Wellspring Capital Management LLC · creating the largest player in the diversiﬁ ed steel ... is...

Wellspring Capital Management LLC

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Wellspring is

a leading private equity

investor in middle-market

companies.

A strategic partner

to management

in unlocking potential

and creating value.

1



companies

to management


and creating value.

ccoompanies..

1

Wellspring is



companies.

A strategic partner

to management


and creating value.

Wellspring’s consistent investment

approach has resulted in ...

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201%

184%

100%

Superior Performance

Wellspring’s

long-term track record

ranks among

the top private

equity funds.

A Stable Capital Base

We have grown assets

under management

with each successive

fund raised since

our initial fund in 1995.

Fund I (1995)

$85 Million

Fund V(2011)$1.2 Billion

Fund II (1998)

$268 Million

Fund III (2002)$640 Million

Fund IV (2006)$1 Billion

Benchmark = MedianIndustry Performance*

*Source: Cambridge Associates for similar

vintage funds.

Top Quartile vs. Benchmark

Wellspring Performance vs. Benchmark

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EXPERIENCE

The partners of Wellspring have worked closely together for

over a decade and have a broad range of industry experience. We appreciate the challenges

that senior management face in driving change and creating value.

PARTNERSHIP

Wellspring partners with motivated senior management teams, actively working together to unlock a company’s potential value. It is a true partnership with no bureaucracy.

RELIABILITY

Our most valuable asset is our reputation. We understand

that reliability, integrity and straightforwardness are

paramount to success at every stage of an investment.

“Wellspring’s teamwork and spirit of productive

collaboration with executive management

created a synergy level that enabled our company

to become a premier institution in the post-

secondary education market.”PAM BELL

Chief Executive Offi cer Vatterott Educational Centers, Inc.

• Grew enrollment through new programs tied to

local job demand

• Enhanced the demographic appeal by increasing

the mix of female student enrollment from 15%

to 51%

• Leveraged the company’s large Midwest

footprint with fi ll-in campuses

• Expanded and renovated over 75% of

campus facilities

• Created a centralized organization under a

“best in class” management team

PERFORMANCE

Return on Invested Capital: 5.3x

A premier post-secondary education operator with

leading market share in the Midwest.

An acquisition of a closely held family-owned

and operated business.

Multiple Expansion

21%

Debt Reduction

15%

Earnings Growth

64%

“GAME PLAN” ACHIEVEMENTS

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Source of Value Creation

CASE STUDY

A PROVEN INVESTMENT STRATEGY

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IDENTIFY OPPORTUNITY

Wellspring targets strong business franchises in mature industries

that have opportunities for value creation through market share gains

and margin expansion.

We welcome complex situations where business plan execution is

critical to creating value.

EXECUTE “GAME PLAN”

Wellspring believes that partnering with strong management is the

key to unlocking the underlying value of any company.

We understand that execution of a well thought out business plan is the

key to a successful investment.

STRUCTURE CONSERVATIVELY

Wellspring is committed to the principle that investment returns are maximized by growing profi tability and not from the use of fi nancial leverage.

We provide a strong equity base so senior management has the fl exibility to execute and weather industry swings.

JOSEPH CURTINChief Executive Offi cer

Tube City IMS Corporation

• Completed the merger of IMS and Tube City,

creating the largest player in the diversifi ed steel

services sector

• Successfully implemented a complex

cross-selling strategy

• Realized synergistic cost effi ciencies

• Developed an international growth platform,

expanding operations in Asia, Europe,

and South America

• Facilitated multiple expansion by opening

growth avenues

PERFORMANCE


A leading provider of outsourced

services to the global steel industry.

A carve-out of a healthy, non-core division

of a bankrupt conglomerate.

Multiple Expansion

81%

Earnings Growth

19%



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“Wellspring has a long history of working

collaboratively with management and we could

not have successfully created the largest

player in the diversifi ed steel services sector

without their endless support.”

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CASE STUDY

SEEKING OPPORTUNITIES TO CREATE VALUE

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BROAD FOCUS

IN ESTABLISHED

INDUSTRIES

With value oriented characteristics:

Brand equity

Limited obsolescence risk

Advantages versus foreign competition

COMPANIES IN

TRANSITION

Private ownership transfers

Corporate carve-outs

Public to private transactions

Bankruptcies and restructurings

OPPORTUNITY

FOR VALUE CREATION

Organic market share gains

Productivity improvements

Strategic acquisitions

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GEORGE HOLMChief Executive Offi cer

Vistar Corporation

• Aggressively grew through both organic and

acquisition-based opportunities to build scale

and route density

• Acquired Roma in 2004, the leading food

service distributor to independent pizza

restaurants in the United States

• Shed over $500 million of unprofi table

national-chain accounts

PERFORMANCE


A national distributor of food,

snacks, and related products to the

food service and vending industries.

