D.C. Shop Expands B-To-B Holdings

Target: Virgo Holdings

Price: $100 million

Sponsor: Arlington Capital Partners

Seller: Seaport Capital

Financial Adviser: Seller: DeSilva & Phillips

Legal Adviser: Sponsor: Hogan & Hartson LLP; Seller: Morgan, Lewis & Bockius

Arlington Capital Partners has beefed up its trade publishing portfolio with its recent acquisition of Virgo Holdings, a Phoenix-based publisher and trade show organizer, from Seaport Capital. The Washington, D.C.-based buyout shop acquired the company for about $100 million, funding about 40 percent of the deal with equity.

Arlington Capital plans to double the size of its equity investment in Virgo over time with add-on acquisitions, said Jennifer Bolton, the CEO of Virgo Holdings, which publishes niche titles such as Church Solutions and Infection Control Today. Arlington Capital staff are currently reviewing a list of about 10 possible acquisition targets, Bates said.

Virgo Holdings is the seventh investment from Arlington Capital’s $585 million Arlington Capital Partners II LP, closed in 2006. Other business-to-business, or trade publishing, investments acquired with the fund include Daily Racing Form LLC, acquired in August 2007 from the Wicks Group of Companies LLC, and Sports Enthusiast Media LLC, acquired in October, also from the Wicks Group.

Goldman Sachs & Co., General Electric Capital Corp. and Bank of Ireland agreed to provide debt financing for the Virgo Holdings deal.

Arlington Capital also invests in companies in aerospace and defense, federal and commercial information technology, education and training, health care services and manufacturing.

The deal came from Roland DeSilva, managing partner of DeSilva & Phillips, the firm that advised Seaport Capital, said John Bates, principal at Arlington Capital. The New York-based advisory boutique, which specializes in media deals, also advised Zuma LLC, a publisher in the cosmetology school industry, when an Arlington Capital company, PlattForm Advertising Inc., acquired it in July 2007. At the time, Bates told DeSilva of his firm’s interest in acquiring more companies in the sector. As a result, Arlington Capital was one of the firms DeSilva & Phillips contacted when it took on the Virgo Holdings assignment. DeSilva said his firm knew Arlington Capital’s profile and that Virgo Holdings could potentially make a good strategic fit.—B.V.