L Squared Capital Partners has sold its stake in Virtium to Court Square Capital Partners. No financial terms were disclosed. Based in Rancho Santa Margarita, California, Virtium is a provider of solutions provider of industrial-grade memory and storage solutions for OEMs.
Newport Beach, CA – L Squared Capital Partners (“L Squared”) has successfully sold its equity interests in Virtium (the “Company”) to Court Square Capital Partners (“Court Square”). The sale of Virtium represents the third exit for L Squared in the last twelve months. Founded in 1997 and based in Rancho Santa Margarita, CA, Virtium is a leading solutions provider of customized, ruggedized, and highly engineered industrial grade embedded solid state drive (“SSD”) and memory products. Virtium’s intelligent networked storage, SSD and memory solutions provide the robust performance, reliability and functionality needed in the most critical industrial IoT (“IIoT”) applications.
L Squared completed its investment in Virtium in July 2015 and saw organic revenue more than double and EBITDA nearly triple. This strong financial performance allowed the Company to complete two dividend recaps in November 2016 and March 2019 returning an amount greater than all invested capital. Since 2015, the Company made significant investments in its global sales organization, launched several new innovative products, and continued expanding software development and application engineering teams to support a solution-driven customer experience. Specifically, Virtium launched a value-added IIoT software suite to help capture the large market opportunity of network connected storage. Virtium’s IIoT software lowers cloud costs, shortens product deployment cycles, simplifies service and management and enhances security of IIoTgenerated data.
“We are very happy with our partnership with L Squared over the last four years, said Phu Hoang, co-founder, CEO, and Board Member of Virtium. The L Squared team supported our vision to grow the Company through both access to capital and strategic resources. Additionally, they helped us recruit top level management talent and assemble a highly productive Board of Directors. The Virtium team looks forward to continued growth with our new partners at Court Square.”
Virtium was L Squared’s second platform investment and third exit for the firm in the last twelve months.
“From our first meeting with Phu we understood that he was a unique and highly skilled leader. Phu and his business partner Chinh each have inspiring personal stories dating back to their humble roots in their native Vietnam and have proven to be outstanding business leaders. Both have overcome incredible obstacles at each phase of life on their way to founding Virtium and building it into the successful company it is today.” said Sean Barrette, partner at L Squared and Virtium Board Member. “Partnering with world class operators like Phu and Chinh proved to be a winning formula for all stakeholders. We look forward to watching the Company’s continued success and believe Court Square will be an excellent partner for Virtium,” said Barrette.
L Squared and the Company were advised on the transaction by Moelis & Company, Vedder Price P.C., and BDO USA, LLP.
Virtium is a leading solutions provider of industrial-grade memory and storage solutions for the world’s top OEMs. For nearly two decades, it has designed and built its products in the USA, fortified by a network of global sales and support locations. Virtium’s world-class technology and customer support result in better industrial embedded solutions for an interconnected world. For more information on Virtium, please visit www.virtium.com.
About L Squared Capital Partners
L Squared Capital Partners is an investment firm with offices in Newport Beach, CA, and Chicago, IL, that seeks to make long-term investments in leading growth companies that operate in targeted sectors: TechEnabled Services & Software, Industrial Technology & Services, and Education Technology. Our unique investor base of family offices enables us to focus on long-term value creation driven by revenue and earnings growth, not financial engineering or market timing. The principals of L Squared have worked together for over a decade and have over 60 years of combined experience investing in growing private companies. For additional information, please visit www.lsquaredcap.com.
About Court Square Capital Partners
Court Square is a middle market private equity firm with one of the most experienced investment teams in the industry. Since 1979, the team has completed over 225 investments, including several landmark transactions, and has developed numerous businesses into leaders in their respective markets. Court Square invests in companies that have compelling growth potential within the business services, general industrial, healthcare, and technology and telecommunications sectors. The firm has $6.2 billion of assets under management and is based in New York, N.Y. For more information on Court Square, please visit www.courtsquare.com.