A carve-out of a non-core

division of a public company.

Multiple Expansion

18%

Earnings Growth

82%



“The acquisition of Vistar/VSA would

not have been possible without the

insight and commitment of the

Wellspring team.”

CASE STUDY

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STRONG BALANCE SHEETS

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LARGE EQUITY BASE

Every Wellspring investment is structured with a large equity base

and modest debt levels.

Our companies are capitalized to weather unanticipated

bumps in the road and facilitate “Game Plan” execution.

DEEP LENDER RELATIONSHIPS

Wellspring’s ability to attract debt fi nancing in good markets and bad

is a key competitive advantage.

We have a network of debt providers who acts as partners and value our conservative investment approach

and track record.

Wellspring avoids market bubbles and investment fads and employs conservative leverage regardless of market cycles.

BELOW MARKET LEVERAGE

1999-2001 WCM Fund II: 2.3x

Industry: 4.3x

2006-2010 WCM Fund IV: 3.6xIndustry: 5.0x

2002-2005 WCM Fund III: 3.4x

Industry: 4.7x Source: S&P 3Q 2010.

CASE STUDY

STEVE KINGChief Executive Offi cer

Dave & Buster’s, Inc.

• Assembled a world class management team of

executives who previously led brands such as

TGI Friday’s, Chili’s and Six Flags

• Invested heavily in research and systems to assist

management to derive decisions based on

quantitative and qualitative benchmarking

• Implemented a national TV advertising program

to extend the brand’s reach

• Developed a new, smaller store format to allow

the brand to grow

PERFORMANCE


A premier national owner and operator

of high-volume entertainment/casual dining

units in the United States.

A take-private transaction of a public company.

Multiple Expansion

37%

Earnings Growth

63%



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“Wellspring brought considerable strategic value to

our business, resulting in several years of record

growth and signifi cant increases in profi tability.

We thank the fi rm for its support and for positioning

Dave & Buster’s for continued success.”

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PARTNERS TO MANAGEMENT

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DISTINGUISHED REPUTATION

Wellspring has built a reputation as an attractive partner to

senior management teams.

We provide support to our senior management partners but

do not profess to be the day-to-day managers of our portfolio companies.

VALUE CREATION

We draw on deep transactional experience to position investments

for a successful exit. We work to understand what fi nancial and

strategic buyers are looking for.

Management incentive plans are structured so that our interests are

aligned in driving economic returns.

COLLABORATIVE PLANNING

We believe in setting achievable “Game Plans” that focus on the largest opportunities to create value.

We understand that resources are limited and companies cannot focus on key value drivers.

EXPERIENCED AND COHESIVE TEAM

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From Left to Right: Greg S. Feldman; Joshua C. Cascade; William F. Dawson, Jr.; Alexander E. Carles; Carl M. Stanton; John E. Morningstar

GREG S. FELDMAN Managing Partner

Greg S. Feldman co-founded Wellspring in January 1995. For four years prior to the formation of Wellspring, he was in charge of acquisitions at EXOR America Inc. (formerly IFINT USA, Inc.), the U.S. investment arm of the Agnelli Group. For two years before joining EXOR, Greg was vice president and co-founder of Clegg Industries, Inc., an investment fi rm backed by Drexel Burnham Lambert Incorporated to invest in leveraged acquisitions of middle-market manufacturing companies. From 1983 to 1988, Greg was a mergers & acquisitions lawyer at Paul, Weiss, Rifkind, Wharton & Garrison in New York. Greg has served on the boards of numerous public and private companies and is actively involved in several charitable organizations. He has a Bachelor of Arts degree from Hampshire College and a JD from the Benjamin N. Cardozo School of Law, where he was Editor-in-Chief of the Law Review.

Born and raised: New York, NY

WILLIAM F. DAWSON, JR. Managing Partner

William F. Dawson, Jr. joined Wellspring as a partner in 2001. He previously spent one year at Whitney & Co., where he was head of the middle-market buyout group. Prior to that, Bill spent 14 years at Donaldson, Lufkin & Jenrette Securities Corporation where he was most recently a managing director at DLJ Merchant Banking. Bill has been involved in numerous acquisitions and recapitalizations as well as leveraged fi nancings and restructurings. He has served on the boards of a variety of public and private companies. Bill received a Bachelor of Science degree from St. Francis College and an MBA from Harvard Business School.

