Investor returns
When Adam Duggins mulled the idea of a private-equity firm, he envisioned places like Raleigh, Charlotte or Richmond, Va. But as he weighed the options, he concluded the logical spot was closer to home. A Greensboro native, Duggins played basketball at Walter Hines Page High School, followed by three years at the College of William & Mary in Williamsburg, Va. He earned an MBA in 2008 from the University of Virginia, then spent five years advising private-equity clients at Boston-based Bain & Co. In August 2013, he and UVA classmate Rick Ramsey opened New Page Capital, which announced its first investment in February, acquiring Sophia-based fabricator Engineered Steel Products for an undisclosed amount. Ramsey, whose background includes working for Washington, D.C.-based Danaher Corp., is Engineered Steel’s president.
While it’s not known as a private-equity hub, the Triad is home to BB&T Capital Partners and Salem Investment Partners, which has made more than a dozen investments since 2012. Both are based in Winston-Salem. But Duggins sees a niche in backing successful companies with revenues of $5 million to $35 million; turnarounds aren’t part of their plan. The Triad is promising because many aging business owners are grappling with succession planning, Duggins says. Other private-equity firms in the region have different focuses or a wider geographic net. “Frankly, it is less competitive. There just aren’t as many young professionals here, and we’re hoping to help change that,” says Duggins, who is surely the tallest guy in North Carolina finance at 7 feet.
The group has six private investors, including Duggins and Ramsey. They opted not to raise an initial fund, which usually attracts a larger number of investors. “Funds are inherently impatient, and I knew we needed to be patient,” Duggins says. The company evaluated more than 100 deals before settling on Engineered Steel, a 25-year-old company in Randolph County with about $15 million in revenue last year. New Page should benefit from Duggins’ upbringing around the legal world — his father, Jim, helped found the 30-attorney Tuggle Duggins law firm in Greensboro. “It helps and hurts. With lawyers, lawyers are always worried about what could happen,” he says. “As an entrepreneur, I have to squash that part of my upbringing a little bit and take a risk.”
WINSTON-SALEM — Hanesbrands will acquire Spartanburg, S.C.-based Knights Apparel in an all-cash deal valued at about $200 million. Knights sells licensed logo apparel representing 400 colleges and universities and expects sales of about $180 million in 2015. Based here, Hanesbrands sells T-shirts, underwear and activewear under brands including Champion, Playtex and Wonderbra. The deal is expected to close in the second quarter.
WINSTON-SALEM — Reynolds American subsidiary R.J. Reynolds Tobacco agreed to pay $42.5 million to settle federal Engle cases pending or that haven’t gone to trial in Florida courts. The cases are part of a class-action lawsuit filed against large tobacco companies in 1994. Richmond-based Philip Morris USA also will pay $42.5 million, and Greensboro-based Lorillard will pay $15 million to resolve the matter. The agreement, which covers more than 400 cases, does not include thousands of cases filed at the state level in Florida.
GREENSBORO — Lorillard named David Taylor CEO of ITG Brands, the Imperial Tobacco subsidiary to be created when Reynolds American completes its $27 billion acquisition of Lorillard. United Kingdom-based Imperial Tobacco will acquire Lorillard’s blu eCigs brand and additional brands from Winston-Salem-based Reynolds for $7.1 billion when the deal closes. It’s being reviewed by federal regulators. Taylor has been Lorillard’s chief financial officer since 2008.
WINSTON-SALEM — Catalyst Biosciences will acquire Targacept in a reverse merger that will allow Catalyst to become a publicly traded company. Targacept was formed in 1997 as a subsidiary of R.J. Reynolds Tobacco and develops treatments for nervous-system and gastrointestinal disorders. It went public in 2006 and traded as high as $30 in 2011, but never delivered a successful product. San Francisco-based Catalyst develops treatments for conditions including hemophilia. Targacept shareholders will control 35% of the combined company’s shares.