PNC EQUITY BUYES EYE-CARE BUSINESS

By Christine Idzelis The Deal.com

Posted 04:24 EST, January 2, 2007

ICV Capital Partners LLC and Palladium Equity Partners said Tuesday, Jan. 2, they sold vision-products business Hilsinger Holdings Inc. to PNC Equity Partners in a secondary buyout that sources said was valued at more than $100 million.

The Plainville, Mass.-based target supplies eyewear and eye-care products in the U.S. and U.K., generating about $60 million of revenue last year. Among other things, it sells reading glasses, sports goggles, eyewear frames, replacement parts and lens-cleaning products.

The sale of the company yielded the New York-based sponsors 2.5 times their original money and an internal rate of return of more than 30%, said Tarrus Richardson, co-founder and managing director of ICV.

Neither private equity firm would disclose the deal's financial terms.

ICV and Palladium bought Hilsinger in May 2003, acquiring an 80% stake for an undisclosed price. A year later, the firms recapitalized the company, collecting an undisclosed dividend that went to limited partners.

Publicly traded buyout and mezzanine fund American Capital Strategies Ltd. said in May 2004 that it backed the recap with a $60 million debt package.

The original purchase was supported with $36 million of senior debt arranged by Merrill Lynch Capital.

Richardson said at the time that the sponsors planned to grow the company through acquisition. Indeed, the new debt under the 2004 dividend-paying recap helped Hilsinger finance three buys.

Under ICV and Palladium's ownership, the company's revenue — which was roughly $44 million in 2003 — has grown 36%.

Marcos Rodriguez, founder and a managing director of Palladium, said that beyond Hilsinger's add-on acquisitions, business also was boosted by management's push to open up the mass-market channel, selling its products at major retailers like Wal-Mart Stores Inc. and Sam's Club.

Harris Williams & Co.'s Bill Roman and Tiff Armstrong advised Hilsinger on the deal.

Kirkland & Ellis LLP's Eunu Chun was counsel to the sellers.

The buyer tapped Cohen & Grigsby PC's Jeffery Peters for legal advice.

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