JW Childs restructuring deal imminent

Market sources expect an agreement in coming weeks that would allow LPs in the firm’s 2002-vintage Fund III to gain liquidity.

Boston-based mid-market buyout firm JW Childs is nearing a restructuring deal for tail-end positions in its $1.75 billion Fund III, according to three sources familiar with the matter.

JW Childs engaged placement and advisory firm Park Hill to run the restructuring process in November last year. JW Childs and Park Hill declined to comment.

The ‘usual suspects’ –  secondaries firms and large limited partners – are said to be among those considering anchoring a deal that would allow the GP to remain intact.

Whether the GP intends to raise a Fund IV as part of any restructuring was unclear at press time; the firm reportedly shelved a planned fundraising in 2007.

Limited partners in Fund III include HarbourVest Partners, which recently led the Cognetas/Motion restructuring, as well as fellow fund of funds LGT Capital Partners and secondaries-focused Pomona Capital. Other investors include Cornell University, the University of Pittsburgh and US public pensions including the Kentucky Retirement System and Boston City Retirement System, according to PEI Research & Analytics.

HarbourVest, Cornell, LGT and Pomona did not immediately respond to requests for comment.

The 2002-vintage JW Childs fund invested in US mid-market companies including menswear retailer Joseph Abboud and marketing agency Advantage Sales & Marketing. The fund’s five remaining portfolio companies include juice brand Sunny Delight and specialty retailer Brookstone.

Fund III was producing a return of 1.4x as of 31 March last year, according to a report from Swiss firm Castle Private Equity.