Three years after acquiring Hilsinger Holdings, a leading provider of optical and ophthalmic products, ICV Capital Partners (No. 4 on the BE PRIVATE EQUITY FIRMS list with $400 million in capital under management) and Palladium Equity Partners sold Hilsinger to PNC Equity Partners for more than $100 million, attaining an annualized rate of return greater than 30%. ICV is a private investment firm that focuses on growing middle-market companies through acquisition.
“It is the fourth company that we’ve sold, and it is a huge transaction,” says Tarrus Richardson, managing director and co-founder of ICV, who sponsored and brokered the deal.
The investment capital came from ICV’s first fund, now closed, which holds $130 million. ICV aligned with Palladium, the country’s largest Hispanic private investment firm, and the two companies obtained a controlling interest in Plainville, Massachusetts-based Hilsinger. ICV and Palladium invested $30 million in Hilsinger for control of approximately 80% of the company, and management retained a 20% stake.
In 2004, with funding from American Capital Strategies, ICV purchased MSI Inc., Leader Sports, and Quality Accessoriesâ€“three smaller acquisitions that helped increase Hilsinger’s 2006 net sales to $60 million, a 36% increase since 2003.
In September, ICV formed Entertainment Cruises Inc. to purchase Spirit Cruises, Odyssey Cruises, Mystic Blue, and Sea Dog in a deal valued at more than $100 million. It is now the leading dinner cruise company in the country with $85 million in sales. ICV invested approximately $50 million of equity from ICV II, a $313 million second fund raised in 2006. The transaction was financed with a $61 million senior debt facility from Chicago-based Madison Capital Funding L.L.C.