Riverside in 2.8x business services exit

The sale of insurance services provider Global Claims Services marks the first exit for the firm’s flagship fund, Riverside Capital Appreciation Fund V.

The Riverside Company has sold insurance services company Global Claims Services to US mid-market private equity peer Windjammer Capital Investors, generating a 2.8x gross return multiple and 29 percent gross internal rate of return.

Global Claims Services helps determine fair market value of damaged flooring and other building materials.

“We typically seek out niche leadership businesses in industries that a lot of people don’t even know exist, and this happens to be one of those,” Riverside vice president Marty Graul told Private Equity International. “There are other companies offering claims services to insurance carriers, but none that we know of in this testing environment for surfaces.”

Riverside acquired the company in 2008 as the first investment from its flagship fund, Riverside Capital Appreciation Fund V, which closed on $1.17 billion in 2008. Global Claims Services marks the first exit for the fund, which has investments in 23 portfolio companies, and is Riverside’s fifth exit this year.

Riverside Capital Appreciation Fund V targets businesses with between $5 million and $20 million in annual earnings. The fund is more than 50 percent invested.

Riverside did not comment on when the firm would be coming back to market with its next fund.

The firm has remained one of the most active investors in the North American mid-market this year. Riverside completed 29 investments in 2011 and has made 15 platform investments through the second quarter of this year.

In addition to its flagship fund, the firm invests the Riverside Micro-Cap Fund, which targets North American companies with up to $5 million of earnings before interest, tax, depreciation and amortisation; a Europe-focused fund; and a fund targeting businesses in the Asia-Pacific region.