfurrias is seeking 12x to 13x EBITDA. However, a third source said Dorsey’s EBITDA was more likely around $12 million to $14 million, which translates to a sales price of nearly 17x EBITDA. Based on the sale price, Dorsey Wright will likely be bought by a strategic buyer, buyout execs said. Falfurrias Capital Partners acquired a majority stake in Dorsey Wright in November 2011, according to a statement from that time. Falfurrias, based in Charlotte, N.C., was founded in 2006 by Hugh McColl Jr., a former chairman and CEO of Bank of America, and Marc Oken, an ex-BofA CFO. It is a lower middle-market PE firm and invests in sectors such as financial services, consumer products and healthcare. Falfurrias announced in 2007 that it had closed on $97 million for its debut fund. Performance data for Fund I is unavailable. The PE firm began marketing for its second pool, Falfurrias Capital Partners II LP, in November 2011, according to an SEC filing. Fund II had a $200 million target and had reached $105.7 million in commitments as of May 2013, a regulatory filing said. Dorsey Wright & Associates was co-founded by Tom Dorsey in 1987. He is widely followed on Wall Street and has authored books such as “Point & Figure Charting: The Essential Application for Forecasting and Tracking Market Prices,” “Thriving as a Broker in the 21st Century,” and “Tom Dorsey’s Trading Tips: A Playbook for Stock Market Success.” The firm offers investment research and analysis for broker/dealers and institutions. Dorsey Wright, which reportedly oversees $5.1 billion in assets, employs about 20 people, one source said. While small in size, Dorsey Wright is a “big momentum shop” with a large cult following in the advisor space, the source said. The company has branched into discretionary asset management and has ETFs based on their strategies. For example, Invesco Powershares and First Trust each have ETFs that track Dorsey Wright indexes. The ETF sector has seen activity of late. Goldman Sachs is in talks to buy IndexIQ which is backed by FTV Capital, Reuters reported. Meanwhile, Janus Capital Group said last week it was buying VS Holdings, the parent of VelocityShares, an ETF provider. FTV is also an investor in VelocityShares. Executives for Falfurrias did not return calls and emails seeking comment. Executives for Dorsey Wright and Wells Fargo declined to comment. Photo of Tom Dorsey courtesy of www.prweb.com

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Falfurrias looks to sell Dorsey Wright for more than 12x EBITDA: sources

Fortress buys Omnisure

Fortress Investment Group has acquired a controlling stake in Omnisure Group that was previously held by Lincoln Park Capital.  No financial terms were disclosed. Omnisure is a provider of payment plans for retail vehicle service contracts. PRESS RELEASE NEW YORK–(BUSINESS WIRE)–Omnisure Group, LLC, a leading provider of payment plans for retail vehicle service contracts (“VSCs”), announced its sale to affiliates of Fortress Investment Group LLC (NYSE:FIG). Under terms of the sale, Fortress will take a controlling interest in Omnisure, previously held by Lincoln Park Capital, LLC, a Chicago based institutional investor, and affiliates, with the recapitalized company expected to pursue opportunities for growth and business expansion. Ed and Paul Walder, Omnisure’s founding executives, will retain a significant ownership stake in the company and will continue to operate the business going forward. About Omnisure Ed and Paul Walder started their careers in premium finance and have over 42 years of combined experience in the service contract payment plans industry. Omnisure began operations in 2010 to capitalize on the unmet demand for providing payment plans to the VSC industry. Prior to starting Omnisure, the Walders owned and operated one of the country’s first service contract finance companies and are considered to be industry pioneers. About Fortress Fortress Investment Group LLC is a leading, highly diversified global investment firm with approximately $63.8 billion in assets under management as of June 30, 2014. Founded in 1998, Fortress manages assets on behalf of approximately 1,600 institutional clients and private investors worldwide across a range of private equity, credit, liquid hedge funds and traditional asset management strategies. Fortress is publicly traded on the New York Stock Exchange (NYSE:FIG). For more information, please visit www.fortress.com.

