Kohlberg & Company takes sports caterer private

Middle market specialist Kohlberg & Company has agreed to pay between $185m and $205m million in equity and assumed debt for Connecticut-based Centerplate.

US private equity firm Kohlberg & Company has agreed to purchase sports arena and convention center caterer Centerplate for between $185 million (€128 million) and $205 million.
If approved by more than 50 percent of shareholders, Kohlberg will pay roughly $58 million to owners of Centerplate income deposit securities, an unconventional security which marries public equity shares with debt notes. The middle market specialist has agreed to pay $4 per income deposit security, a 33 percent premium over Centerplate’s closing price yesterday.
Kohlberg has also agreed to assume a significant amount of Centerplate’s debt, including a $96 million outstanding term loan and a revolving credit facility with a range between $35 and $50 million, according to Gael Doar, head of investor relations for Connecticut-based Centerplate.
Centerplate provides gourmet catering services to more than 120 sports facilities, convention centers and other entertainment venues throughout the US and Canada. The company, which went public in 2003, also provides concessions and merchandise services.
Centerplate shares have been struggling in recent months after the company said in April that it may halt dividend payments due to credit-related difficulties. Centerplate began considering alternative financing arrangements, including external buyers, in May.
The company reported sales of $238.3 million for the second quarter of 2008, up 19 percent from the same period last year.
Silicon Valley-based Kohlberg & Company financed the deal through an undisclosed combination of debt and equity. The firm, established by former Kohlberg Kravis Roberts co-founder Jerome Kohlberg, typically invests in middle market companies with enterprise values between $100 million and $500 million, making investments with median debt-to-equity ratios of three-to-one.