Seller Need: The seller, a NYSE listed company, decided to divest its interest in a small non-core division. There was limited stand-alone financial information, no in-house accounting, HR or other administration capabilities and the facility needed to be relocated. Management of the division sought an investment partner who would support their efforts to extricate them from their prior relationship with their parent and become an independent company.

Transaction: In August 2000 Argenta Partners acquired Cerilliant from URS Corporation, a large engineering and services company.

Role: We assisted in establishing all of the administrative and accounting functions and acquired and then leased to the company a substantially larger and highly-equipped facility designed specifically to meet the needs of the business. We assisted in bringing to Cerilliant a new Chief Executive Officer, a new Controller, a revised strategic focus, a more effective marketing program and other improvements to the operation.

Outcome: Argenta Partners completed the sale of Cerilliant Corporation to Sigma-Aldrich Corporation (Nasdaq: SIAL) on December 30, 2010. Sigma-Aldrich was motivated by the opportunity to strengthen the Company’s analytical chemistry product portfolio and to continue to deliver on its strategic growth targets in the analytical chemistry sector. The successful exit generated a gain of 27 times the initial equity investment and produced an IRR of 38%.

As viewed by the CEO:

“Argenta Partners was extremely valuable in getting Cerilliant established as a stand-alone business. Their early involvement allowed us to get a lot accomplished without adding significant additional resources. They provided assistance in everything from setting up employee benefit programs to selecting accounting software to providing ongoing financial and tax preparation support. This included bringing the banking relationship as part of the acquisition. Argenta was also particularly helpful in writing and negotiating legal contracts — something the management team could not have done without spending significant resources on lawyers and consultants.

Throughout our long relationship, Argenta Partners has continually supported the growth of the business through reinvestment of earnings, and has acted as a sounding board on the critical decisions of the business. Their extensive and continued support to the business has contributed to much of the success we enjoy today.”

Sherri Pogue, CEO
Cerilliant Corporation

Seller Need: The founder sought liquidity for estate planning purposes and desired to participate in the growth of the future value of the business and to continue in his current role as President. He sought an investment partner who could provide strategic guidance to help execute a sustainable long term growth plan and who could also bring accounting and information systems expertise.

Transaction: In July 2008 in partnership with another private equity firm, Argenta Partners recapitalized this $100 million revenue industrial construction business. We provided liquidity for the seller while also providing him with a significant minority ownership position in the business. The seller continues to serve as the President of the business. We structured the transaction to provide, for the first time, ownership positions for other key existing and future members of management.

Role: Since the recapitalization in 2008, we have assisted in the recruitment of a new Chief Financial Officer and new Controller, and have also invested in the improvement of accounting and management information systems. We have also assisted in the recruitment and hiring of a VP of Business Development. We anticipate further additions to the organization to better position the business for future growth. Prior to the transaction, the business had grown rapidly during the preceding 5 years. Our joint objectives with the management will be to continue this rapid growth through investment in people, systems and competitive strategic initiatives.

As viewed by the CEO:

“In 2006 I began doing some personal estate planning and in that process realized that the current structure was not ideal for the continuity of the company. I began exploring different options with both strategic buyers and equity investors and determined that my best option was to pursue an equity buyer that would allow me to have complete involvement in the company and continue my role as President. Through the process, I met Argenta Partners and liked them immediately. They were down-to-earth, interested in my vision for the company and importantly, our goals were in alignment. Westcon’s success has always been based on customer relationships and quality performance. I wanted partners who aligned with me on retaining this focus and implementing a growth strategy that would not compromise the business. I found that with Harry and John.

They have been great partners and allowed me to run the business without micromanaging, and yet they have been there when I needed them. Argenta Partners has been particularly helpful in bringing expertise to our financial and accounting areas and actually helped us source a Chief Financial Officer even before the deal was signed. I have been pleased with our relationship and with how well they have aligned with our business goals and my personal goals.”

Mark C. Peterson
President, Westcon, Inc.

Seller Need: The seller, the widow of the founder, wanted to achieve liquidity while retaining some participation in the future revenue of the business. Of critical importance to the seller were the continued legacy of the technology and the fair treatment of all of the company’s tenured and loyal employees.

Transaction: In February of 1995 Argenta Partners acquired Enersyst. The founder had developed, patented and licensed to others technology for high-speed cooking. The benefits included a substantially reduced time required for cooking a variety of food products. In the case of pizza, the technology revolutionized the industry from the use of traditional “deck ovens” to high speed “impingement ovens” and resulted in pizza transitioning to a made-to-order food product, both for delivery and in restaurants. We developed a structure for the investment resulting in a combination of cash consideration at closing plus participation in future royalties in excess of certain minimums.

Role: We brought a new Chief Executive Officer and a new Controller to the business and participated in changing the strategy to a more aggressive technology development and marketing program. The significantly enhanced marketing efforts resulted in several substantial new licenses in the commercial and residential markets. We provided equity ownership for the leading members of management and provided significant compensation incentives for other key personnel. The company developed, patented and licensed additional technologies including an oven for residential use.

