Fox Paine Traps Two Deals –

Either Fox Paine & Co. has no intention of taking part in the normal summer lull or the San Francisco-based firm is trying to tie up any loose ends before the summer break begins: Most bets point to the former. The firm wrapped up an add-on deal that had been three years in the making for its Byram Healthcare Centers portfolio company and turned around less than a week later to acquire its second seed platform Advanta BV, which will be run separately from its existing Seminis seed company.

The addition of Choice Medical Supplies to Fox Paine’s Byram Healthcare Centers portfolio company gives the medical supply distributor a reach into the Northern California, Oregon and Washington markets. Byram, which was acquired by Fox Paine in 1999, is a medical supplies distributor, focusing on disposable products and services to patients in the home. The company specializes in providing products for the treatment of chronic conditions in four primary areas, including ostomy, diabetes, urology/incontinence and wound care.

“We identified this company early on in as a potential deal that could really expand Byram’s regional presence, and this transaction gives the company a true national footprint,” Wray Thorn, a director at Fox Paine, told Buyouts,

Fox Paine paid roughly $25 million to acquire Choice. Merrill Lynch Capital and Bank of America-two existing lenders to Byram-have been tapped to provide additional debt to support the transaction, and Golub Associates was brought in as well to contribute in the financing package. A $10 million revolving credit facility is included in the arrangement.

Choice is one of a number of add-on deals Byram has made since Fox Paine invested in the business. The firm, anticipating additional acquisitions, acquired Byram without taking on any new debt, outside of a $30 million revolving credit facility. The firm has invested a total of $21 million so far in the platform.

Through the buy-and-build strategy, Byram’s revenue has grown more than 260%, expanding from $29 million in 1998, the year prior to Fox Paine’s investment, to $105 million, including the acquisition of Choice. EBITDA has grown steadily as well, increasing from $2 million to $10 million during the same time period.

Supporting Byram’s growth, Fox Paine credits the focus on strengthening the company’s sales force and cultivating relationships with doctors and healthcare providers. Moreover, Thorn cited the aging of the population as a key demographic trend that has buoyed Byram’s market.

Going forward, Thorn could not give a timeline as to when Fox Paine sees itself realizing an exit. The investment in Byram is out of the firm’s Fox Paine Capital LP fund, which is fully invested. The firm is now investing out of its $1 billion Fox Paine Capital Fund II LP, raised in 2000.

Cultivating the Portfolio

Fox Paine followed up its purchase of Choice with the acquisition of Advanta BV, pairing itself with Swiss agrochemicals outfit Syngenta International in the EURO400 million ($475 million) deal. That transaction is expected to close in the third quarter.

While the Fox Paine/Syngenta tandem acquired the business as a whole, the partners intend to divide the company in half, with Fox Paine taking over the European field crop business of Advanta and Syngenta walking away with a 90% share in its North American corn and soybean business. Fox Paine will pay EURO161 million for the unit, plus a 10% stake in the North American division, with Syngenta covering the balance of the EURO400 million price tag.

This is not Fox Paine’s first play in the seed business. The firm last year took Seminis private in a $650 million transaction, and its experience with that company paid dividends for this latest purchase. Fox Paine President Dexter Paine cited that the acquisition of Advanta “complements” the Seminis deal and added that the firm’s “experience in the seed industry” should benefit Advanta in the years ahead.

However, the firm does not intend to combine the businesses, as it reportedly does not see any synergies from a potential combination the businesses.