PE HUB Wire Highlights, 9.7.18


Private Equity Editor Chris Witkowsky reflects at home. Photo by Wendy Witkowsky

Achieving growth without add-ons, Gores Group third SPAC set to price, targets $375 mln

Happy Friday!

How’d the week go? I’m waiting for a few of the big secondary deals that have been talked about in market, but haven’t yet come to fruition. High expectation for a busy last few months in secondaries as processes try to get in before year’s end (just like in the regular M&A market).

Here’s a question — where were you when Lehman failed? I was unemployed for a time that summer after a failed stint working for an ex-MLB player who was trying to form a media empire. And I was glued to CNBC as the situation unfolded. Somehow it didn’t click at the time that this was probably a really bad time to not have a job. I started a new job the week before Lehman collapsed. My first experience with private equity coverage was mostly writing about bankruptcies and LPs terrified of not being able to fill capital calls.

It’s hard to really remember that fear, looking back, that the financial system was not going to make it and we were all heading for bread lines. Hit me up with your memories of that paranoid time at [email protected].

Sweet tooth: I spoke to Loren Schlachet, head of Riverside Co.’s microcap strategy, this week on the group’s recent fund close. Riverside closed Microcap Fund V on its $1.2 billion hard cap. I’ll be writing up the full interview with Schlachet next week so stay tuned.

Schlachet talked about some of the sectors the group has focused on, including software and tech-enabled services, and branded consumer products.

Earlier this year, Riverside Co. sold Tate’s Bake Shop to Mondelez International for about $500 million. Riverside first invested in Tate’s in a 2014 recapitalization. Tate’s increased sales 4x over the past five years, according to a press release in June.

Riverside achieved its goals with Tate’s through organic growth, without making any add-ons, Schlachet told me. I don’t often hear about a PE investment where growth occurred solely internally and not through acquisitions.

“We ended up exceeding our investment case substantially. [Tate’s] was already a great company, there was real value there. We took the sales force from maybe seven people and took it to nearly 40 people, that’s what drove growth,” he said.

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