Los Angeles-based Platinum Equity has announced the closing of a leveraged buyout fund focused on acquiring businesses that can benefit from Platin
Los Angeles-based Platinum Equity has announced the closing of a leveraged buyout fund focused on acquiring businesses that can benefit from Platinum’s operational expertise and resources with capital commitments of USD2.75bn, substantially in excess of its original target.
Platinum launched fundraising for Platinum Equity Capital Partners II with a target of USD1.5bn in committed capital, but the firm says strong investor demand and a rising tide of deal opportunities compelled the firm to nearly double the fund’s size.
Citi acted as placement advisor and Simpson, Thacher & Bartlett acted as legal advisor for the private placement of the limited partnership interests in Platinum Equity Capital Partners II. Investors include public and private pension funds, financial institutions, university endowments and trusts in North America, Europe and Asia.
Platinum has committed to making a substantial co-investment that will increase the new fund’s available capital to well over USD3bn. Separately the firm continues to control a multi-billion-dollar asset base comprising its first fund and legacy investments.
“We are very pleased with the response from investors and appreciate their support,” says Platinum chairman and chief executive Tom Gores. “We hope to be just as successful with this new fund as we have been in the past, but this is no time for us to rest on our track record
“We need to remain smart and vigilant, and we intend to do so. We will continue to take good care of the assets our partners have entrusted us to invest on their behalf. Our hands-on approach to operations works especially well in the current economic climate. Our success in reacting to changing market conditions has always differentiated us.”
Platinum’s investment approach focuses on acquiring businesses that need operational support to realise their full potential and that can benefit from its in-house capabilities in transition, integration and operations. Since the firm was founded by Gores in 1995, Platinum has made nearly 100 acquisitions in the operational turnaround market involving firms with more than USD27.5bn in aggregate annual revenue.
“We presented a stellar track record that was among the best in the world and created strong demand from investors,” says Mark Barnhill, the Platinum principal responsible for capital-raising and investor relations.
“In this economy certain simple things resonate. Institutional investors are looking for a strong investment team with a differentiated strategy and a proven ability to create value under both good and adverse conditions. We’ve worked hard to deliver all of those things.”
Platinum’s current operations portfolio comprises 22 companies in markets including IT, telecommunications, logistics, chemical manufacturing, steel and metals services, industrial fastening systems and automotive products.
Platinum Equity Capital Partners II has already carried out several deals including a USD2bn public-to-private transaction for Ryerson, a North American metals service centre operator.
Other acquisitions include Covad Communications, a provider of voice and data communications products and services, 3B the Fibreglass Company, formerly Owens Corning’s composite materials manufacturing facilities in Battice, Belgium and Birkeland, Norway, and Maxim Crane, a crane equipment rental and services provider serving the non-residential construction market.
