Wells Fargo Retail Finance and a Venture Capital Syndicate Acquire LP Innovations from Casual Male Retail Group
CANTON, Mass., May 15, 2006 - LP Innovations, the outsourced loss-prevention solutions provider, announces the completion of its acquisition by Wells Fargo Retail Finance (WFRF); a syndicate of venture capital groups; and members of LP Innovation's existing management team. The company has been purchased from Casual Male Retail Group (CMRG), which established LP Innovations to deliver loss-prevention services and strategies to specialty retail stores.
LP Innovations quickly developed a strong reputation for delivering highly effective shrink reduction programs as CMRG successfully marketed its services to specialty retailers nationwide. Today, the company is the nation's leading specialty retail loss-prevention services provider.
Commenting on the acquisition, Steven May, president and CEO of LP Innovations, highlighted the significant operating capital being made available by the acquiring group, which includes the Venture Capital Fund of New England, Velocity Equity Partners, LLC, and Inflection Point Ventures, as well as WFRF.
"Our relationship with CMRG allowed us to evolve to a stage where we can thrive independently of a parent company," noted May. "LP Innovations is now ideally placed to capitalize on its market-leading position, and take advantage of opportunities for more aggressive growth. And with the support and financial backing of Wells Fargo Retail Finance and our venture capital partners, we'll do exactly that."
Equity partner WFRF first discovered LP Innovations' potential through a number of shared customers, who all spoke in highly positive terms about the company's effective loss-prevention programs.
"It didn't take long for us to recognize the value in a relationship with Steven and his team," WFRF President and COO Bill Mayer said. "And when we heard that CMRG was looking to spin the company off, we began to explore options for turning that relationship into a more formal partnership."
Mayer went on to highlight the significant opportunities for joint growth that this deal delivers, both by cross-marketing each company's services to existing customer bases and by enabling the development of a more comprehensive service model for expansion into new industries and business areas.
According to Jack Stewart of the Venture Capital Fund of New England, LP Innovations' independence from CMRG is a key step in the company's growth.
"Retailers that recognized LP Innovations' expertise may well have been leery of paying a competitor's subsidiary to deliver services," Stewart said. "That barrier to growth is now removed, and has been replaced by Wells Fargo's complementary services, and our syndicate's growth capital and support."
And, as Steven May points out, even though LP Innovations was not central to the CMRG business strategy, the company will continue to provide outsourced loss-prevention services to what is North America's largest specialty retailer of big and tall men's apparel. "CMRG are, and always have been, big advocates of LPI's service offering," said May. "Having recently re-upped their contract with us, it's clear that attitude still remains."
Terms of the transaction were not disclosed by the involved parties.
About LP Innovations
LP Innovations, based in Canton, Mass., is a leading national provider of outsourced loss-prevention solutions for retailers. Services include in-store audits, investigations, employee training and awareness programs, mystery shops, point-of-sale exception based reporting (EBR) software, and data mining. LPI markets and deploys security equipment and central monitoring services through its subsidiary, Securex. For more information, visit www.lpinnovations.com or call 1-877-574-6682.
About Wells Fargo Retail Finance
Wells Fargo Retail Finance is a leading provider of flexible financing solutions for the specific needs of single- and multi-channel retailers throughout North America, ranging from high growth and acquisitions to general working capital, turnarounds, and debtor-in-possession (DIP). It is part of Wells Fargo & Company (NYSE: WFC), a diversified financial services company with $492 billion in assets. Wells Fargo Bank, N.A., is the only “AAA†credit-rated bank in the United States. For more information, visit Wells Fargo Retail Finance on the Internet at www.wfretail.com.
About The Venture Capital Fund of New England
The Venture Capital Fund of New England was organized in 1981 to provide equity capital and management assistance to emerging growth-oriented companies in the areas of industrial and information technology and direct marketing programs. VCFNE IV, an SBIC, currently has in excess of $70 million in investment capital.
About Velocity Equity Partners
Velocity Equity Partners is a private venture capital firm investing in early-stage growth companies primarily in the Northeast. Velocity's mission is to create value by identifying and supporting outstanding entrepreneurs with unique innovations and a powerful drive to build market-leading companies. Velocity's partners work with management teams to create premier companies in their field with the help of capital, expertise in building companies, and access to key networks. More information is available at www.velocityep.com.
About Inflection Point Ventures
From its three East Coast offices, IPV provides venture capital and business support for early-stage companies with the potential to generate rapid growth. Focused on businesses whose technology holds potential to fundamentally change markets, IPV seeks companies that introduce new, high-value-added products and services, upset the status quo, and capture market leadership. Inflection Point Ventures’ partners also provide strategic and tactical assistance to the companies they invest in, delivering business, as well as capital, support to fuel growth. Visit www.inflectpoint.com for more information.
About CMRG
CMRG, the largest retailer of big and tall men's apparel with retail operations throughout the United States, Canada, and London, England, operates 485 Casual Male Big & Tall and Casual Male XL stores; the Casual Male e-commerce site; Casual Male catalog business; 13 Casual Male at Sears-Canada stores; 24 Rochester Big & Tall stores; and a direct-to-consumer business. The Company is headquartered in Canton, Massachusetts, and its common stock is listed on the NASDAQ National Market under the symbol "CMRG."