Gryphon Investors launches platform investment; Huron Capital likes enterprise software

Good morning, Hubsters. MK Flynn here with today’s Wire.

Platform investments are the theme of today’s newsletter.

Gryphon just announced a new platform this morning.

And we’ve got a Deep Dive on a recent platform from Huron Capital.

Finally, we’d love to hear from you on a wide range of topics this fall. Please see our contact info, below.

Temperature control
Gryphon Investors has launched Thermal Technology Distribution Solutions (TTDS), a platform for the distribution of industrial temperature management and related products.

TTDS has already completed its first acquisition in Big Chief, a distributor of electric process heating and temperature control products for the industrial market.

“The thermal technology industry is rich with opportunities for the right platform, and we believe TTDS will be a compelling home for many like-minded companies in the sector,” said Tim Bradley, managing director in the San Francisco PE firm’s Heritage Fund.

“Our history of using proactive sector initiatives to identify industry leaders in promising businesses has led us to a variety of successful investments, and we are excited about the opportunities we see for BC as a standout in a very fragmented market,” said Keith Stimson, deal partner and head of the Heritage Fund team. “We also expect to leverage insights gained from Gryphon’s experience in value-added distribution and manufacturing businesses, particularly through our portfolio companies Techmer PM, Pacur, Heritage Distribution Holdings, Vessco, and Vivify Specialty Ingredients.”

TTDS marks the fifth platform deal closed by Gryphon’s Heritage Fund, the firm’s small-cap fund strategy.

Recurring revenue
Enterprise software continues to attract private equity investors, who appreciate the recurring revenue and customer retention of the business model.

PE Hub has written a lot about dealmaking in the enterprise software sector, including Obey Martin Manayiti’s feature story on the topic earlier in the year.

Today, Rafael Canton takes a close look at Huron Capital Partners’ new platform investment, Enterprise Application Services, announced earlier in September.

“The market opportunity is large, fragmented and supported by long-term secular tailwinds,” Huron partner Tony Pulice, told Rafael.

“Enterprise applications were once designed around IT infrastructure, but are now being designed around business processes, or the ways people get work done,” Pulice said. “Applications serve as data repositories. Helping companies access the right data at the right time is a critical first step towards eventually leveraging emerging technologies, such as AI. Our organization will help companies navigate this increasingly complex journey.”

EAS is being created through Huron’s ExecFactor strategy, in which the firm underwrites an industry and partners with an executive to identify the market opportunity and set up a holding company.

For EAS, Huron last year teamed up with Gene Chao, who has worked with technology consulting companies, such as IBM and Unisys, as well as serving as chief growth officer at Amelia, a New York-based business that focuses on artificial intelligence and cognitive and autonomic products.

Chao’s “experience across well-known technology consultancies through emerging technology companies makes him an ideal leader for the platform,” Pulice said. “We look forward to pairing an executive like Gene with our sector-focused approach to drive successful outcomes for entrepreneurial CEOs, management teams and others with whom we will partner on the EAS platform.”

With EAS as the platform company, Huron and Chao are actively looking for add-on investments. “Add-ons for the EAS thesis will bring together various technology ecosystems and enable key emerging technologies such as generative AI, autonomous workflow capabilities and interoperability across industry-specific business environments,” Pulice explained.

What’s on your mind?
We’d love to hear from you, Dear Reader, about a wide array of topics this fall:

How’s your dealflow? Many PE folks predict deal activity will pick up in the fourth quarter. Are you seeing an uptick yet?

Are you encouraged by Softbank-backed Arm’s successful IPO last week? Is the IPO market reopening?

How concerned are you about the new SEC regulations? Will they affect your dealmaking?
Are the worker strikes going on in various industries, such as auto workers, screen writers and actors, affecting your portfolio, or your investment decisions?

Anything else PE deal-related you’d like to share with PE Hub readers?

For PE deals and dealmaking in North America, here’s how to reach the PE Hub team:

• Mary Kathleen (MK) Flynn, Editor-in-Chief: mk.flynn@pei.group
• Michael Schoeck, Senior Reporter: michael.s@pei.group
• Obey Martin Manayiti, Reporter: obey.m@pei.group
• Rafael Canton, Reporter: rafael.c@pei.group
• Iris Dorbian, Reporter: iris.d@pei.group

And if you’ve got news on PE deals involving targets, in Europe, here’s how to reach the PE Hub Europe team:

• Craig McGlashan, Editor: craig.m@pei.group
• Nina Lindholm, Reporter: nina.l@pei.group
• Irien Joseph, Assistant Reporter: irien.j@pei.group

On that note, I’ll sign off. Craig will be back with more tomorrow. Buyouts’ Chris Witkowsky will write to you on Wednesday. I’ll be back on Thursday, and Obey will cap off the week on Friday.

Happy dealmaking,

MK