Sun Capital Partners can be a ray of sunshine for flourishing (or struggling) companies. The private investment firm specializes in leveraged buyouts and equity and debt investments. It also acquires interests in bankrupt or underperforming firms. After acquisition, Sun Capital provides operating advice and additional capital to its portfolio companies. It targets firms with $50 million to $5 billion in annual sales. It does not rule out any industry when considering investments, but is partial to specialty manufacturers, retailers, restaurants, and apparel, technology, telecommunications, and home furnishing companies. Sun Capital has some $8 billion of capital under management.
Sun Capital has invested in more than 300 companies since it was founded in 1995; its current portfolio consists of interests in more than 70 firms. Holdings include bath and kitchen products maker American Standard Brands, Hickory Farms, and retailers Pamida, ShopKo Stores, and Marsh Supermarkets. Sun Capital also has several restaurant chains within its portfolio. Among them are seafood chain Captain D's, Boston Market, Fazoli's, Garden Fresh, and Restaurants Unlimited.
In addition to the US, Sun Capital has offices in London, Frankfurt, Paris, Luxembourg, Shanghai, and Shenzhen. Affiliate Sun European Partners invests in companies throughout Europe, targeting firms with €30 million to €3 billion (between $44 million and $4.4 billion) in annual sales. The company expanded its holdings in the UK with the acquisitions of equipment rental outfit Hewden Stuart, contract manufacturer NextPharma Technologies, printing company Polestar, and women's wear retailer Irisa Group in 2010 and 2011. In 2012 Sun European Partners acquired plastics company ELIX Polymers and plastics packaging producer Kobusch-Sengewald. The European arm also picked up a couple of retailers that year, Bonmarché in the UK and Strauss in Germany.
Other recent transactions in the US include an investment in The SCOOTER Store and the purchase of frozen-food supplier Contessa Premium Foods as it exited bankruptcy. Sun Capital acquired vitamin and dietary supplement manufacturer CornerStone Research & Development in 2011. The following year Sun Capital acquired fluid power systems maker Certified Power and announced plans to buy the wireless phone business of Polycom. The deals mark a new trend for Sun Capital, which is focusing more on investing in technology.
Also in 2012 the company sold oil and wax company Sonneborn to One Equity Partners. Sun Capital also sold its pork processing firm Fearman's Pork to Sofina Foods.
The lousy economy and decreased consumer spending have impacted some of Sun Capital's holdings. In all, nearly a dozen of Sun Capital's current and former portfolio firms have filed for bankruptcy since the start of 2008. Friendly's filed for Chapter 11 bankruptcy protection in 2011, but emerged early the following year. Struggling with a heavy debt load, Real Mex filed for bankruptcy protection as well and emerged in 2012 under new ownership.
Sun Capital's former holding Berkline BenchCraft Holdings also filed for bankruptcy in 2011. Sun Capital had taken over the company and restructured operations. Berkline, which specialized in making seating for home theaters, struggled for years but ultimately fell victim to the economic downturn. After failing to find a buyer, Berkline liquidated its assets. – less