I have been waiting for the right time to write this blog, hoping to title it, “Never have so few done so much for so many.”  I have held up this shout-out of praise for The Federal Reserve until I was sure we were truly beyond the precipice. I still worry when I read blogs “The Market Oracle” which continues to beat a rather negative drum.  Yet oddly, I am opting for optimism right now as I take great comfort that the Oracle of Omaha, Warren Buffett, has declared that the worst is behind us.

The Fed has saved us from what might have been truly calamitous times.  Its $436 billion in proffered loans to banks (as reported by the AP last week) — plus an additional $50 billion expansion of the Term Auction Facility program as well as a loosening of what constitutes eligible collateral -– is truly giving banks the time to rebuild their capital reserves.  The banks know the write-offs are not over.  They know that they must (as they have) seek new capital so they can brace themselves for further fallout, especially as we truly do sink into recession.

So if Buffet says, “The idea of financial panic — that has been pretty much taken care of,” then I can sigh in relief and at least hope, hope, hope it is so.  Buffet declares that the Fed has been the one to save the day and “prevented…the contagion where you’re going to have runs on investment banks.”  Remember, we cannot function, if we do not have a functioning financial system.  In bailing out Bear Stearns, the Fed averted a disaster in the making (given the enormity of the counterparty risk that so heavily relies on faith in a working system).

Life is not duplicate bridge.  We can’t play the hand both ways and compare outcomes.  I share with Warren Buffet much applause for our Fed governors, who, time will hopefully confirm, surely have played the winning hand.

Never have so few done so much for so many…indeed!

Summit Partners is proud to announce the closing of two new funds: Summit Partners Europe Private Equity Fund and Summit Partners Subordinated Debt Fund IV. They appreciate the commitment that they have received from both existing and new investors across North America, Europe, and Asia.

They can now invest nearly $6 billion from our family of equity and debt funds in profitable, growing companies across North America, Europe, and Asia. They are targeting equity commitments of $5 million to more than $500 million per transaction, with the ability to invest more than $800 million in combined equity and debt.

Since their founding in 1984, Summit Partners has raised 10 equity funds and four subordinated debt funds with combined capital of more than $11 billion.

They have invested in 300 growing companies. These companies have completed almost 125 public offerings and more than 110 strategic mergers and sales.

Their industry focus includes technology, business services, consumer products, energy, financial services, healthcare and life sciences, industrial products, and media and entertainment.

Sherbrooke Capital is proud to announce its investment in Adina for Life, a lifestyle brand focused on organic, fair trade coffee drinks and other healthful beverages.  Sherbrooke led a $6.6 million financing that included existing investors in the company and new investor, the Seraph Group.

Adina was founded in 2004 by Greg Steltenpohl, the founder of fresh juice pioneer Odwalla, and Magatte Wade-Marchand to develop a line of organic, exotic, fair trade-certified beverages with culturally inspired recipes from around the world.  Its ready-to-drink coffee beverages have met with tremendous interest from the market because of the great taste, exotic and authentic imagery, and a better-for-you nutritional profile.  Moreover, the brand resonates with consumers and retailers alike because of its strong commitment to fair trade practices and sustainable economic development.

As part of this financing, Adina’s operating team will be enhanced by beverage veteran Bruce Schroder, who joins the company as President and Chief Operating Officer.  Prior to joining Adina, Schroder ran the Starbucks/Pepsi Frappaccino joint venture and had senior operating experience with Peet’s Coffee.  In addition, Sherbrooke General Partners John Giannuzzi and John Bello will be joining the company’s Board of Directors.

An innovative part of the transaction was the commitment from the company and investors to fund the establishment of a charitable foundation that will further the sustainable development goals of Adina.  The foundation will be led by Adina co-founder, Magatte Wade-Marchand of Senegal.

Adina’s products are available nationwide in Whole Foods, as well as in leading regional retailers such as Wegmans, Cost Plus and Ralph’s.  The company has recently opened distribution with Costco warehouses in Northern California.

Riverside Partners, based in Boston, MA, is pleased to announce the sale the life sciences division of its portfolio company, Applied Precision, LLC to Telegraph Hill Partners and management.

Headquartered in Issaquah, WA, Applied Precision is a leading provider of live cell microscopy systems to life sciences research facilities worldwide.  Applied Precision’s Life Sciences business unit is anchored by its DeltaVision® product line focused on microscopy based imaging systems and its OEM products including the arrayWoRx® scanner platform and precision control solutions. Founded in 1986, Applied Precision is a five-time winner of the Deloitte & Touche Washington State High-Tech “Fast 50″ award.

Riverside Partners partnered with the Company’s founders to recapitalize Applied Precision in 2002.  “Riverside Partners was extremely helpful in accelerating the growth of the company, developing senior leadership, and broadening our network of contacts in the life sciences industry.  Working with Riverside, we were able to grow the company significantly resulting in this successful transaction,” said Ron Seubert, founder and CEO of Applied Precision.

“The management team at Applied Precision did a tremendous job building the Life Sciences business and we are thankful to them for making Applied Precision a successful investment for Riverside,” said David Belluck, a General Partner at Riverside.

ACG Boston welcomes new member Katherine Tsaioun, Ph.D. of Apredica:

Katherine Tsaioun, Ph.D. is President and co-founder of Apredica, a preclinical pharmaceutical contract research lab specializing in ADME Tox assessments of drug candidates early in the drug discovery process.

ACG Boston welcomes new member Michael Armstrong of The Monitor Group:

Mike is an MD in the strategy, finance and M&A practice of The Monitor Group, the global professional services firm.  This practice focuses on providing integrated corporate strategy and finance advice to mid-market companies.

