Boston-based JW Childs Associates and Merrill Lynch Global Private Equity acquired a control position in Advantage Sales & Marketing from Allied Capital. The deal gives the California-based business a $1.05 billion (€866 million) enterprise value.
Advantage was launched in October 1997, and through acquisitions quickly grew to its current size. The company is one of three national sales and marketing agencies, according to its website, and provides outsourced sales, merchandising and marketing services to consumer product companies. Advantage books over $700 million in revenues annually and serves clients such as Del Monte, SC Johnson, Unilever, Schering Plough and others.
JW Childs has been an active player in the consumer product space in the past, which is the area in the market that Advantage caters to. Previous deals for the firm include investments in Ghirardelli Chocolate Company, beverage marketer Snapple Beverage Corp. and cat-food maker Meow Mix.
The publicly held Allied Capital generated a significant return on the investment in a relatively short period of time. The firm, which acquired Advantage in 2004 through a $257 million debt and equity investment, logged a $430 million gain on the sale.
The Washington DC-based Allied, according a statement, received a $150 million subordinated note as part of the $430 million payday, with the balance coming in the form of cash. Allied was also repaid $184 million in subordinated debt that had been outstanding, and Allied and company management retained equity investments in Advantage as part of the sale.
Sawaya Segalas & Co. advised Allied on the sale.