Quarton Partners’ Managing Director André Augier, commented, “Greg and Alex have been invaluable members of our team since the founding of Quarton Partners and have contributed significantly to the firm’s success. Their transaction expertise, hard work and dedication to superior client services are a testament to Quarton Partners’ culture. We are proud to recognize their contributions and are confident they will continue their strong success in their new roles.”

Mr. McGowan has spent over ten years advising clients on mergers, acquisitions, divestitures and capital raising initiatives. He has advised on over 75 transactions involving private equity firms, public companies and privately held businesses. Mr. McGowan has middle market transaction experience in a number of industries including industrial manufacturing, automotive and energy. Prior to joining Quarton Partners, Mr. McGowan served as a Vice President at W.Y. Campbell & Company where he led a variety of middle market investment banking engagements. He also was an investment banker in the Manufacturing Industry Group at Deloitte Corporate Finance LLC. Mr. McGowan earned a B.A. with honors in Finance from Michigan State University and a M.B.A. with high distinction from the University of Michigan, where he was a member of Beta Gamma Sigma. He is a licensed securities representative, holding his Series 7, 63 and 79 registrations.

Mr. Schroeder has executed numerous investment banking assignments, including sell-side and buy-side transactions, recapitalizations, restructurings and other strategic advisory assignments. Prior to Quarton Partners, Mr. Schroeder worked at W.Y. Campbell & Company advising clients on mergers and acquisitions, private placements and corporate restructurings. Mr. Schroeder graduated with honors from Michigan State University with a B.A. in Finance and is a licensed securities representative, holding his Series 63 and 79 registrations.

Quarton Partners, headquartered in Birmingham, Michigan, is a specialty investment banking firm, serving privately held and publicly traded companies, as well as private equity firms. Quarton Partners assists its clients with mergers and acquisitions, private capital raising, restructurings, valuations, and other financial advisory services. Its principals have successfully completed hundreds of engagements in a wide variety of industries across theU.S. and throughout the world.  Quarton Partners is a division of Leonard & Company, Michigan’s largest independent broker/dealer.

Prior to joining Quarton Partners, Mr. McGowan served as a Vice President at W.Y. Campbell & Company where he led a variety of middle market investment banking engagements. He also was an investment banker in the Manufacturing Industry Group at Deloitte Corporate Finance LLC.

Mr. McGowan earned a B.A. with honors in Finance from Michigan State University and a M.B.A. with high distinction from the University of Michigan, where he was a member of Beta Gamma Sigma. He is a licensed securities representative, holding his Series 7, 63 and 79 registrations.

“We are very pleased to join BASF’s Battery Materials business,” said Michael Fetcenko, President of Ovonic Battery Company. “BASF’s expertise in materials science and processing technology is a tremendous resource and these synergies will accelerate Ovonic’s development of advanced NiMH solutions for consumer, vehicle and smart grid energy storage.”

“Our acquisition of Ovonic provides BASF with an immediate leadership position in NiMH battery technology, as well as long-established commercial relationships with the world’s major battery manufacturers,” said Ralf Meixner, Senior Vice President of BASF’s Battery Materials business. “In addition, Ovonic’s proven research expertise provides a strong complement to the broad range of battery materials development activities we currently have underway within BASF.”

As part of BASF, Ovonic will be managed under BASF’s new global business unit “Battery Materials,” which was launched on January 1, 2012, to integrate the company’s current and future battery materials-related activities within a single operating unit managed by its Catalysts division, based in Iselin, N.J.

Ovonic Battery Company, Inc. is the inventor, developer and worldwide licensor of NiMH battery technology. Not only does Ovonic manufacture battery cathode materials for sale to licensees, but it continues to innovate advanced materials to expand markets for NiMH batteries in consumer, vehicle and stationary fields of use. Through its innovative R&D, Ovonic has established a proprietary position applicable to cathode materials for lithium-ion batteries and to next generation batteries such as very high energy MH-Air (Proton-ion) batteries.

Energy Conversion Devices, Inc.  is a global leader in building-integrated and rooftop photovoltaics. The company manufactures, sells and installs thin-film solar laminates that convert sunlight to clean, renewable energy using proprietary technology. ECD’s UNI-SOLAR® brand products are unique because of their flexibility, light weight, ease of installation, durability, and real-world efficiency. The company also designs, manufactures and installs rooftop photovoltaic systems, which enable customers to transform unused rooftop space into a value-generating asset. ECD’s Ovonic Materials Division includes the Ovonic Battery Company, the inventor and worldwide licensor of nickel-metal-hydride battery technology and the developer of proprietary advanced lithium-ion cathode materials, along with other emerging energy storage technologies. ECD’s Ovonyx joint venture is the inventor and worldwide licensor of phase change memory (PCM) technology.

