Littlejohn Spans Industries For Two Buyouts

Targets: Van Houtte Inc.; ITT Corp.’s switches business

Price: Van Houtte Inc.: C$600 million ($575.8 million); ITT Corp.’s switches: undisclosed

Sponsor: Littlejohn & Co.

Financial Advisor: CIBC World Markets (Van Houtte)

Littlejohn & Co. closed two deals late last month, acquiring Van Houtte Inc., a Canadian coffee roasting and distributing outfit, and the global switches business of engineering giant ITT Corp.

The mid-market LBO shop and turnaround specialist, based in Greenwich, Conn., paid C$600 million ($575.8 million) for Van Houtte. Shareholders received C$25 per share ($23.4), according to a Littlejohn statement.

Maxime Bernier, Canada’s Minister of Industry, approved the deal after Littlejohn shared with him its plans for the company’s expansion.

The Solidarity Fund QFL, a Quebec venture capital investor, kicked in $75 million for a minority stake in the deal, according to The Gazette, a Montreal newspaper.

Headquartered in Montreal, Van Houtte has three main divisions: its coffee bean roasting and marketing arm, a coffee service division consisting of retail stores and café bistros, and its manufacturing branch, which makes single-cup brewing equipment.

Founded in 1919, Van Houtte has more than 1,900 employees in Canada and the United States.

In a second deal, White Plains, N.Y.-based ITT Corp. sold its switches business to Littlejohn for an undisclosed sum. The carve-out will form a new stand-alone company called CoActive Technologies Inc.

Though Littlejohn’s spokesman declined to comment on the financials of the deal, it was reported that Credit Suisse and UBS syndicated a $25 million revolver, a $140 million first-lien term loan and a $55 million second-lien term loan. According to Credit Investment News, the switching business generated EBITDA of between $25 million and $30 million in 2006.

The company makes keypads, dome arrays, electromechanical switches and interface controls that it sells to mobile communications companies, industrial equipment manufacturers and the computer and automotive industries.

Littlejohn has a history of leading such transactions, having previously bought carve-outs from General Electric, Magnetek, Goodyear Tire & Rubber and General Dynamics. Earlier this year, the LBO shop spent roughly $500 million to acquire plastic tape maker Intertape Polymer Group Inc. And it sold Diamond Innovations, a diamond-based materials producer, to industrial manufacturer Sandvik for an undisclosed amount. Diamond Innovations was the former superabrasives division of General Electric.

Late in 2006, Littlejohn went back to its limited partners to raise a $200 million “top-off” vehicle to bolster its most recent fund, Littlejohn III, which closed in 2005 on $650 million.—J.P.