Born and raised: Brooklyn, NY

CARL M. STANTON Managing Partner

Carl M. Stanton joined Wellspring in 1998. He previously served as a principal of Dimeling,Schreiber & Park, a middle-market private equity fi rm. Prior to this, he worked at Peter J. Solomon Co., a boutique investment bank specializing in mergers & acquisitions and restructuring advisory services, and in the National Offi ce and Corporate Finance Group of Ernst & Young. Carl serves on a number of company boards of directors and is active with the University of Alabama, where he serves on the Commerce & Business Administration Board of Visitors, and other non-profi t organizations in New York City. Carl holds a Bachelor of Science degree from the University of Alabama and an MBA from Harvard Business School.

Born and raised: Montgomery, AL

ALEXANDER E. CARLES Partner

Alexander E. Carles joined Wellspring in 2001. He was previously at Whitney & Co. where he was a senior associate in that fi rm’s middle-market buyout group. At Whitney & Co. Alex worked on a range of transactions in industries such as plastics, consumer products, telecommunications and media investments. Prior to Whitney, Alex was a high yield research analyst with Lehman Brothers, Inc. Alex graduated with honors from the College of William & Mary with a Bachelor of Arts degree in economics.

Born and raised: New Canaan, CT

JOSHUA C. CASCADE Partner

Joshua C. Cascade joined Wellspring in 2002. He previously spent four years with Odyssey Investment Partners where he worked on a number of leveraged acquisitions and recapitalizations of middle-market companies. Prior to joining Odyssey, Josh spent four years with The Blackstone Group in the restructuring group, advising clients in corporate turnarounds, debt restructurings and Chapter 11 reorganizations. Josh has served on the board of a variety of private companies. Josh received a Bachelor of Business Administration degree from the University of Michigan.

Born and raised: Detroit, MI

JOHN E. MORNINGSTAR Partner

John E. Morningstar joined Wellspring in 2007. He previously served as a managing director at Castle Harlan, where he worked on transactions in a diverse group of industries including packaging, consumer products, plastics, metals, and restaurants, and served on the boards of a number of portfolio companies. Prior to Castle Harlan, John worked in the investment banking department of Merrill Lynch & Co., where he assisted clients in corporate fi nance and strategic mergers. John received a Bachelor of Science degree from the University of Virginia and an MBA from The Wharton School of The University of Pennsylvania. John is a member of the Beta Gamma Sigma Honor Society.

Born and raised: Westminster, MD

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1414

Hess Print Solutions, Inc., headquartered in Downers Grove, Illinois, is a North American printer serving the education and commercial print markets.

Cleaver-Brooks, Inc., headquartered in Milwaukee, Wisconsin, produces energy effi cient highly engineered fi retubes, watertubes and large custom boilers.

Stripes Holdings, LLC (NYSE: SUSS), headquartered in Corpus Christi, Texas, is the largest independent convenience store operator and non-refi ning motor fuel distributor in Texas.

OMNI Energy Services, headquartered in Carencro, Louisiana, is a provider of environmental services and seismic services to the domestic oil and gas industry.

Neucel Specialty Cellulose Ltd., headquartered in Vancouver, British Columbia, is a producer of specialty chemical cellulose that is a feedstock in a large number of applications.

Dave and Buster’s, Inc., headquartered in Dallas, Texas, is North America’s largest operator of large-format, high-volume restaurant / entertainment complexes, combining high-quality casual dining with an extensive array of entertainment attractions.

Vatterott College, headquartered in St. Louis, Missouri, is a private for-profi t post-secondary education company in the United States.

Vistar Corporation (formerly known as Multifoods Distribution Group, Inc.), headquartered in Centennial, Colorado, is a distributor of food and other products to the foodservice and vending industries in the United States.

Edwin Watts Golf Shops, LLC, headquartered in Fort Walton Beach, Florida, is a retailer of golf equipment, apparel and accessories.

Tube City IMS Corporation, headquartered in Pittsburgh, Pennsylvania, is a provider of outsourced services to the global steel industry.

Protectron Security Systems, headquartered in Montreal, Canada, sells, leases, installs, monitors and maintains alarm systems for residential and commercial subscribers and provides third-party monitoring services for smaller alarm installers.

Residential Services Group, Inc., headquartered in Dayton, Ohio, is one of the nation’s largest providers of heating, ventilation, air-conditioning and refrigeration (HVAC) and plumbing services to the residential and light commercial markets.

American Coin Merchandising, Inc., headquartered in Boulder, Colorado, is an owner, operator and franchisor of coin-operated amusement vending equipment in the United States.

Paragon Trade Brands, Inc., headquartered in Norcross, Georgia, is a manufacturer of private label infant disposable diapers in the United States and Canada.

