Berkshire Partners Invests in N.E.W. Customer Service Companies, Inc. Alongside Freeman Spogli and N.E.W. Management;
Represents Successful Exit for the Lee Putnam Ventures
August 08, 2006, Boston, MA - Berkshire Partners LLC today announced that they, along with Freeman Spogli & Co. and management of N.E.W. Customer Service Companies, Inc. ("NEW"), have made a major investment in
NEW to help accelerate and support the next stage of NEW's growth. NEW is the leading independent third-party provider of extended service contracts in the U.S. The transaction gives
NEW an enterprise value of approximately $1.21 billion. Other terms of the transaction were not disclosed.
NEW currently administers over 70 million active consumer extended service contracts that cover a wide range of products such as consumer electronics, home office equipment, appliances, sporting goods, lawn and garden equipment, furniture, power tools and jewelry products. The Company's programs enhance customer loyalty and generate over $2 billion in sales for major national retailers, manufacturers, utilities and financial services companies.
NEW also provides post-sale customer care through its eight call centers and network of over 25,000 independent service centers.
"NEW is led by an impressive management team, boasts a strong and loyal base of prominent retail clients, and is well positioned competitively," stated
Ross M. Jones, Managing Director of Berkshire Partners. "As the leading service plan administrator, they have continually reinvented this industry.
With this substantial investment, we can help NEW to further penetrate its current markets and reshape the industry once again as they pursue the
significant growth opportunities in adjacent markets."
"Berkshire Partners has a long history of investing in successful retail, consumer products and related business service companies. Their tremendous experience, knowledge and resources will contribute to the achievement of our long term growth strategies and will help to solidify our leadership position," stated
NEW's Chairman Fred Schaufeld.
"Due to our employees' commitment to providing excellent customer service to our clients and their customers,
NEW has enjoyed significant growth since its founding in 1983," stated Tony Nader,
NEW's CEO. "We are excited about NEW's future growth prospects and look forward to working closely with Berkshire Partners."
This transaction provides an opportunity for TH Lee Putnam Ventures to realize a return on their 2004 investment in NEW.
"NEW has been a tremendously successful investment for THLPV, and we think this is an appropriate time to realize the value of our investment," said Renny Smith, Managing Director of TH Lee Putnam Ventures.
"Fred Schaufeld and his management team have done a magnificent job in executing on their ambitious growth strategy. Since our initial investment two years ago, they have added several major new clients, substantially accelerated sales in existing accounts and have grown to over $2 billion in warranties sold by their retail clients."
Credit Suisse acted as the Company's financial advisor in the transaction and is managing the debt financing for the new ownership group, along with CIBC and Bank of America.
About N.E.W Customer Service Companies
N.E.W. Customer Service Companies Inc. (NEW
) is the nation's leading provider of extended service plans, buyer protection services and product support for businesses and consumers. With 23 years of experience,
provides exceptional post-sale consumer care for many of the nation's largest retailers, manufacturers, utilities and financial services firms, providing coverage last year to more than 70 million consumers. Through its commitment to customer care,
delivers ongoing revenue, unrivaled customer support, seamless service administration and the competitive edge companies need to succeed in a rapidly changing marketplace. This philosophy has positioned the company as the leader in the marketing and administration of extended service plans and other value-added buyer protection and information services.
is headquartered in Dulles, VA, employs more than 3,000 people and operates eight communication centers across the United States and the Dominican Republic. For more information, please visit
or call 1-800 WHAT'S NEW (1-800-942-8763).
About Berkshire Partners
Berkshire Partners has invested in mid-sized private companies for more than 20 years through seven investment funds with aggregate capital commitments of approximately $6.5 billion. Berkshire seeks companies with acquisition values between $200 million and $1.5 billion and in a given transaction makes equity investments of approximately $50 million to $400 million. Berkshire has developed specific industry experience in several areas, including retailing, consumer products, business services, manufacturing, transportation and communications. The firm's transactions have included acquisitions, growth equity investments, and turnarounds. Over the past two decades, Berkshire has been an investor in over 85 operating companies with more than $15 billion of acquisition value and combined revenues in excess of $20 billion. For additional information, visit
About Freeman Spogli & Co.
Freeman Spogli & Co. is a private investment firm dedicated exclusively to investing in and partnering with management in retail, direct marketing and distribution companies positioned for growth. Since its founding in 1983, Freeman Spogli has invested approximately $2.2 billion in 39 portfolio companies with aggregate transaction value of over $13 billion, and is currently making investments from FS Equity Partners V, L.P., a $1.0 billion fund. Freeman Spogli has offices in Los Angeles and
New York. For additional information, visit
About TH Lee Putnam Ventures
TH Lee Putnam Ventures is a global private equity firm with $1.1 billion of commitments under management. The firm is affiliated with Thomas H. Lee Partners and Putnam Investments, and has offices in
New York, Boston and London. TH Lee Putnam Ventures provides development capital primarily to later-stage growth companies whose success depends on the deployment and use of information technologies or the use of cross-border delivery. For additional information, visit