BASF is the world’s leading chemical company: The Chemical Company. Its portfolio ranges from chemicals, plastics, performance products, and agricultural products to oil and gas. As a reliable partner, BASF creates chemistry to help its customers in virtually all industries to be more successful. With its high-value products and intelligent solutions, BASF plays an important role in finding answers to global challenges, such as climate protection, energy efficiency, nutrition and mobility.

Quarton Partners headquartered in Birmingham, Michigan, is a specialty investment banking firm, serving privately held and publicly traded companies, as well as private equity firms. Quarton Partners assists its clients with mergers and acquisitions, private capital raising, restructurings, valuations, and other financial advisory services. Its principals have successfully completed hundreds of engagements in a wide variety of industries across theU.S. and throughout the world.  Quarton Partners is a division of Leonard & Company,Michigan’s largest independent broker/dealer.

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Middle market M&A activity continued to plod along at a modest pace in Q4 ‘11. As anticipated, Q4 ’11 middle market transaction volume declined 11.6% quarter-over-quarter. However, for the full-year 2011, middle market transaction volume increased 25.6% from the previous year. The M&A market has been negatively impacted by the uncertainty in the global economy that peaked in the beginning of the third quarter. This uncertainty caused buyers and sellers to increasingly sit on the sidelines, which impacted deal volumes during the second half of 2011. However, the lack of volume didn’t impact valuations as middle market transaction multiples increased 3.9% in Q4 ’11 from the previous quarter. Valuations remain robust as access to debt is abundant and purchasers are aggressively targeting quality companies in the market with stable historical performances and transparent backlogs. Uncertainty remains in the global economy, but several positive factors point to pent-up demand for M&A activity. Strategic buyers are flush with cash and the private equity community is poised to be active on both the buy- and sell-side. These market dynamics, combined with “baby boomer” private business owners with no succession plan, could lead to a white-hot M&A market if the economy shifts into drive.

Strong Year for Middle Market Lending

According to S&P, middle market loan volume for leveraged buyouts increased from $3.1 billion in 2010 to $5.0 billion in 2011, representing a healthy 61.6% year-over-year growth rate. Total middle market loan volume increased to $14.4 billion in 2011, or a 26.6% increase from 2010. The Q4 ’11 loan volume, down 41.1% from Q3 ’11, represents the third consecutive quarter-over-quarter decline. This decline is primarily attributable to the increase in middle market debt costs during the second half of 2011, which negatively impacted demand for debt refinancing. Total leverage/EBITDA in middle market LBO transactions increased from 4.6x in Q3 ’11 to 4.8x in Q4 ’11. The junior debt market continues to face competitive pressures as more and more business development companies enter the market. As a result, subordinated debt costs continue to decline and total leverage metrics remain robust. As senior debt/EBITDA levels decreased from 4.1x in Q3 ’11 to 3.7x in Q4 ’11, subordinated debt levels filled the gap, increasing from 0.5x to 1.1x over the same period.

Q4 Performance Points to Strong Outlook for 2012

Real gross domestic product accelerated at its fastest pace in a year and a half, growing 2.8% in the fourth quarter, and nonfarm payroll increased for the 15^th consecutive period, bringing unemployment down to 8.5%. The number of housing starts, permits issued and completions in December have all increased compared to one year ago, signaling a potential recovery in the housing market for the coming year. Despite encouraging GDP and employment news, the economy remains volatile due the uncertainty surrounding the European sovereign debt crisis.

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Sargent Quality Tools is a niche provider of specialty hand tools serving the North American market. The Company’s product offering consists of professional-grade hand tools for securing system components on cross-linked polyethylene plastic pipe in the plumbing industry, prepping and terminating cable used in the cable TV industry and the crimping of wire utilized in electrical, electronic and telecommunication applications. The Company’s products are sold to original equipment manufacturers and to wholesale distributors. Sargent is headquartered in Branford, Connecticut.

Buckingham Capital Partners is a New York-based private investment firm that acquires control of middle market companies with operations based in North America. Buckingham’s principals have worked together for more than 17 years and have demonstrated an exceptional investment track record. The team brings a broad and complementary array of transactional, legal, financial, and operating skills through its investment professionals, operating partners and executive board members.

About Quarton Partners

Quarton Partners, headquartered in Birmingham, Michigan, is a specialty investment banking firm, serving privately held and publicly traded companies, as well as private equity firms. Quarton Partners assists its clients with mergers and acquisitions, private capital raising, restructurings, valuations, and other financial advisory services. Its principals have successfully completed hundreds of engagements in a wide variety of industries across the U.S. and throughout the world. Quarton Partners is a division of Leonard & Company, Michigan’s largest independent broker/dealer.

