One Equity to lead $155m PIPE for colour company

The JPMorgan unit, Sagard Capital Partners and Tinicum Capital Partners have agreed to acquire newly issued stock from X-Rite as a part of the company’s plan to reduce its debt by $144m.

Private investment firms One Equity Partners, Sagard Capital Partners and Tinicum Capital Partners have agreed to provide a total of $155 million (€105 million) in PIPE (private investment in public equity) funding to colour-service provider X-Rite.

The funding will be provided as part of X-Rite’s plan to substantially reduce its debt, primarily by raising new equity.

New shareholder One Equity Partners, the private equity arm of JPMorgan Chase will invest $100 million in newly issued common stock at a price of $3.50 per share.

One Equity Partners, which was established in 2001, manages a total of $8 billion of private equity investments and commitments across sectors including defense, chemicals, healthcare, technology and manufacturing.

Existing investors Sagard Capital and Tinicum Capital will invest $27.2 million and $27.8 million respectively at a price of $3 per share.

Greenwich, Connecticut-based Sagard Capital is an investment fund focused on acquiring minority positions in publicly-traded, small-cap companies in North America. The firm is wholly owned by international management and holding company Power Corporation of Canada which founded the firm with cash resources of $250 million.

Tinicum closed its second investment fund on $1.2 billion in May 2004. The New York firm, backed entirely by individuals and families, seeks to acquire control of companies through acquisitions or restructurings or to take minority stakes in public or private companies through equity or debt securities. Investments are generally between $25 million and $75 million in size.

As a result of the transactions, expected to close in the fourth fiscal quarter, X-Rite’s total number of shares outstanding will increase from 29.6 million to 76.5 million. Upon completion, company debt will decrease from $411 million to $267 million.