Far&Wide Travel Corp., headquartered in Miami, Florida, is a tour operator in North America.

Brook Mays Music Company, headquartered in Dallas, Texas, is a full-line musical instrument retailer in the United States.

PORTFOLIO COMPANIES

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National Seating & Mobility, headquartered in Nashville, Tennessee, provides customized wheelchairs and adaptive seating systems for individuals who have been diagnosed as having a permanent or long-term loss of mobility .

API Heat Transfer Inc., headquartered in Buffalo, New York, is a manufacturer of heat exchangers with a complementary product line and geographic distribution compared to ThermaSys Corporation.

ThermaSys Corporation, headquartered in Montgomery, Alabama, is a manufacturer of a wide range of heat exchangers and heat exchanger components.

Resco Products, Inc., headquartered in Pittsburgh, Pennsylvania, is a North American producer of value-added refractory solutions.

Crosman Corporation, headquartered in East Bloomfi eld, New York, is the world’s leading designer, manufacturer and marketer of airguns, airsoft guns and related category consumables.

Prolamia, headquartered in Westfi eld, Massachusetts, supplies the food packaging, health care and industrial markets with a wide range of extrusion coated and laminated, metalized, and adhesive laminated structures.

United Sporting Companies, headquartered in Columbia, South Carolina, is a nationwide distributor of hunting, outdoor, marine and tackle products. The Company operates through two subsidiaries, Ellett Brothers and Jerry’s Sport Center.

Performance Food Group, headquartered in Richmond Virginia, is the third largest foodservice distribution company in the United States.

ChemAid Laboratories, Inc., headquartered in Saddle Brook, New Jersey is a leading contract manufacturer of premium hair care, skin care and bath and body treatment products.

JW Aluminum Company, headquartered in Mt. Holly, South Carolina, is a producer of specialty fl at-rolled aluminum products.

Checkers Drive-In Restaurants, Inc., headquartered in Tampa, Florida, is the largest double drive-thru restaurant chain in the United States.

Renin and Home Décor Europe, headquartered in Toronto, Canada, and Sheffi eld, England, respectively designs and manufactures closet door and wall décor products.

UNITED SPORTING COMPANIES

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BRIAN J. RECATTO President and Chief Executive Offi cer

OMNI Energy Services Corporation

A premier provider of environmental and production

services to the oil and gas industry.

A take-private transaction of a public company.

“During the past two years we have

received from Wellspring the

strategic, fi nancial and operational

resources necessary to implement our

growth strategy and capitalize on very

attractive market opportunities.”

CASE STUDY

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• Repositioned the Company as a specialized

environmental services business, that would

command a premium valuation to the broader

oilfi eld services sector

– Bundled fluid handling and environmental

services with high cost of failure to customers

– Added innovative services to meet market

needs (e.g., growing issue of drilling

waste disposal)

• Geographically diversifi ed the business with

a focus on high growth basins

– Before Wellspring, OMNI focused primarily

on the Gulf of Mexico

– Under Wellspring ownership, OMNI

expanded to nine basins, including the

Bakken, Eagle Ford, Niobrara, and Anadarko

• Positioned OMNI into production and

oil-based services

– Focused geographic expansion on oil-rich

basins

– Expanded production-based services, which act

as a more stable revenue source versus drilling

PERFORMANCE


Earnings Growth

65%

Multiple Expansion

33%

Debt Reduction

2%



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P. WELCH GOGGINS, JR.President and Chief Executive Offi cer

Cleaver-Brooks, Inc.

A leading specialized provider

of boiler room solutions.

An acquisition of a sponsor-owned company.

“Wellspring’s strategic and fi nancial

support during an extremely

turbulent period for the economy

provided us with the insight and

stability we needed to meet our

business objectives.”

CASE STUDY

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• Leveraged competitive strengths to capitalize on

market growth drivers

– Expanded product lines to cater to the

growing energy-efficiency and low-emission

needs of the markets

• Expanded the Company’s high-margin

aftermarket segment

• Signifi cantly reduced costs through lean and

procurement initiatives

• Established a sophisticated sales and marketing

plan implemented across the entire organization

• Grew organically and through strategic

acquisition

PERFORMANCE


Earnings Growth

45%

Multiple Expansion

49%

Debt Reduction

6%



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Wellspring is



companies.

A strategic partner

to management


and creating value.

Des

ign

ed a

nd

pro

du

ced

by

Tay

lor

& I

ves,

In

c., N

YC

18

c2

390 Park AvenueNew York, NY 10022-4608

www.wellspringcapital.com

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