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Todd Gerch, Managing Director of Tennenbaum Capital Partners, commented on the sale, “We were thoroughly impressed by Quarton’s process. It was highly efficient, structured and resulted in a great outcome for Tennenbaum and the management team at Revere Packaging.  We are confident that Progress will be a great partner for the business.”

Revere Packaging, LLC, a subsidiary of Revere Industries, LLC, is a niche provider of single-use aluminum and plastic packaging solutions to the foodservice market. Revere Packaging markets a full line of round, square, rectangular and oblong containers used for baked goods, pizza, salads and other prepared foods. Revere Packaging is headquartered in Shelbyville, Kentucky.

Revere Industries, LLC, headquartered in Westfield, Indiana, is a holding company with manufacturing capabilities in plastic injection molding, powder metallurgy, aluminum casting and food service packaging.

Tennenbaum Capital Partners, LLC, headquartered in Santa Monica, California, is a leading multi-strategy alternative investment management firm. Since the firm’s founding in 1999, Tennenbaum has invested $10 billion in approximately 200 portfolio companies. Today, the firm has capital under management of approximately $5 billion.

Progress Equity Partners, Ltd., with offices in Dallas and Denver, is a private equity investment firm that acquires majority control of entrepreneurial, middle market service-based businesses. The principals of Progress Equity are relationship driven, long-term investors and have been partnering with owners and management to build industry leading companies since 1993.

About Quarton Partners

Quarton Partners, headquartered in Birmingham, Michigan, is a specialty investment banking firm, serving privately held and publicly traded companies, as well as private equity firms. Quarton Partners assists its clients with mergers and acquisitions, private capital raising, restructurings, valuations, and other financial advisory services. Its principals have successfully completed hundreds of engagements in a wide variety of industries across the U.S. and throughout the world. Quarton Partners is a division of Leonard & Company, Michigan’s largest independent broker/dealer.

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Middle market transaction volume declined 4.5% in Q3 ’11, a stark contrast to the robust quarter-over-quarter increase of 41.4% in Q2 ’11. Middle market enterprise value/EBITDA transaction multiples fell to 7.3x, a 1.6% decrease from the previous quarter. The negative market sentiment regarding the U.S. economy and the sovereign debt crisis in Europe have caused the pace of M&A activity to slow as more investors choose to sit on the sidelines to see how the latest economic events play out. However, M&A volume was still healthy in Q3 ’11 due to several positive factors, including the significant uninvested capital at private equity firms, strategic buyers focused on supplementing organic growth and competitive lending markets. We anticipate the M&A market to remain robust as strategic buyers flush with cash supplement stagnant organic growth by investing in quality add-on acquisitions. Strategic buyers, coupled with significant pent up demand from financial firms with record levels of “dry powder” and healthy lending markets in the U.S. should fuel strong activity in the M&A market despite the uncertainty in the economy. Our expectations are tempered due to the global economic uncertainty. We believe there is significant pent-up demand for M&A due to the record levels of cash currently on the sidelines as dealmakers wait cautiously for the economy to show signs of stabilization. The markets are at a crossroad and if the veil of economic uncertainty is lifted we anticipate M&A activity to accelerate in 2012.

Middle Market Lending Remains Strong

Middle market lending was down 40.3% from Q2 ’11 but up 28.7% compared the same period a year ago. The composition of loan volumes changed significantly in Q3 ’11 with leveraged buyouts accounting for 48.0% of total loan volumes, compared to 24.0% in Q2 ’11. Loan volume associated with leveraged buyouts totaled $4.0 billion in Q1 to Q3 ’11, representing a 76.3% increase compared to Q1 to Q3 ’10. Total leverage/EBITDA in middle market LBO transactions increased from 4.4x in Q2 ’11 to 4.6x in Q3 ’11.  S&P reported that average equity contribution of middle market LBO loans was 40.1% of the total capital structure in Q3 ’11, compared to less than 42.0% in Q2 ’11. Due to competitive pressures in the lending market, we anticipate leverage multiples to remain attractive for companies who have demonstrated consistent financial performance.

Global Uncertainty Clouds Forecasts

Serious concerns regarding the stability of the U.S. and European economies have continued to cause volatility in the market. Despite slight gains in real gross domestic product, the U.S. economy remains anemic, with unemployment rates hovering at 9.0%. The consumer price index dropped in October thanks to reductions in energy costs. Consumer confidence increased slightly, but remains shaken due to a tough economic climate and a growing concern regarding the government’s economic policies. On a positive note, the weak housing market may be gaining momentum, as the number of building permits issued has increased compared to a year ago. Additionally, payroll employment has increased by an average of 125,000 per month over the last twelve months.

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