News

January 31, 2008

Norwest Mezzanine Partners Reviews 2007 Investment Activity

Dear Friends,

The first half of 2007 proved to be an extension of the frothy LBO market we all witnessed in 2006, and then the summer credit crunch became a reality. Despite the daunting changes in the market, elevated purchase price and leverage multiples, as well as increased competition among mezzanine providers, Norwest Mezzanine Partners (NMP) didn't shy away from investment opportunities. On the contrary, we leveraged the state of the economy and remained patient and disciplined with our investments. We are committed to "riding the tide" as we suspect 2008 to bring us much of the same.

Our commitment and approach to deal sourcing and transaction execution reflects the same strategy. As a leading mezzanine provider, we strive to create value by supporting the investment activities of top private equity sponsors. We provide unparalleled service and forge long-term partnerships, as well as embrace new partnerships, no matter the state of the market.

Following is a summary of our successful year of investment activity from 2007: 

New Platform Investments - $86.3 million

Transtar Industries, Inc. (April), leading worldwide distributor of OE quality transmission parts to the motor vehicle repair industry. Linsalata Capital provided sponsorship for the transaction. NMP partnered with leading subordinated debt lenders and established a new sponsor relationship.

Portable Facilities Holdings (September), holding company of Spanky's Portable Services and PORTA-JON of the Piedmont, leading providers of portable sanitation equipment rental, debris removal and other construction site services in Greater San Diego, CA, and Greater Charlotte, NC, respectively. Prometheus Partners provided sponsorship for the transaction. NMP demonstrated structuring flexibility to meet the sponsor's needs.

IIMAK (International Imaging Materials, Inc.) (October), leading manufacturer of thermal transfer ribbons. Centre Partners provided sponsorship for the transaction. NMP utilized its industry experience and strengthened a long-term relationship.

Avtron Manufacturing, Inc. (November), a multi-business company that designs and manufactures technical products via three operating divisions:  Aerospace, Load Banks and Industrial Automation. Morgenthaler Partners provided sponsorship for the transaction. NMP demonstrated its appetite for smaller transactions.

Spinrite (November), manufacturer and marketer of craft yarn products to the North American retail market. Sentinel Partners provided sponsorship for the transaction. NMP leveraged its previous knowledge of the company and provided a unique transaction structure.

Additional Investments - $5.3 million

In October, NMP reinvested an additional $5.3 million in portfolio company Longwood Industries, Inc., a producer of a wide range of industrial rubber products that are sold into a diverse collection of end-user markets. NMP initially invested in Longwood in 2004, and this recent additional investment illustrates NMP's continuing support of Longwood (sponsor: Norwest Equity Partners).

Liquidity Events

In addition to putting new capital to work, we also realized investments from three successful liquidity events:

Crosman Corporation, initially invested February 2004 (sponsor: The Compass Group)

DynoJet Research, initially invested February 2004 (sponsor: Graham Partners)

Jacobson Companies, initially invested April 2004 (sponsor: Norwest Equity Partners)

As always, to those of you with whom we have worked in the past, we appreciate your confidence and look forward to supporting your activities in the future. To others, we hope to create new relationships and demonstrate the expertise and service that have established NMP as one of the leading mezzanine providers.

Many thanks to all of you who contributed to our success in 2007, and best wishes for great success in 2008!

The NMP Team