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SEC Risk Alerts Provide a Great “Heads Up”
About our Contributors ICS Group is a regulatory compliance consulting firm specializing in providing compliance support to the financial services and insurance industries. We help our clients comply with regulatory requirements and industry standards. Our clients include: registered investment advisers, private equity funds, hedge funds, mutual funds, broker-dealers, insurance companies and state pension plans. Our team of highly experienced compliance professionals know from first-hand experience what regulators are looking for, the industry standards that apply, and how to develop and implement cost-effective business-oriented solutions. In addition to the annual publication of its exam priorities, the SEC’s OCIE issues periodic Risk Alerts which are aimed at promoting compliance by sharing the most frequently-cited deficiencies arising from its exam program. To bring attention to issues that the SEC has concerns about and to foster increased compliance, the SEC issues Risk Alerts. Two Risk Alerts have been issued so far in 2018: 1.
Palladium Equity Partners to Invest in Partnership with Owners of Spices Provider
New York and Orlando, FL, July 10, 2018 – Palladium Equity Partners, LLC (along with its affiliates, “Palladium”), a private investment firm with over $2.5 billion in assets under management, today announced that one of its affiliated private equity funds has made an investment in partnership with the owners of Spice World, Inc. (“Spice World” or the “Company”), a leading supplier of garlic and other spices under the Spice World brand. Terms were not disclosed. Founded in 1949 and led by multiple generations of Caneza family members, Spice World offers a broad portfolio of garlic and other spice products in a variety of formats, including fresh, peeled, and minced garlic and other spices sold under the Spice World brand. The Company today distributes its products in the U.S. through a broad customer base, including grocery chains, club stores, and distributors. Palladium will partner with the Spice World management team with
Grain Management to Acquire Nebraska Telecommunications Company
Washington, DC – Grain Management, LLC (Grain), a leading private equity firm focused on investments in the communications sector, announced today that it has entered into a definitive agreement to acquire Great Plains Communications – the largest privately-owned telecommunications provider in Nebraska. “We are enthusiastic about the outstanding performance Great Plains Communications has delivered for its customers, and we are thrilled to partner with the current management team to continue pursuing their vision of being the region’s leading provider of high-quality, fiber-based telecommunications services,” said David Grain, Founder & CEO of Grain Management. Grain will acquire Great Plains Communications from its current owners, whose families have led the company’s growth since 1910, when it began as a local telephone company. Throughout its long history, Great Plains Communications has strategically transitioned itself into a leading regional provider of fiber-based services through significant investment in its state-of-the-art network and facilities. The company
GenNx360 Capital Partners Acquires Precision Aviation Group
GenNx360 Capital Partners (“GenNx360”), a New York-based private equity firm which invests in middle market business services and industrial companies is pleased to announce its acquisition of Precision Aviation Group, Inc. (“PAG” or the “Company”), effective July 26, 2018. PAG, established in 1993, is a leading provider of maintenance, repair and overhaul (MRO) and supply chain solutions for fixed and rotary-wing aircrafts serving diverse end markets. Headquartered in Atlanta, Georgia, the Company operates out of nine locations in the United States, Canada, Australia, Brazil and Singapore. “PAG is a leading provider of MRO services with a talented management team and a lot of growth potential.” said Daphne Dufresne, the GenNx360 Managing Partner who led the transaction. “PAG operates in a space that we know well and can add value through our industry relationships and operating initiatives. We look forward to working alongside management to capitalize on future growth opportunities.” David
Clearlake to Sell Automotive Interior Materials Supplier
Santa Monica, CA and Greenville, SC – July 19, 2018 – Clearlake Capital Group, L.P. (together with its affiliates, “Clearlake”) today announced a definitive agreement to sell Sage Automotive Interiors (“Sage” or the “Company”) to an affiliate of Asahi Kasei Corporation (TSE: 3407, “Asahi Kasei”). The transaction is subject to customary closing conditions and regulatory approvals. Sage is a leading global supplier of specialty designed, high-performance technical textiles and microfiber suedes for the automotive industry. During Clearlake’s four-year ownership, Sage executed on an investment thesis focused on transforming the Company into a diversified global platform. In partnership with management, Clearlake implemented its O.P.S.® framework. Organic growth initiatives at Sage focused on expanding the Company’s product offering and sales reach in Europe and Asia. These were supplemented by successfully executing on several strategic acquisitions, including the acquisitions of Miko S.r.l. and Apollo S.p.A. in Italy, which enabled the Company to expand
Marketing & Advertising Pitfalls: What’s an Investment Adviser to Do?
