CIVC Joins Big Leagues, Exits Two Investments –

Continental Illinois Venture Corp. has been reincarnated as CIVC Partners and has a fresh $500 million commitment from affiliate Bank of America to make private equity investments.

The new fund came into effect in January, according to Gregory Wilson, a managing director at Chicago-based CIVC. The firm’s prior arrangement with Bank of America was to receive annual allocations of as much as $100 million from the bank. From 1990 to 1999, CIVC invested $475 million in 32 deals and realized an internal rate of return of 49%, according a statement released by CIVC.

The fund will target North American companies with between $30 million and $300 million in revenue, mostly in the media, financial and business services and niche manufacturing sectors. CIVC will invest between $10 million and $75 million per deal.

The firm will make control and non-control investments, as well as provide mezzanine financing in transactions. Mr. Wilson said the majority of transactions likely will be control, and CIVC will provide mezzanine debt only for the firm’s own transactions. The ability to provide mezzanine financing in a deal will be an advantage when negotiating with sellers, he said.

Other than an undisclosed amount of capital committed by partners at CIVC, Bank of America, the country’s largest bank, is the sole limited partner in the fund. However, in spite of the relationship, the bank does not normally provide senior debt in CIVC’s deals, Mr. Wilson said.

CIVC began as a venture capital firm in 1970, and later switched to buyouts in 1989. In 1994, its original parent company, Continental Bank Corp., was acquired by Bank of America.

Sells to Buyers Across the Pond

CIVC recently sold two portfolio companies to European buyers. Last month it sold Custom Industries, a St. Louis-based specialty food concern, to Dutch food conglomerate Cooperatie Cosun for an undisclosed amount. Mr. Wilson said his firm made a return just shy of 30% on the deal. CIVC had acquired Custom Industries in 1993.

In January, an investment group including CIVC sold The Petersen Cos. to U.K. magazine publishing giant EMAP plc. CIVC originally co-invested in the company with a number of other investors, including James Dunning, Petersen’s chairman, president and chief executive officer, in 1996. The total equity investment came to $165.3 million. In 1997, the investment group took the company public at $17.50 a share. EMAP bought it in January for $34 a share, or $1.2 billion, bringing CIVC’s return on investment to well over 100%, Mr. Wilson said. Petersen publishes men’s specialty magazines such as Motor Trend and Hot Rod.