New York-based Ares Capital Corp. announced three financing commitments to new portfolio companies in the fourth quarter of 2011, totaling $640 million. The firm served as administrative agent, lead arranger and bookrunner in a senior secured credit facility to support the refinancing of Grocery Outlet Inc. by Berkshire Partners. The firm also acted as administrative agent in a second lien term loan to support the acquisition of Essent Healthcare by Warburg Pincus-backed RegionalCare Hospital Partners Inc. Finally, Ares served as administrative agent, lead arranger and bookrunner in a senior secured credit facility to support the acquisition of WorldStrides by The Carlyle Group.
Ares Capital Corporation (NASDAQ: ARCC) announced today that investment transactions closed in the fourth quarter of 2011 included three financing commitments to new portfolio companies totaling more than $640 million. Ares Capital served as administrative agent in all three transactions.
Ares Capital President Michael Arougheti commented, “We are very pleased to have partnered with three high-quality private equity investors and their franchise businesses. These transactions demonstrate that our flexible capital as well as our ability to lead and commit significant dollars is resonating among sponsors seeking reliable and large-scale capital solutions in the middle market.”
Below is a brief description of these transactions:
Grocery Outlet Inc. / Berkshire Partners LLC
Ares Capital served as administrative agent, lead arranger and bookrunner in a senior secured credit facility to support the refinancing of Grocery Outlet Inc. by Berkshire Partners. Grocery Outlet is an extreme-value grocery retailer with over 170 stores in the United States.
RegionalCare Hospital Partners Inc. / Warburg Pincus
Ares Capital served as administrative agent in a second lien term loan to support the acquisition of Essent Healthcare, Inc. by RegionalCare Hospital Partners, Inc., an existing portfolio company of Warburg Pincus. Pro forma for the acquisition, RegionalCare owns and operates seven market-leading, non-urban hospitals across six states. The hospitals are located in Florence, Alabama; Muscle Shoals, Alabama; Ottumwa, Iowa; Wilmington, Ohio; Paris, Texas; Sharon, Connecticut and Waynesburg, Pennsylvania.
WorldStrides / The Carlyle Group
Ares Capital served as administrative agent, lead arranger and bookrunner in a senior secured credit facility to support the acquisition of WorldStrides by The Carlyle Group. WorldStrides is the nation’s largest student travel organization.
About Grocery Outlet Inc.
Based in Berkeley, California, Grocery Outlet offers extreme bargains on brand name merchandise, with prices often up to 50% less than conventional retailers. The largest “extreme- value” grocery retailer in the United States, Grocery Outlet has over 170 locations in Arizona, California, Idaho, Nevada, Oregon, Washington and Pennsylvania. Grocery Outlet carries thousands of products across several categories including dry groceries, frozen, dairy, deli, produce, health & beauty, general merchandise, beer & wine and meat. Most stores are independently operated by locally-based families. A third-generation family run company, Grocery Outlet has been a tradition for bargain-seeking customers since 1946. For more information, visit www.groceryoutlet.com.
About Berkshire Partners LLC
Berkshire Partners, the Boston-based private equity firm, has invested in over 100 leading middle market companies for over twenty-five years through eight investment funds with aggregate capital of $11 billion. Berkshire has developed specific industry experience in several areas including consumer products and retail, business services, industrial manufacturing, transportation and communications. Representative investments include Party City Holdings, Bare Escentuals, Carter’s, Crown Castle International, NEW Asurion and TransDigm. The firm seeks to invest $50 million to $500 million of equity capital in each portfolio company. For more information, visit www.berkshirepartners.com.
About RegionalCare Hospital Partners Inc.
RegionalCare Hospital Partners, Inc., headquartered in Brentwood, Tennessee, invests in and operates hospitals in non-urban markets. RegionalCare was founded in 2009 with an investment from Warburg Pincus. With a commitment to high quality care and compassionate service, RegionalCare’s mission is to partner with hospitals that serve a broad, regional population and help them meet the healthcare needs of their communities. Pro forma for the acquisition of Essent Healthcare, Inc., RegionalCare will own and operate seven non-urban, market-leading hospitals across six states. The hospitals are located in Florence, Alabama; Muscle Shoals, Alabama; Ottumwa, Iowa; Wilmington, Ohio; Paris, Texas; Sharon, Connecticut and Waynesburg, Pennsylvania. For more information, visit www.regionalcare.net.
About Warburg Pincus LLC
Warburg Pincus is a leading global private equity firm. The firm has more than $30 billion in assets under management. Its active portfolio of more than 125 companies is highly diversified by stage, sector, and geography. Warburg Pincus is a growth investor and an experienced partner to management teams seeking to build durable companies with sustainable value. Founded in 1966, Warburg Pincus has raised 13 private equity funds which have invested more than $40 billion in over 650 companies in more than 30 countries. The firm is headquartered in New York with offices in Amsterdam, Beijing, Frankfurt, Hong Kong, London, Luxembourg, Mauritius, Mumbai, San Francisco, Sao Paulo and Shanghai. For more information, visit www.warburgpincus.com.
Located in Charlottesville, Virginia, WorldStrides is the nation’s largest provider of supplemental educational student travel programs. The Company is the only provider to be accredited by all six of the regional accrediting bodies recognized by the Department of Education. WorldStrides leads group travel programs to more than 80 countries and serves approximately 200,000 students annually. Founded in 1967, WorldStrides has provided educational trips and accredited educational content to more than 4,000,000 students from elementary through graduate school. The company has earned multi-year customer relationships with teachers and school administrators by providing superior educational content, disciplined travel operations and exceptional levels of student safety. For more information, visit www.worldstrides.com.
About The Carlyle Group
The Carlyle Group is a global alternative asset manager with $148 billion of assets under management in 89 active funds and 52 fund of fund vehicles as of September 30, 2011. Carlyle invests across four segments – Corporate Private Equity, Real Assets, Global Market Strategies and Fund of Funds Solutions – in Africa, Asia, Australia, Europe, the Middle East, North America and South America. Carlyle has developed expertise in various industries, including: aerospace, defense & government services, consumer & retail, energy, financial services, healthcare, industrial, technology & business services, telecommunications & media and transportation. The Carlyle Group employs more than 1,200 people in 33 offices across six continents. For more information, visit www.carlyle.com.
About Ares Capital Corporation
Headquartered in New York and with offices in Atlanta, Chicago, Los Angeles and Washington, D.C., Ares Capital is a leading specialty finance company that provides one-stop financing solutions to U.S. middle market companies and private equity sponsors. Ares Capital invests primarily in first and second lien loans and mezzanine debt, which in some cases includes an equity component. To a lesser extent, Ares Capital also makes equity investments. Ares Capital, which has elected to be regulated as a business development company under the Investment Company Act of 1940, is externally managed by Ares Capital Management LLC, a wholly owned subsidiary of Ares Management LLC. Ares Management LLC is a global alternative asset manager and a Securities and Exchange Commission registered investment adviser with approximately $46 billion of committed capital under management as of December 31, 2011.