Sageview Capital LLC | Hedge Fund Tracker Notes

Sageview Capital LLC

Sageview Capital | Hedge Fund Notes

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Resource #1: EverBank Financial Corp announced today that it has received a capital investment of approximately $100 million from an affiliate of Sageview Capital LP, a private investment firm. The capital will be used to support continued significant growth in EverBank’s core banking and mortgage business lines. “Sageview’s investment in EverBank will fuel a substantial expansion plan, enabling EverBank to grow our assets by over 30% to approximately $8 billion and dramatically expand our direct deposit customer base,” stated Rob Clements, Chairman and CEO of EverBank. “While other banks and financial institutions have needed to raise equity to shore up capital, EverBank has generated record year-to-date earnings and has a
strong balance sheet, which will enable us to deploy capital offensively to take advantage of recent market disruptions. After reviewing several alternatives, we selected Sageview as our capital partner. The principals at Sageview have a 20 year history of backing management teams to grow their businesses over the long term,” continued Clements. Under terms of the investment, Sageview will become the largest stockholder of EverBank Financial Corp. source

Resource #2: In August 2005, Blue Harbour Group, a small fund based in Connecticut, began buying shares in Laidlaw (NYSE:LI) , operator of America's largest fleet of yellow school buses and Greyhound coaches. The company was weighed down by Greyhound, which was struggling to compete with other forms of transport such as low-cost airlines, but the school bus business was doing well, churning out healthy cash-flow from a series of recurring long-term contracts.

More importantly for Blue Harbour, Laidlaw's management was receptive to change, including buy-backs and the possible separation of Greyhound. The fund earned a 40 per cent return on its investment in February 2007, when Britain's FirstGroup agreed to buy Laidlaw for $35.25 per share – well above the $23 per share Blue Harbour paid for its stake.

The success of that deal highlighted Blue Harbour's unusual strategy, which combines elements of both private equity investing and shareholder activism, and is becoming increasingly popular on Wall Street.

Sageview Capital, a fund based in Greenwich and , founded by KKR alumni Scott Stuart and Ned Gilhuly also puts money to work this way. Loosely called "private equity-style investing in the public markets", the strategy has been employed by US investors such as Warren Buffett and Eddie Lampert. source

Resource #3: It’s a reality that most of us know: The most difficult time to get
money from a bank is when you really need it. Now, banks themselves are in the same situation as they seek new sources of capital to shore up their finances. “It’s tough sledding out there,” said Nick Robbins, a corporate attorney at
Gunster Yoakley & Stewart in West Palm Beach. “You’ve got economic
slowdown concerns, a possible recession; you’ve got the [lending]
crisis that directly hits the banks. There’s not a lot of new appetite for initial
public offerings right now, which makes it hard for banks because there
are not a lot of investors out there.” Throw in everything from the weak
dollar to the election year climate, and “it makes companies and issuers want
to put their head in the sand.” Banks just aren’t seen as good investments
right now. BankUnited learned that the hard way when its efforts this
summer to raise $400 million through a public offering fell flat. BankAtlantic last
week postponed plans to raise a more modest $55 million in “non-regulatory”
capital. “Unfortunately, companies still have to grow regardless of the cycle,”
Robbins said. “For a lot of companies, whether it’s a bank or a technology
company, they’re having to look into alternative ways of financing the companies.”

Resource #4: ACE Aviation Holdings has announced that it has agreed to sell a 70 per cent interest in its wholly owned maintenance, repair and overhaul subsidiary ACTS LP to a consortium consisting of Sageview Capital, a private investment firm, and KKR Private Equity Investors, the publicly traded fund of Kohlberg Kravis Roberts and Co. The transaction implies an enterprise value of approximately $975m for 100 per cent of ACTS on a cash and debt free basis.
ACE will retain a 30 per cent equity interest in ACTS and Air Canada will remain its largest customer.

'This transaction is an important step in ACE's strategy of unlocking the value in all of our businesses,' said Robert Milton, Chairman, president and CEO of ACE. 'ACE's retained 30 per cent ownership of ACTS in partnership with Sageview and KKR is in line with our strategy of generating additional value for our shareholders by furthering the development of ACTS as a stand-alone, profitable entity. Among their many successes, KKR and Sageview have a track record of helping businesses that were once part of large conglomerates to become bigger, stronger and more competitive as independent organisations. Prime examples include Shoppers Drug Mart, Yellow Pages Group, and ITC, the former transmission business of Detroit Edison. They bring a long-term approach to creating lasting value, and together with them we believe great things will happen with ACTS.'

Scott Stuart, a founding partner of Sageview, said, 'ACTS has established itself as a premier maintenance, repair and overhaul organisation for the airline industry. With its highly talented management team and skilled labour force, the company is well positioned to build on its broad technical strengths and leadership position in the Canadian market for long-term growth. We and KKR look forward to leveraging our experience in building successful, independent businesses to assist ACTS' management in developing the business across the Americas.' source

Resource #5: The firm represents Sageview Capital and KKR in their acquisition of the maintenance, repair and overhaul operations of ACTS LP, an affiliate of ACE Aviation Holdings, Inc. and Air Canada. The transaction is structured as a sale of all of the assets of ACTS LP to a newly formed entity owned by an affiliate of Sageview Capital LLC and an affiliate of KKR Private Equity Investors, L.P. (Euronext Amsterdam: KPE), the publicly traded fund of KKR. ACE will acquire a 30% equity interest in the purchasing entity as part of the consideration and Air Canada will remain the largest customer of the business. The transaction implies an enterprise value of approximately $975 million (CAD) for 100% of ACTS on a cash and debt free basis.

The transaction represents the first buy-out transaction by Sageview Capital, which was founded in 2006 by Edward A. (“Ned”) Gilhuly and Scott M. Stuart, both former partners of KKR. KKR Private Equity Investors, L.P. is a Guernsey limited partnership that seeks to create long-term value by participating in private equity and opportunistic investments identified by KKR.

The attorneys working on the transaction include David Sorkin, Sean Rodgers, Andy Calder, Jeff DeMartino, Patricia Ruvalcaba, Steve Todrys, Katharine Moir, Alvin Brown, Aimee Adler, Marissa Wesely and Herbert Huang. source

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