Boyne Capital, Grindstone make 10x on Fulcrum sale

Boyne Capital and Grindstone Partners made more than 10x their money on the sale of Fulcrum IT Services, sources familiar with the situation told Buyouts.

The firms, based in Miami and Alexandria, Virginia, respectively, on Feb. 26 sold Fulcrum Services for $193 million to Huntington Ingalls Industries.

Both firms had a return “well north of 10x,” the sources said.

Fulcrum is the Centreville, Virginia, government IT consultant focused on software development, data analytics, cybersecurity and advanced engineering. The company’s clients primarily are federal customers in defense, intelligence, education and healthcare.

Grindstone, familiar with Fulcrum’s management team, introduced the opportunity to Boyne in 2010.

The firms jointly invested in Fulcrum IT that year and owned a majority of the company in partnership with management.

The two firms grew the company organically and completed six add-ons over the nine-year hold, including acquisitions of Forgentum Inc, Corbin Co and PTR Group.

During their ownership, Fulcrum’s revenue grew to more than $160 million from $22 million and EBITDA to $17 million from $2 million, Fulcrum CEO Jeff Handy said.

Boyne invested in Fulcrum out of its Fund I, which closed in July 2017 on $126 million, exceeding its $100 million target.

The firm invests in the lower-middle market, targeting companies with revenue of less than $100 million and EBITDA of $2 million to $10 million.

Grindstone, led by Managing Partner Michael Bluestein, invests in profitable companies with high growth potential and revenue between $10 million and $100 million.

Susan Gabay, managing director in aerospace, defense and government practice at Houlihan Lokey, advised Fulcrum on the sale to Huntington Ingalls.

Action Item: Contact Boyne Capital at +1 305-856-9500.