LPs approve restructuring J.W. Childs Fund III

A majority of limited partners in J.W. Childs Associates’s third fund have approved a restructuring led by the Canada Pension Plan Investment Board and Goldman Sachs Group Inc that will transfer five remaining portfolio companies into a newly capitalized vehicle, according to three people with knowledge of the deal.

Under the deal, the CPPIB and Goldman have bought the assets out of Fund III, which were valued at about $1 billion.

Those assets will be transferred into a new vehicle that will be managed by the existing J.W. Childs team.

As part of the deal, most LPs chose to cash out of their positions in the fund, one person said. It was not clear if the LPs sold their stakes at a discount.

The five portfolio companies remaining are: specialty retailer Brookstone, bedding company Mattress Firm, WS Packaging Group, Sunny Delight Beverages and Esselte, an office products business.

CPPIB declined to comment; Goldman Sachs and J.W. Childs did not reply to requests for comment.

J.W. Childs’s third fund closed on $1.75 billion in 2002. Performance numbers for Fund III could not be found by press time.

The firm tried to raise a fourth fund around 2006, targeting $3 billion, according to a Buyouts report from 2007, but abandoned the effort, eventually raising a special purpose acquisition vehicle for targeted investments.

In 2012, J.W. Childs sold CHG Healthcare Services, a healthcare staffing business, to Leonard Green & Partners and Ares Management. Last year, the firm promoted Todd Fitzpatrick from vice president of finance to chief financial officer. The firm also added Jeffrey Miller as a vice president.

The Boston-based firm was founded in 1995 by John Childs, a former high-ranking executive at Thomas H. Lee Partners.

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