Buyout (LBO, MBO, MBI) • Insurance

Spectrum Equity, JMI Equity and Prospect Capital Management Acquire Arrowhead General Insurance Agency

On January 1, 2006, private equity firm Spectrum Equity, private equity firm JMI Equity and business development company Prospect Capital Management acquired insurance company Arrowhead General Insurance Agency

Acquisition Context
  • This is Spectrum Equity’s 1st, JMI Equity’s 1st and Prospect Capital Management’s 1st transaction in the Insurance sector.
  • This is Spectrum Equity’s 21st, JMI Equity’s 27th and Prospect Capital Management’s 8th transaction in the United States.
  • This is Spectrum Equity’s 5th, JMI Equity’s 5th and Prospect Capital Management’s 3rd transaction in California.
Investment Fate
  • Arrowhead General Insurance Agency was sold to a publicly-traded strategic buyer in 2012 for 400M USD.

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M&A Deal Summary

Date January 1, 2006
Target Arrowhead General Insurance Agency
Sector Insurance
Buyer(s) Spectrum Equity
JMI Equity
Prospect Capital Management
Deal Type Buyout (LBO, MBO, MBI)

Target Company

Arrowhead General Insurance Agency

San Diego, California, United States
Arrowhead General Insurance Agency, Inc. is a national insurance program manager and one of the largest managing general agents in the property and casualty insurance industry.
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Buyers Overview 3

Buyer

Spectrum Equity

Boston, Massachusetts, United States

Investor Investor Investor Investor Investor


Category Private Equity Firm
Founded 1994
PE ASSETS 8.2B USD
Size Mega
Type Sector Focused
DESCRIPTION

Spectrum Equity Management L.P. is a private equity investor focused on service businesses. Spectrum specifically targets established businesses in the media, communications, IT, information, and business services industries. The Firm looks to commit $25 to $150 million of equity capital per transaction and focuses on opportunities throughout North America and Western Europe. Prospective transaction situations include leveraged buyouts, recapitalizations, acquisition financings, and secondary purchases. Spectrum Equity Investors was formed in 1994 and has offices in Boston, Massachusetts and Menlo Park, California.


Deal Context for Buyer #
Overall 23 of 103
Sector: Insurance 1 of 1
Type: Buyout (LBO, MBO, MBI) 9 of 15
State: California 5 of 20
Country: United States 21 of 90
Year: 2006 2 of 4
PREVIOUS DEAL
DATE TARGET DEAL TYPE VALUE
2006-01-01 Bug Music

Los Angeles, California, United States

Founded in 1975, Bug Music, Inc. is one of the world's leading independent music publishers. Headquartered in Los Angeles, with offices in Nashville, New York, Atlanta, London and Munich, Bug owns and/or manages approximately 250,000 copyrights. The company has built a strong reputation as the 'songwriter's' publisher by supporting copyrights of songwriters and publishers and providing personalized administrative and creative services.

Buy -
FOLLOWING DEAL
DATE TARGET DEAL TYPE VALUE
2006-06-12 Chartered Marketing Services

Arlington Heights, Illinois, United States

Chartered Marketing Services, Inc. is a provider of investments and group benefits solutions for commercial employer groups of all kinds, including bona fide fringe benefits offerings for Davis Bacon Act and Service Contract Act contractor employers.

Sell $50M
Buyer

JMI Equity

La Jolla, California, United States

Investor Investor Investor Investor Investor


Category Private Equity Firm
Founded 1992
PE ASSETS 7.5B USD
Size Mega
Type Sector Focused
DESCRIPTION

JMI Equity is a private equity firm focused on investments in software, internet, business service, and healthcare IT. Targeted businesses typically help automate and optimize business and information technology processes. The Firm will consider investments at all stages of development, including early-stage companies, self-funded businesses requiring growth capital, and later stage businesses in need of buyout or recapitalization funding. JMI looks to commit at least $25 million per transaction. JMI Equity was formed in 1992 and maintains offices in San Diego and Baltimore.


Deal Context for Buyer #
Overall 30 of 130
Sector: Insurance 1 of 1
Type: Buyout (LBO, MBO, MBI) 12 of 23
State: California 5 of 26
Country: United States 27 of 114
Year: 2006 1 of 11
PREVIOUS DEAL
DATE TARGET DEAL TYPE VALUE
2005-12-20 NEON Systems

Sugar Land, Texas, United States

NEON Systems, Inc. develops middleware solutions that provide remote access to relational and non-relational databases residing on mainframe and minicomputer and workstation platforms.

Sell $68M
FOLLOWING DEAL
DATE TARGET DEAL TYPE VALUE
2006-01-09 BindView Development

Houston, Texas, United States

BindView Development Corp. is a global provider of IT security compliance software.

Sell $209M
Buyer

Prospect Capital Management

New York, New York, United States

Investor Investor Investor Investor Investor


Category Business Development Company
Founded 1988
Size Middle-Market
Type Sector Agnostic
DESCRIPTION

Prospect Capital Corporation is a publicly traded mezzanine debt and private equity firm that primarily provides non-control financing to support growth, recapitalizations, acquisitions, and development. Prospect will selectively consider control acquisitions by providing multiple levels of the capital structure. Prospect was initially formed in 1988 and went public 2004. The Firm is based in New York City.


Deal Context for Buyer #
Overall 8 of 86
Sector: Insurance 1 of 1
Type: Buyout (LBO, MBO, MBI) 7 of 41
State: California 3 of 6
Country: United States 8 of 83
Year: 2006 2 of 12
PREVIOUS DEAL
DATE TARGET DEAL TYPE VALUE
2006-01-01 Glo Skin Beauty

Denver, Colorado, United States

Glo Skin Beauty is a developer, marketer and distributor of mineral-based cosmetics and high-end skincare serving dermatologists, cosmetic surgeons, licensed aestheticians, spas/salons and select specialty retailers. Company brands include glominerals, mineral fusion, glotherapeutics, and glospa. Glo Skin Beauty was founded in 2000 and is based in Denver, Colorado.

Buy -
FOLLOWING DEAL
DATE TARGET DEAL TYPE VALUE
2006-03-21 Impact Products

Toledo, Ohio, United States

Impact Products is a manufacturer and distributor of branded and private label commercial cleaning and maintenance accessories, safety & personal protection products (PPE) for use in the janitorial, foodservice, healthcare, industrial, school, hospitality, commercial office, and retail end markets. Impact offers a comprehensive and well-recognized brand portfolio, consisting of ProGuard, Malt, Layflat, DiversaMed, Foameeze, Naturelle, Eclipse, and Rest Assured.

Buy -