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Fortress buys Omnisure

Abraaj aims to seal purchase soon of Saudi fast-food chain Kudu-Reuters

(Reuters) – Private equity firm Abraaj Group hopes to conclude a deal soon to buy a majority stake in Saudi fast-food chain Kudu alongside TPG Capital, a senior Abraaj executive told Reuters. The Middle East’s largest private equity firm has been in exclusive talks for months to buy a controlling holding in the restaurant group, currently owned by four shareholders including chairman Abdulmohsen bin Abdulaziz al-Yahya. “It’s about dotting the Is and crossing the Ts – it’s not far,” Ahmed Badreldin, partner and head of Middle East and North Africa (MENA) at Abraaj Group said in an interview. Should the deal go ahead, it would be TPG’s first investment in the Middle East, highlighting how interest from international private equity firms in doing deals in the region has been picking up. Kudu is worth around 2 billion riyals ($533 million) based on a valuation of around 20 times 2013 earnings, sources have previously told Reuters. Abraaj is also hoping to close two purchases in North Africa potentially by the end of the year, including one for Egyptian snack maker Bisco Misr, Badreldin said. It made the approach to buy at least 51 percent in Bisco Misr in July through its Abraaj Investment Management affiliate. “There is a good deal flow in North Africa. There are plenty of mid-market sized deals – we started (in Egypt) a year ago and locked in at good valuations.” A mid-market deal in North Africa would consist of between $20 million and $40 million, he said. Badreldin said the level of competition for deals in Egypt had increased from almost nothing a year ago, pushing up price tags for businesses in the country, which has been rocked by economic and political turmoil since the ousting of president Hosni Mubarak in 2011. “For hospitals, we would probably have had to bid up higher this year by two or three times,” Badreldin said to highlight the increasing confidence in the Egyptian market. Abraaj is also aiming to list a Tunisian firm in the next four-to-five weeks as well as sell an Egyptian asset. He declined to identify the companies involved. The private equity firm also has a second business it was hoping to take public in the early part of 2015, he said, without elaborating. But much will depend on global equity markets, which have experienced significant volatility this month due to uncertainty over global economic growth, a resurgent European debt crisis and the potential impact of the Ebola virus. “If risk aversion comes back strongly, then you’re not going to have an initial public offering, it’s that simple. Then your buyers will be strategic buyers or you wait until another market window opens,” Badreldin said.

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Abraaj aims to seal purchase soon of Saudi fast-food chain Kudu-Reuters

EQT frontrunner for Siemens hearing-aids business, say sources-Reuters

FRANKFURT/LONDON, Oct 21 (Reuters) – German engineering group Siemens is in advanced talks to sell its hearing-aids business for more than 2 billion euros ($2.5 billion), with private equity firm EQT the frontrunner, two people familiar with the matter said. EQT was one of three parties to submit binding bids for Siemens Audiology Solutions by last Friday, along with fellow private equity firm Permira and Danish hearing-aids maker GN Store Nord, another source close to the matter said. Siemens, EQT, Permira and GN declined to comment. Bloomberg had reported earlier that EQT was the frontrunner to buy the business. Siemens this year announced plans to list its audiology unit, but declining equity markets have made such a move less attractive and sources told Reuters in August that the group was renewing efforts to divest the business. Another two sources close to the matter said that Siemens had not given up on the idea of a possible initial public offering (IPO), despite rocky equity markets that have caused several IPOs to be pulled or delayed. A spin-off to existing shareholders is also an option. Siemens’ Chief Executive Joe Kaeser is seeking to focus the group on its most promising businesses to close the gap on more profitable competitors such as Switzerland’s ABB and United States-based General Electric. The German trains-to-turbines group has sold or spun off a string of assets in the past decade but failed to find a buyer for Siemens Audiology Solutions four years ago. Sources familiar with the business, whose accounts Siemens does not publish separately, have said it has annual sales of about 700 million euros and core earnings of 160-170 million.

