Advent takes 38% secondary stake in party company

The global private equity firm has purchased a minority stake in Amscan Holdings from private equity firms Berkshire Partners and Weston Presidio as well as management, all of which remain shareholders.

Advent International has acquired a 38 percent stake in party supplies company Amscan Holdings from existing shareholders. Financial details were not disclosed.

Amscan is an Elmsford, New York-based manufacturer, distributor and retailer of party goods. The company operates more than 950 stores under the brand names Party City, Party Americas, Factory Card & Party Outlet, The Paper Factory and Halloween USA.

Advent joins Berkshire Partners and Weston Presidio as well as the company’s management as shareholder. The two private equity firms gave up partial ownership as part of the secondary transaction, according to Advent managing director Steven Collins.

Berkshire owned 59 percent of Amscan and Weston Presidio owned 29 percent prior to Advent’s investment, according to a secondary investor familiar with the company. The balance was owned by Amscan’s management and Gordon Brothers Merchant Banking, the private equity and debt affiliate of investment and advisory firm Gordon Brothers Group.

Collins declined to comment on whether Gordon Brothers remains a shareholder following Advent’s investment. Gordon Brothers did not reply to requests for comment by press time.

The minority investment was made from Advent’s sixth global buyout fund, which closed on €6.6 billion in April.

Berkshire is a mid-market private equity firm which closed its most recent of seven funds on $3.1 billion in 2006.

Weston Presidio provides between $10 million and $75 million of growth capital to late-stage growth companies. The firm has raised $3.3 billion in commitments across five funds since its founding in 2001.

Boston, Massachusetts-based private equity firm Advent has more than $40 billion under management. The firm’s global funds invest in Western Europe and North America. Advent has separate funds for investment in Central Europe and Latin America.

Advent’s investment in Amscan comes at a time when the slowing US economy is putting pressure on consumer and retail businesses.

“Party supplies is somewhat insulated from the economy and the times out there … when somebody has their third birthday, you’re not going to wait for the recession to end to celebrate it,” said Collins.

Consumer and retail is one of Advent’s core sector focuses. The firm has made more than 25 retail investments, the most recent of which was a majority investment, agreed in July, in French fashion brand Gérard Darel. Its previous retail investments include athletic apparel company lululemon athletica, US home décor retailer Kirkland’s and UK clothing retailer Fat Face.

Advent is a minority shareholder in approximately 40 percent of its portfolio companies, said Collins.