Beverly Hills private equity firm Regent spent the last three years quietly amassing a portfolio of small news outlets, tech companies and assorted other assets.
The corporate divestiture specialist’s deals flew under the radar even as it gathered a roster companies with more than 1,000 employees combined.
“We tried to stay under the radar,” said Michael Reinstein, firm founder and chief executive. “When dealing with corporate divestitures, typically companies don’t want you out there talking about the deal.”
That all changed last week with Regent’s acquisition of Edina, Minn.-based Regis Corp.’s mall-based hair salon business unit and franchise operation.
A dollar value for the transaction has not yet been disclosed – Regis is publicly traded and currently in a quiet period – but the deal gives Reinstein’s outfit control of more than 1,100 hair salons in North America and the United Kingdom along with close to 10,000 new employees. Brands include Regis Cuts and Master Cuts in North America and Super Cuts in the U.K.
“This is very different for us,” Reinstein said.
The sheer scale of the new business might seem daunting, but Reinstein said that after six months of scrutiny from both parties he feels confident about the firm’s prospects.
“The folks at Regis were very meticulous about due diligence,” Reinstein said. “They wanted to make sure whoever bought the business was going to scale up not down.”
He said Regent uses a shared business services platform that could be easily adapted for the new hair salon outfit, and that the firm has a team that is already onboarding new employees and going over operational structures.
Previous deals for Regent include the purchase of Sightline Media Group, which includes a portfolio of defense industry and military focused publications based out of Washington D.C.; NexTag, an Internet-based products search company headquartered in San Mateo; and Scottsdale, Ariz.-based Pegasus Solutions, which offers technology solutions to the travel and hospitality industries.
Regent does not operate as a fund and does not solicit outside capital, Reinstein said. The firm primarily uses the serial entrepreneur’s own money for acquisitions.
This structure allows him more freedom in how he runs portfolio companies.
“I’m not just a pure quant guy looking at the numbers,” Reinstein said. “I get to be an activist within a business and usually come in and shake things up from day one.”
There’s no plans to change that strategy and go out on the fundraising trail, even with Regent’s operations shifting scale.
“It’s my money and we’ve operated as a family office up until this point,” Reinstein said. “There’s so many new ways to spend private equity these days. I’m not really interested in having a fund.”
Huron Consulting Group Inc. acted as financial advisors to Regis, with Ropes & Gray, DLA Piper, Wachtell Lipton and Quastel Midgen providing legal counsel. Regent received legal advice from Morgan Lewis & Bockius and Steinbrecher & Span.
Vance Street Capital of West Los Angeles wrapped up two medical device manufacturing facilities in another corporate divestiture play featuring local private equity money
The firm purchased the plants, located in Wall Township, N.J. and originally part of Adam Spence Corp., from W.L. Gore & Associates for an undisclosed sum. The spinoff is being renamed Fermatex Vascular Technologies. The purchased facilities make high pressure braided tubing and extrusions for catheters and cardiovascular medical devices.
Vance Street Partner Mike Janish said in a statement the new company would be a growth platform for the firm in the medical device space.
“Fermatex provides an exciting platform for growth and enables us to partner with a strong team with world class capabilities in the manufacturing of complex medical catheter components,” Janish said. “This latest acquisition will enable us to leverage Vance Street’s considerable expertise and relationships and create a world-class catheter engineering and manufacturing company.”
Morgan Gets Mesa
Brentwood-based Mesa West Capital is joining the big boys.
The real estate credit firm, which manages some $5 billion in assets, has been acquired by industry giant Morgan Stanley Investment Management (MSIM) and will operate as a stand-alone unit within the firm’s Real Asset practice group. MSIM is a subsidiary of Morgan Stanley.
Jeff Friedman and Mark Zytko, co-founders of Mesa West, said in a statement the deal made sense as a long-term option for the firm.
“MSIM is the ideal long-term strategic partner for Mesa West,” they said. “Its strong commitment to real estate and deep global relationships and resources will help us continue to provide the best solutions and investment performance for our investors and long-term opportunities for our team.”
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