Vestar Capital To Hit Trail In 2010

Firm: Vestar Capital Partners

Fund: Vestar Capital Partners VI

Target: $3.5 billion

Legal Adviser: Kirkland & Ellis

Vestar Capital Partners expects to start raising its next fund, Vestar Capital Partners VI, later this year with a target of $3.50 billion. The New York-based shop, which invests in U.S. and European businesses valued between $250 million and $3 billion, last raised a $3.65 billion pool in 2005.

Expect the firm to continue deploying its capital in growth equity, management buyout and recapitalization transactions in such industries as consumer goods, consumer services, health care, media, communications and financial services.

The firm’s prior backers have included the Oregon Public Employees’ Retirement Fund, University of Michigan, University of Washington, Washington State Investment Board and West Midlands Pension Fund.

According to performance data current as of September 2009 from the Oregon Public Employees’ Retirement Fund, Vestar Capital Partners IV, raised in 1999, has generated an IRR of 13.5 percent and a total value multiple of 1.58x. The successor 2005 fund, listed as Vestar Capital Partner V-A by Oregon, has achieved an IRR of 7.4 percent an total value multiple of 1.17x.

A couple of recent developments at Vestar Capital should help it out on the fundraising trail. In January, portfolio company DynaVox Inc., a Pittsburgh-based maker of software and devices that assist people in overcoming speech, language or learning disabilities, filed for a $125 million IPO. The company reported about $91 million in revenue for the fiscal year ended July 3, 2009, and $1.66 million of net income. Vestar Capital made a growth equity investment in the company in 2004 via its fourth fund.

Last year, Pinnacle Foods Group (owned by The Blackstone Group) acquired Birds Eye Foods from a holding company controlled by Vestar Capital, Pro-Fac Cooperative, for $1.3 billion. Vestar Capital invested in the company through a recapitalization in 2002 using its fourth fund.