The departure of a minority shareholder at Futurelogic snowballed into a liquidity event, clearing a path for ClearLight Partners LLC to take a controlling interest in the Glendale, Calif.-based supplier of thermal printers.
While Rob Healy, a partner at ClearLight, declined to comment on specific financial information, he said the target cost is “north of $50 million.”
“The departing employee owned 25% of the company,” he explained, “and he wanted a return on his investment.”
For the Futurelogic acquisition, ClearLight tapped into its inaugural $300 million fund, which closed in 1999. According to Healy, “More than two-thirds of the fund remains unspent.” Futurelogic management also contributed equity to the deal, but both sides declined to go into detail.
American Capital Strategies Ltd. served as the debt provider, investing $27 million in Futurelogic. ACS’s investment takes the shape of a revolving credit facility, senior term loan, senior subordinated debt with warrants, junior subordinated debt and common equity.
Houlihan Lokey Howard & Zukin served as financial advisor to Futurelogic and initiated, structured and negotiated the transaction on behalf of its client.
“We initiated a very broad auction process, focusing on financial groups, instead of strategic buyers,” said Lindsey Alley, a director in Houlihan Lokey’s Los Angeles office. “We brought in 10 financial groups for management presentations, but a combination of [deal] terms and personality gave ClearLight the win.” Healy declined to list competing bidders, but did say, “The list was full of household names from the private equity universe.”
Futurelogic was founded in 1983 by Mark Meyerhofer and develops small format embedded thermal printing assemblies uses in ATMs, consumer-operated gasoline dispensers, kiosks and gaming applications. Meyerhofer now serves as vice president of manufacturing and quality control at the company.