Our Deal of the Year winner for 2017 is Anchor Glass Container, a company that to most people may not have looked like much of a winner when KPS Capital Partners acquired it in 2014.
Anchor Glass, which makes glass bottles used by the liquor, beverage and food sectors, filed for bankruptcy three times in the 20 years before KPS’s acquisition. The glass sector started losing market share to plastic packagers in the 1990s, and many glass plants had been shuttered when KPS carved Anchor out of Ardagh Group.
KPS had some experience in the sector after having owned North American Breweries Holdings, a beer company with brands including Genesee. KPS had a view on the glass market that it was stable and that Anchor was a good business.
Through extensive operational improvements, KPS was able to boost EBITDA nearly 59 percent in less than three years.
KPS’s sale earned the vaunted Deal of the Year for several reasons: an initial complex carve-out; operational improvements; a vision of success for a company and a sector largely out of favor; and a strong return.
All our Deal of the Year candidates this year had aspects that could have put them over the top, but our final winners just had a little something more. Carlyle Group helped expand a family-owned medical-implants-forging business Groupe Marle into an international force in the industry.
Providence Equity found a way to monetize going to church through Ministry Brands, which makes software for faith-based organizations. The deal earned Providence an about 1,200 percent internal rate of return.
Levine Leichtman Capital Partners, though its Senior Helpers investment, showed that senior-care franchising is a model that can be replicated outside of the U.S. And American Capital’s former Special Situations group carved out a money-losing corporate orphan called Service Experts and turned it into a profitable enterprise that earned the firm a 184 percent IRR.
All these deals display what is best in private equity: the courage to look where others won’t; the nerve to put risk capital into a money-losing business; the creativity to develop a theme; and the savvy to execute on that theme, model out a limited-hold investment and produce a fat return.
Each of our five categories was well represented this year, and we hope to continue the trend for years to come. If your submission didn’t make the cut in 2017, don’t hesitate to come back large next year. We can’t wait to see what you do!
Full List of Winners
- Deal of the Year, Middle Market/Overall: KPS Capital Partners for Anchor Glass Container Corp
- Deal of the Year, Large Market: Providence Equity for Ministry Brands
- Deal of the Year, International: Carlyle Group for Groupe Marle
- Deal of the Year, Small Market: Levine Leichtman for Senior Helpers
- Deal of the Year, Turnaround: American Capital for Service Experts Heating and Air Conditioning