Clairvest revs up deal-making with Accel, DMS investments

Canadian private equity firm Clairvest Group closed its first platform investments in roughly a year, backing a pair of U.S. companies in the digital-media and gaming industries.

In a release issued to shareholders last month, Clairvest disclosed a US$20.5 million investment in Digital Media Solutions, the Clearwater, Florida, performance marketing company that uses technology to reach, engage and acquire customers for its clients. It is led by Chief Executive Joe Marinucci.

The deal, closed earlier this year, gave Clairvest a minority interest in DMS. Managing Director Mitch Green and Principal Robbie Isenberg took seats on the company’s board.

Clairvest said it backed DMS to capitalize on the structural shift in advertising from traditional to digital media.

DMS has subsequently made two acquisitions, Clairvest told PE Hub Canada. It bought Best Rate Referrals, a mortgage-lead-generation business, and Sparkroom, a marketing and tech solutions provider.

The second platform investment, also closed earlier this year, saw Clairvest acquire a minority stake in Lemont, Illinois, video-gaming specialist Accel Entertainment. The investment totaled US$32.5 million.

Managing Director Michael Wagman and Principal Jon-Ian Lui will serve on Accel’s board, representing Clairvest in its partnership with Andy Rubenstein, the company’s co-founder and CEO.

Accel is the largest operator of video gaming terminals in Illinois. It plans to pursue growth opportunities in the VGT market with Clairvest’s support.

The Accel and DMS investments are Clairvest’s first disclosed since March 2015, when it invested in Winters Bros Waste Systems of Long Island. They illustrate the firm’s long history of investing in sectors that leverage its domain knowledge.

Accel, for example, builds on Clairvest’s extensive track record in gaming.

In the past 15 years, the firm has invested in nine gaming businesses, several of which reside in the existing portfolio. They include Centaur Gaming, Chilean Gaming Holdings, New Meadowlands Racetrack, Rivers Casino and Sonco Gaming.

Another gaming investment, Casino New Brunswick, was exited late last year. The Moncton casino complex was sold to Great Canadian Gaming for $95 million.

DMS is Clairvest’s second investment in the media space. Its first, Cieslok Media, a Canadian outdoor advertising company, was acquired in September 2013.

In a 2013 interview, Clairvest Co-CEO and Managing Director Jeff Parr told PE Hub Canada that domain-driven investing is “central to our brand and competitive edge in the North American market.”

Along with gaming and media, industries in which the firm typically invests include business services, IT services, equipment rental services and waste management.

Accel and DMS are two of three platform investments made to date by Clairvest’s fifth mid-market fund. Clairvest Equity Partners V closed at $600 million in July 2014. It is the largest fund raised since the firm’s inception in 1987.

Toronto-based Clairvest, a publicly listed firm, co-invests alongside its third-party funds. Clairvest contributed US$9.7 million and US$6.2 million, respectively, to the Accel and DMS deals.

Clairvest is also a lead investor in Canadian specialty-finance firm Wellington Financial. Last November, Wellington closed its fifth fund, Wellington Financial Fund V, at $300 million.

Photo courtesy ©iStock/AndreyPopov