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EQT frontrunner for Siemens hearing-aids business, say sources-Reuters

VC-backed Connecture files for IPO

Connecture has filed for an IPO. The number of shares that will be sold as well as the stock’s price range have yet to be set. Morgan Stanley and JPMorgan Securities will serve as lead underwriters. Connecture provides web-based information systems for health insurance marketplaces. The firm’s backers include Great Point Partners, Chrysalis Ventures, SSM Partners and LiveOak Equity Partners. PRESS RELEASE BROOKFIELD, Wis. – October 20, 2014 – Connecture, Inc. (Connecture), a provider of web-based information systems used to create health insurance marketplaces, announced today that it has filed a registration statement on Form S-1 with the U.S. Securities and Exchange Commission for a proposed initial public offering of its common stock. Connecture previously submitted a registration statement to the SEC on a confidential basis under the Jumpstart Our Business Startups Act of 2012. The offering will consist of shares to be sold by Connecture and may also consist of shares sold by certain stockholders of Connecture to the extent that the underwriters of the offering exercise their over-allotment option. Connecture will not receive any proceeds from the sale of shares by stockholders. The number of shares to be offered and the price range for the proposed offering have not yet been determined. Morgan Stanley & Co. LLC and J.P. Morgan Securities LLC will act as joint book-running managers for the proposed offering. Wells Fargo Securities, LLC, Raymond James & Associates Inc. and William Blair & Company, L.L.C. will act as co-managers. The offering will be made only by means of a prospectus. When available, copies of the preliminary prospectus related to the offering may be obtained from Morgan Stanley & Co. LLC, Attention: Prospectus Department, 180 Varick Street, 2nd Floor, New York, NY 10014, telephone: 1-866-718-1649, or email: prospectus@morganstanley.com; or J.P. Morgan Securities LLC, c/o: Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, New York 11717, or by telephone at (866) 803-9204. A registration statement relating to these securities has been filed with the Securities and Exchange Commission but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

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VC-backed Connecture files for IPO

StoneCalibre completes NetPlus acquisition

StoneCalibre has closed its buy of NetPlus. No financial terms were disclosed. Based in Gaithersburg, Maryland, NetPlus is a telecom infrastructure management solutions provider. PRESS RELEASE LOS ANGELES, CA–(Marketwired – Oct 21, 2014) – StoneCalibre is pleased to announce that it has completed the acquisition of NetPlus. Headquartered in Gaithersburg, Maryland, NetPlus is a leading provider of a diverse set of communications software solutions. Through its web based software framework, NetPlus enables commercial and government customers to efficiently manage their telecom systems by providing network operations, telecom expense management (TEM) and VoIP transition solutions across legacy and Unified Communications platforms. For over 30 years, NetPlus has provided innovative solutions for communications management through superior product functionality, domain-expertise, and best-in-class customer service. “NetPlus represents an excellent platform for growth in the expanding communications management software industry supported by its proven product offering and its blue-chip customer base,” said Brian Wall, Founder and Chief Executive Officer of StoneCalibre. “We are excited to add NetPlus to the StoneCalibre portfolio and we will seek acquisition opportunities to augment its organic growth.” Matt Lewis, President of NetPlus, expressed his enthusiasm for partnering with StoneCalibre. “We are excited to have StoneCalibre backing us in growing our unique telecom infrastructure management (TIM) solution that combines both telecom management and TEM.” Mr. Lewis stated, “I’m confident that StoneCalibre’s long-term investment approach and distinctive set of skills combined with NetPlus’ value proposition and seasoned employee base will elevate NetPlus to the next level.” The terms of the transaction were not disclosed. About StoneCalibre Headquartered in Century City, CA, StoneCalibre is a privately funded investment firm specializing in the acquisition of lower middle market companies. Founded by Brian Wall in 2012, StoneCalibre is focused on making investments in both special situations and quality long-term capital investment opportunities. For more information please visit our website at www.stonecalibre.com. About NetPlus NetPlus is a leading Telecom Infrastructure Management solutions provider for both commercial and government entities headquartered in Gaithersburg, MD. With over 30 years of experience, NetPlus solutions are used worldwide to improve efficiency, streamline processes, and consolidate telecom and IT management. NetPlus solutions provide customers the ability to manage cross platform telecom infrastructure including UC, VoIP and legacy technologies, while controlling costs through telecom expense management (TEM) functions. For more information, visit www.NetPlusTMS.com.

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StoneCalibre completes NetPlus acquisition