Outcome: The business was sold to a strategic buyer in December of 1999 resulting in substantial gains for the investors, the management team and for the Seller.

As viewed by the Former CEO:

“My transition from a multi-national corporate executive to a private equity Chief Executive Officer was made possible and richly profitable due to partnering with Argenta Partners.

With Argenta, there was deep respect for the knowledge that came from within the business and their ability to contribute collaboratively when invited, or when their experience and counsel impacted the valuation of the business. I didn’t feel a redundancy, but rather recognized them as partners. They have a deep bench of senior partners whose experience can be tapped where the G&A or consulting resource would be prohibitive but where a brain trust is critical.

Argenta Partners is perfectly suited for small to mid-cap companies. They insist on executive team ownership and work creatively to make that possible. In their world, operating entities and investors need aligned incentives: in the end that means building business valuation, managing cash flow, and protecting the balance sheet. They truly mean pay for performance. Their involvement leads to healthy companies.

Partnerships require trust – Trust built from prompt yet considered decisions, risk sharing, capital headroom, and frankly, judgment that comes from seasoned experience. I would invest, and have, with the Argenta Partners team again and would also lead one of their businesses again.”

Sarah Palisi Chapin
Former CEO Enersyst Development Center, LLC

Sellers Need: The founders of two independent, unaffiliated businesses each desired to retire and achieve liquidity for all of their interests in their businesses.

Transaction: In May 2002 Argenta Partners acquired 2 unaffiliated manufacturing businesses which together dominated the U.S. production and supply of certain steel anchorage products used in post-tension and pre-stressed concrete construction. We acquired both businesses on the same closing date and methodically and successfully merged the management and operations.

Role: We facilitated the hiring of key members of the leadership team including a new Chief Executive Officer, a new Chief Financial Officer and a new Vice President of Manufacturing. We assisted with implementation of new accounting procedures and management information systems. Manufacturing operations were reorganized with improved efficiency and improvement in raw materials and inventory control.

Outcome: The business achieved significant organic growth with attractive profit margins. In April 2006 the business was sold to a NYSE buyer resulting in a substantial gain for the investors and for the new management.

As viewed by the former CEO and President:

“John and Harry had a vision to see what the combination of these 2 businesses could add up to in the marketplace. They saw the potential and were willing to hire the right people to run the business. I was fortunate to lead this new business and we had an excellent relationship throughout the partnership.

Argenta Partners ensured that the business was fundamentally strong and well-capitalized. Their management style is to engage but not micromanage. They worked along side the management team, asked the right questions, and always came to the right decision. Throughout the relationship, Argenta Partners provided us with invaluable assistance and access to great connections and resources.

One of Argenta’s great strengths is their ability to be patient – this distinguishes them from other private equity firms. They don’t have a fund pressing them to flip the business and as a result, they take a long term view of the business. They are also patient enough to time the exits properly – in our case, it was done thoughtfully and with perfect timing.

Argenta Partners treated all investors and the PSL management team very fairly and with respect. It was a great partnership and friendship and I think anyone would welcome the opportunity to work with them again.”

Bob Van Noord
Former CEO and President, Precision Sure-Lock, Inc.

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Avita Drugs is a specialized pharmacy that dispenses and delivers prescription medications for patients with certain chronic diseases.

Seller Need: The founders sought liquidity and participation in the future increase in value of the business. One of the two founders desired to transition out of the business while the other wanted to retain his role as chief executive.

Transaction: In May 2007 Argenta Partners recapitalized this specialty pharmacy, providing liquidity for the two founders in a structure that allowed for both to maintain minority ownership positions, and for one founder to retain his role as chief executive.

Role: Since the transaction, we have provided guidance and assistance in acquiring management talent, including a new Chief Operating Officer and Controller, facilitated improved accounting and information systems and enhanced the overall strategy to strengthen their market position. Additionally, we are assisting Avita in new market development and new locations, including the relocation of the headquarters and primary pharmacy to Baton Rouge. Founded in 2003, Avita is a relatively young company which has experienced significant growth over the last few years.

Outcome: Since 2007 revenues have almost tripled, providing for a revenue rate of $50 million at the end of 2009.

As viewed by the Founder:

“When Avita began the process of identifying potential partners to help with the expansion and growth of the company, we met with many public and private equity firms. We immediately liked the experience, personality, and interest that John and Harry expressed during those initial meetings. Over the next several months it became apparent that other firms were only interested in balance sheets and what Avita could bring to their organization. Harry and John appeared to be much more interested in what value they could provide to Avita, its patients, providers, and clients.

Since partnering with Argenta Partners, they have provided invaluable expertise, resources and experience to Avita. We meet quarterly to discuss business opportunities and growth strategies, yet they always allow us the autonomy to run the business. Their door is always open; they always make time for discussions, and genuinely want to provide value without changing the very thing that has made Avita successful – namely, the quality of care we provide to the patient, provider, caregiver and client.

It was critical for us to partner with an organization that believed in the core values of our success, while helping us expand our care through added disease state therapies and geographic growth. Our vision for the future would not be possible without the strength, experience and value that Argenta has brought to Avita.”

Jerry Purcell
Founder, Avita Drugs, LLC