In September 2017, we provided a summary of the SEC’s Advertising Risk Alert noting that the most common deficiencies cited were all related to misleading performance advertising. Now we will look more broadly at the marketing and advertising challenges advisers face and offer guidance on how to avoid common marketing and advertising pitfalls, namely the use of testimonials and endorsements, social media, and performance advertising. Rule 206(4)-1 (the “Testimonial Rule”) explicitly prohibits testimonials and endorsements of any kind. The SEC consistently interprets testimonials to include any statement expressing a client’s experience with an advisor or endorsement of an adviser. Testimonials imply that the experience of the client providing the testimonial is typical of the experience other persons might have working with that adviser. Such expressions are therefore considered to be misleading. Advisors to private equity funds must be mindful of the fact that the SEC has determined that favorable statements
Pharos Capital’s Family Treatment Network Acquires CCMC School
DALLAS and NASHVILLE, Tenn., June 13, 2018 /PRNewswire/ — Pharos Capital Group, LLC (“Pharos”), through its Family Treatment Network platform (“FTN”), announced today that it has acquired the CCMC School, based in New Britain, CT. Additional terms of the transaction were not disclosed. The CCMC School, an affiliate of Connecticut Children’s Medical Center, provides comprehensive special education for students, from age five to 21, who require intensive intervention due to a range of behavioral, emotional and learning challenges. The CCMC School, which will be known as Solterra Academy following the end of the summer 2018 session, serves more than 100 children annually. Pharos established its Family Treatment Network platform to manage its investments in special schools, psychiatric residential treatment centers and community-based programs for children, adolescents and their families. Gwen Killheffer, Ed.D., principal of the CCMC School, and her team of highly specialized and trained administrators, teachers, and clinicians will
Grain Management Acquires Telecommunications Provider
June 19, 2018 – Washington, DC – Grain Management, LLC (Grain), a leading private equity firm focused on investments in the communications sector, announced today that it has entered into a definitive agreement to acquire Great Plains Communications – the largest privately-owned telecommunications provider in Nebraska. “We are enthusiastic about the outstanding performance Great Plains Communications has delivered for its customers, and we are thrilled to partner with the current management team to continue pursuing their vision of being the region’s leading provider of high-quality, fiber-based telecommunications services,” said David Grain, Founder & CEO of Grain Management. Grain will acquire Great Plains Communications from its current owners, whose families have led the company’s growth since 1910, when it began as a local telephone company. Throughout its long history, Great Plains Communications has strategically transitioned itself into a leading regional provider of fiber-based services through significant investment in its state-of-the-art network and
Web.com to be Acquired by Siris Capital Affiliate in Deal Valued at Roughly $2 Billion
JACKSONVILLE, Fla, June 21, 2018 – Web.com Group, Inc. (NASDAQ: WEB), a leading global provider of a full range of Internet services and online marketing solutions for small and medium‐sized businesses, today announced that it has entered into a definitive agreement to be acquired by an affiliate of Siris Capital Group, LLC in an all-cash transaction valued at approximately $2 billion. Under the terms of the agreement, which has been unanimously approved by the members of Web.com’s board of directors, an affiliate of Siris will acquire all of the outstanding common stock of Web.com for $25.00 per share in cash. The purchase price represents a 30% premium over Web.com’s 90-day volume-weighted average price ended on June 19, 2018. A special meeting of Web.com’s shareholders will be held as soon as practicable following the filing of a definitive proxy statement with the U.S. Securities and Exchange Commission (“SEC”) and subsequent mailing
GTCR and Sycamore Partners Complete Acquisition of CommerceHub
May 21, 2018 – Affiliates of GTCR and Sycamore Partners, two leading private equity firms, today announced the closing of the acquisition of CommerceHub, Inc. (“CommerceHub” or the “Company”), a leading distributed commerce network for retailers and brands. “The closing of this transaction represents a new and exciting chapter for CommerceHub,” said Frank Poore, CommerceHub’s Founder, President and CEO, who will continue in these roles. “GTCR and Sycamore Partners each bring deep industry expertise to help us to execute our vision for the future of retail. Together, we look forward to accelerating the development of CommerceHub’s platform to transform how retailers and brands drive growth through ecommerce.” “CommerceHub benefits from a highly strategic position in ecommerce due to its differentiated platform that enables retailers’ most critical growth strategies,” said Mark Anderson, Managing Director of GTCR. “We are excited to build on CommerceHub’s momentum and deliver on its vision for a