Tailwind Capital So Far In 2012 Generates $324M From 3 Exits

Exits have been the story this year for Tailwind Capital, which has unloaded three portfolio companies year to date.

This month Investcorp announced it acquired Archway Marketing Services for about $300 million. Rogers, Minn.-based Archway provides marketing logistics and fulfillment services. Tailwind, along with Black Canyon Capital and members of the management, acquired Archway in 2008 for an undisclosed amount.

The New York private equity firm invested $44 million equity in the Archway deal, according to a July letter to investors obtained by sister Web site peHUB. The sale will generate $122 million in total proceeds for Tailwind, representing a 2.8x multiple of invested capital and an IRR of 37 percent, the letter said.

Another exit occurred last month. SBA Communications, in June, said it would buy 3,252 tower sites in the United States and Puerto Rico from TowerCo, a Tailwind portfolio company. The deal, valued at $1.45 billion, is expected to close in the fourth quarter.

The firm acquired 3,300 towers from Sprint Nextel in 2008 in a transaction valued at $670 million. Tailwind invested $77 million of equity in TowerCo., according to the letter.

Tailwind is expected to receive total proceeds of $167 million from the TowerCo sale, representing a 2.2x multiple of capital and a 23 percent IRR, the letter said.

And, earlier this year, Tailwind exited Freedom Innovations. Health Evolution Partners acquired a majority stake in Freedom in February. Irvine, Calif.-based Freedom develops high-tech prosthetic devices. The Freedom sale apparently generated $35 million in proceeds.

Tailwind, which spun off from Thomas Weisel Partners in 2006, targets middle market companies in healthcare and business & communication services. All three investments came from Tailwind’s inaugural fund, which raised $775 million in 2008. It’s unclear how much of Fund I is invested.

The three exits will generate $324 million in total proceeds, or 51 percent of the fund’s paid-in capital, the letter said. Tailwind also made $92 million from the October 2011 sale of SDI Health to IMS Health, the letter said. Including the $92 million, sale proceeds from the exits total $416 million for Fund I or 65 percent of paid-in capital, the letter said.

Officials for Tailwind couldn’t be reached for comment.