Midwest Firm Grabs $100M Waud of Capital –

Waud Capital Partners, L.L.C. this month held a final closing for Waud Capital Partners, L.P., the firm’s debut buyout fund, that rounded up a total of $100 million in commitments.

According to David Posner, a Waud director who recently joined the firm, the final closing followed a series of rolling closes that occurred earlier this year. The Lake Forest, Ill.-based buyout firm set out in the third quarter to raise a $50 million fund, according to Mr. Posner, but subsequently raised the cap on the effort to $100 million in order to accommodate investor interest.

In addition to institutional L.P.s that included The Traveler’s Group, a subsidiary of Citigroup; Key Bank; University of Chicago Hospitals and Health Systems and Middlebury College, the fund also attracted interest from two buyout firm general partners: John Canning, president of Chicago-based Madison Dearborn Partners, and Bryan Cressey, a co-founder of Golder, Thoma, Cressey, Rauner, Inc. (GTCR) and a partner at Thoma Cressey Equity Partners. Both Messrs. Canning and Cressey are L.P.s in the fund and will serve on its advisory board with Hunter Reisner, director of private equity investments for Traveler’s Investment Group; Jennifer Steans, an executive vice president of Financial Investments Corp.; and Ron Waud, the father of Waud Capital’s founder, Reeve Waud, and a former executive with Illinois Tool Works.

According to Mr. Posner, the partners that signed on to the closing were interested in garnering deal flow from the lower end of the middle market. “Madison Dearborn sees small deals and wants a captive source to which it can refer these deals,” Mr. Posner said. In addition, the younger Mr. Waud worked at GTCR prior to launching his firm in 1993 and has had a long-standing relationship with Mr. Canning.

Terms of the fund are standard and include an 80%/20% carried interest split. Partners at Waud committed $10 million to the final closing, and Mr. Waud himself committed an additional $10 million to the fund’s total. The firm did not use a placement agent to raise the fund.

Fund Builds on Private Equity Past

Although this limited partnership marks the first buyout fund that Waud has raised, the firm is no stranger to private equity. Since founding the firm, Mr. Waud has completed more than 18 buyouts, raising capital on a deal-by-deal basis.

The firm targets transactions with values between $10 million and $100 million, Mr. Posner said, adding Waud Capital’s preferred investment range is between $40 million and $50 million. The firm generally invests between $3 million and $20 million in equity per deal.

Mr. Posner joined Waud Capital last month from DN Partners LLC, a Chicago-based private equity and mergers & acquisitions firm. In February, Peter Keehn also joined the firm as a principal. Prior to joining Waud Capital, Mr. Keehn was director of the private placement group at Northwestern Mutual Life Insurance Co.

This month the firm also will hire two additional associates, bringing the number of professionals to five.

With the closing, Waud Capital also has completed its first deal from the fund. The firm this month closed its acquisition of Parish Publications L.L.C., a specialty publisher that produces religious bulletins for churches and synagogues, for an undisclosed amount.