Private equity deals pace M&A activity

If it weren’t for private equity firms flooding the market, the list of first-quarter mergers and acquisitions would be a short one.

In the year’s first three months, 12 deals were transacted, compared with 21 last year. And of the dozen, half involved private equity firms. For example, decor and gifts cataloger/retailer Gump’s in February was acquired by private equity players Walden VC, Stone Canyon Venture Partners, and Sand Springs Holdings, while Westerly, RI-based multititle mailer Paragon Holdings was acquired by BlueSky Brands, an affiliate of private equity firm Reliant Equity Partners, in March.

“The private equity firms are continuing to drive the marketplace,” explains Craig Battle, managing director of Princeton, NJ-based investment bank Tucker Alexander, which tracks mergers and acquisition activity for Multichannel Merchant. “They are the ones who are doing the hard work of finding the opportunities and assuming the risk but also reaping the rewards.”

What’s more, Battle says, private equity shops view catalog companies as a way to enter the e-commerce arena without having to build an infrastructure from scratch. These firms see catalog marketers as well positioned for future online and retail growth.

Specialty Catalog gains Canadian parents

When: February The facts: South Easton, MA-based Specialty Catalog Corp., whose titles include wig catalogs Paula Young and Especially Yours, was sold to Toronto-based private equity firm EdgeStone Capital Partners. Former CEO Joseph Grabowski left in late April. New York-based investment bank Goldsmith Agio Helms represented Specialty Catalog in the sale. According to its data card, Specialty Catalog’s two core titles target women ages 35-50 with a median household income of $40,000-$50,000. Especially Yours caters to black women, while Paula Young targets a white audience. In addition to its U.S. wigs books, Specialty Catalog markets its products under the Natural Image, Jacqueline, Paula Young, and HotHair brands in the U.K. The skinny: EdgeStone sees Especially Yours, in particular, as a platform for growth, says Goldsmith Agio Helms principal David Solomon. It plans to ramp up prospecting for the book, he says, as its primary competitors in the highly fragmented African-American wig market are mom-and-pop hair salons.

Bachrach family sells its business

When: February The facts: Chicago-based Bachrach Clothing, a 128-year-old cataloger/retailer of men’s apparel, was sold by the Bachrach family to an affiliate of Sun Capital Partners. Financial terms of the transaction were not disclosed. Based in Decatur, IL, Bachrach operates 49 stores in 18 states in addition to mailing a catalog. Sun Capital’s other apparel properties includes Mervyn’s, Anchor Blue, MOST, and Life Uniform. The skinny: In May, retail veteran Sheila Arnold — most recently president for Discovery Channel retail — was named president/CEO of Bachrach, replacing Ed Bachrach, the great-grandson of the founder.

Supplier buys Orion Telescopes & Binoculars

When: January The facts: New York-based Imaginova Corp., which sells products for amateur astronomers, in January acquired Watsonville, CA-based Orion Telescopes & Binoculars. Orion already sold a number of Imaginova items in its Cupertino, CA, store; in January it began featuring Imaginova’s products in its monthly catalog. Imaginova’s other holdings include the and LiveScience Websites, Starry Night astronomy software, and several annual conferences. Orion and Imaginova are discussing consolidating their operations and fulfillment. The skinny: Orion president Tom Anglo says that special sections in the Orion stores devoted to Imaginova products are a possibility; the company is also considering the launch of separate Imaginova stores.

Company Market segment Buyer/investor Investment form Est. price (in millions)
JAN. C.C. Filson Outdoor apparel Brentwood Associates Acq. of assets N/A
Orion Telescopes & Binoculars Hobbies Imaginova Corp. Acq. of assets N/A
FEBRUARY Specialty Catalog Corp. Wigs EdgeStone Capital Partners Acq. of assets N/A
Bachrach Clothing Men’s apparel Sun Capital Partners Majority investment N/A
Gump’s Home decor, gifts Walden VC, Stone Canyon Venture Partners, Sand Springs Holdings Acq. of assets N/A
Salkeld Sports Sporting goods Collegiate Pacific Acq. of assets N/A
MARCH Amerimark Apparel, cosmetics, jewelry JH Partners Majority investment N/A
Cornerstone Brands Apparel, decor, and gifts IAC/Interactive Corp. Acq. of assets $720.0
Cheryl & Co. Baked goods Acq. of assets $40.0
Paragon Gift Holdings Gifts BlueSky Brands Acq. of assets N/A
Eziba Gifts Acq. of assets $0.5
Kanox Industrial supplies Airgas Acq. of assets N/A
Source: Tucker Alexander compiled from public information and other nonconfidential sources

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