Live Deals: Investcorp Takes Jostens Private –

In a public-to-private transaction valued at approximately $950 million, Investcorp, with other investors, has agreed to acquire Jostens Inc., a marketer of commemorative school products and services.

Should the deal close, Jostens shareholders will receive $25.25 per share, giving the investment group, which also includes DB Capital Partners, approximately 98% of the company’s roughly 33.4 million outstanding shares. The remaining 2% of Jostens’ shares will constitute approximately 6% of the post-transaction equity, making the investor group a 94% owner in the company.

Approximately $100 million in debt financing will be provided by Deutsche Bank, Chase Securities, Goldman, Sachs & Co. and Warburg Dillon Read. The transaction is expected to close in the first quarter.

Charles Philippin, a member of Investcorp’s management committee, said his group will venture into the commemorative school products sector through Jostens for reasons that include its appeal to the growing teenager demographic. High school- and college-age populations are increasing as children of the “mini baby-boom” reach the appropriate ages, thus giving companies such as Jostens more potential customers.

Firms Chase Teen Market

Investcorp is not the only buyout firm making acquisitions based on the current abundance of teenagers in the U.S. Last month, New York buyout shop Castle Harlan purchased Taylor Publishing Co., a Dallas-based yearbook publisher, for approximately $93.48 million, citing “the growing market it serves” as the company’s greatest asset (see story p. 22).

Philippin said Jostens is the dominant player in the commemorative products marketplace, followed by Herff Jones, which is half the size of Jostens.

Investcorp will assist Jostens in a number of Internet initiatives, Philippin said, using technology to further the company’s growth. For example, in the future, students will be able to order Jostens’ products online, while customizing them to match their individual interests. Philippin said providing these services should increase the company’s buy rate by making the products more readily available to its customers.

Under terms of the transaction, Jostens would pay Investcorp $19.125 million, plus $5 million in expenses if the agreement is terminated under certain circumstances, including a decision by Jostens to accept another acquisition proposal.

Jostens is located in suburban Minneapolis. Its products include yearbooks, class rings, graduation supplies, school photography, awards and sports paraphernalia. Sales for the company totaled $769 million for the 12 months ended October 2.

Investcorp, which trades publicly on the Bahrain exchange, has headquarters in New York, London and Bahrain.

DB Capital is an affiliate of Deutsche Bank.