ACG Boston welcomes new member Jeffrey Smith of NextBoston:

Based in Milan and Boston, the NextBoston partners function as CEOs, directors and Senior Advisors to mid-tier, international companies.  They work with shareholders to design, manage and execute cross border strategic growth projects, M&A initiatives and complex international turnarounds.

C.W. Downer & Co., a leading middle-market cross-border investment bank, is pleased to announce that Greencore Group PLC has acquired Home Made Brand Foods from PNC Equity Partners for $44 million. The acquisition, which closed on April 30, 2008, includes an additional contingent consideration of up to $10 million.

Greencore is a leading European manufacturer of convenience foods and malt products. The convenience foods division provides a wide range of chilled and frozen foods to retail, manufacturing & foodservice customers in the UK and Continental Europe. Greencore was a pioneer in the development of the UK chilled prepared foods market, and serves major retailers such as Tesco, Sainsbury’s and Somerfield.

Home Made Brand Foods (HMBF) manufactures upscale fresh prepared foods sold primarily to major retail grocery chains such as Stop & Shop, Hannaford and Publix. Products include fresh prepared meals and salads, sandwiches and quiche. HMBF was founded in 1956, and currently operates out of a 72,000 square foot facility located in Newburyport, MA.

The strategic acquisition of HMBF establishes Greencore’s North American presence and will accelerate HMBF’s existing growth plans. Fergal Leamy, development director of Greencore’s Convenience Foods division, will relocate to the US and become CEO of Greencore USA. Additional Greencore personnel will relocate to the US to support Mr. Leamy and will and be tasked with increasing the North American business.

“This acquisition comes at an interesting time in the evolution of the US retail food sector,” remarked Jeff Robards, Director with C.W. Downer & Co. “Supermarkets are being squeezed between low cost players such as Walmart as well as niche players such as Whole Foods. Greencore, with its distinctive operational capabilities and its long history of success in the UK, saw an opportunity to offer a point of differentiation to the US market. High quality chilled prepared foods provide market participants with a chance to retake some of the territory lost to competing channels. The acquisition of HMBF is a logical first step as Greencore takes advantage of this opportunity,” said Mr. Robards.

“Greencore’s entry into the North American chilled prepared foods market also comes at an opportune time for the company,” added Joe Downing, Managing Director with C.W. Downer & Co. “Greencore has been developing its North American strategy for the last two years and the current strength of the euro against the dollar certainly favors US acquisitions,” said Mr. Downing. “C.W. Downer excels at providing globally-oriented strategic advisory services. The reality is that the middle market is global, and our clients benefit from our global reach,” concluded Mr. Downing.

The C.W. Downer & Co. team responsible for the Greencore Group acquisition includes Joseph Downing (Managing Director), Jeffrey Robards (Director), Edward Raffoni (Vice President) and Jason Kustka (Analyst) from the firm’s Boston office as well as Philip Smith (Director) from the firm’s Dublin office.

Michael Milken, the former junk bond czar, has a lot to say about a recent castigation from super lawyer, Marty Lipton (founder of Wachtell, Lipton, the famous Wall Street deal firm). Lipton claimed recently that “The financial crisis we’re in today stems from the invention by Drexel Burnham Lambert of the junk bond.” This indirect swipe at Michael Milken, who invented the junk bond market, caused the former bond maestro to offer his own view of the mess today calling the real culprit not today’s version of junk bonds but rather “mispriced subprime mortgages.”

What amazes me about Milken’s defense is that he doesn’t see the real parallel between then and now. Each decade had innovative instruments which, in and of themselves, weren’t necessarily toxic. Junk bonds helped many non-investment grade companies grow. Similarly, the mortgage backed business has been around for years. It was only when each of these new instruments were distorted to produce fee after glorious fee with no real regard for the potential outcome (or in Milken’s case, no regard for the legality of it all) that the trillion dollar losses began. Let’s not forget that one of Milken’s niftier devices was to create his own set of junk bond buyers by cajoling/insisting that junk bond offerings be of a size larger than needed for a given company so that this excess cash could be invested in, guess what, other Drexel bonds. This was a very clever way of expanding the balance sheets of too many companies and the outcome was none too pretty.

Milken also rails against regulation. No surprise here as it was the regulators that brought his dizzying game to an end. He worries that regulators will muck it up this time. I am not so sure.

Is it not perhaps too naïve for us to hope that, left unregulated, underwriters and investors will learn at last from these latest mistakes and operate with more prudence in the future. Or, sadly do we have to save them (and ourselves) from succumbing again and again to the allure of easy profits.

ACG Boston welcomes the following new members for the month of April 2008:

Adolfo Chin
Ametek A&D

Mike Ferraro
Vitale, Caturano & Company

Gabriel Fried
Streambank LLC

Geoffrey Helliwell 

David Johns 

Mike Kennealy
Spectrum Equity Investors

Katherine Kovacs
IntraLinks, Inc.

Gardner Loring
Merrill Lynch

Valentina Midura
Trenwitih Securities, LLC

Jason Mironov
Spectrum Equity Investors

Ann Murray
Dextrys

Robb Osinski
Performance Indicator. LLC

Michael Pinette
CRG Partners

Alben Puhlick
Kanzaki Specialty Papers

Christopher Reece
EMA Partners Boston

Clyde Rettig
Strategic Imperatives

Stanley Rosenzweig
Kahn Group

Joel Shamon
Vitale, Caturano & Company

Jeffrey Templer
AgaMatrix, Inc

Katya Tsaioun
Apredica

Jim Verquist
StrategySwift Consulting Group

Raymond Walsh
Blackbridge Partners LLC

Philip Wax
Tatum LLC

David Wyand
Vitale, Caturano & Company

For more information on membership with ACG Boston, please email info@acgboston.org.