MiddleGround Capital has closed its debut fund at a hard cap of $459.5 million. Archean Capital Partners is MiddleGround’s anchor investor. Credit Suisse’s private fund group was the placement agent. Based in Lexington, Kentucky, MiddleGround targets lower-middle market North American companies in the B2B industrial and specialty distribution sectors.
LEXINGTON, Ky.–(BUSINESS WIRE)–MiddleGround Capital (“MiddleGround”), a private equity firm that makes control investments in business-to-business (“B2B”) industrial and specialty distribution companies in the North American lower middle market, today announced the final close of Fund I, MiddleGround Capital I, LP.
MiddleGround Capital was formed in May of 2018 by John Stewart, Lauren Mulholland and Scot Duncan. John Stewart started his career at Toyota Motor Corporation as an hourly line worker at Toyota’s largest facility in the world, in Georgetown, KY. After an 18-year career and successive promotions, John made the transition into private equity in 2007. Over John’s initial 11 years in private equity, he built a following amongst investors and executives who recognized his unique contribution to the space; many of them supported his launch of MiddleGround.
Lauren Mulholland started her career in Bank of America’s investment banking division before moving over to Macquarie Capital, where she worked alongside the firm’s infrastructure funds and also helped to build out a newly established Private Capital Markets desk. She subsequently attended Columbia Business School and joined Monomoy Capital, where she was quickly promoted throughout the organization to a Director on the private equity transaction team. Lauren has worked with John and Scot for eight years.
Scot Duncan, like John, started his career at Toyota. While John started in Operations, Scot began his career in Engineering after earning a fellowship from Toyota at the University of Kentucky, where he earned both his undergraduate and graduate degrees. Scot worked side-by-side with John at Toyota and routinely served as John’s go-to successor as the two ascended the ranks of Toyota together. Scot left Toyota in 2008 to join John at Monomoy Capital, where he was the Director of the Operations team prior to leaving with John and Lauren to form MiddleGround.
“We knew right away there was something special about the MiddleGround team,” said Rob Lazaroff, a Partner at Archean Capital Partners (“Archean”), MiddleGround’s anchor investor. “We spoke to over forty references including former CEO’s, CFO’s and investors that previously worked with the team and we were impressed with the consistency of the level of respect they had for the MiddleGround team.”
“When we initially formed MiddleGround, we didn’t have any preconceived notions about whether or not to bring on an anchor investor,” said Mulholland. “Today, after closing our first fund in nine months, we can point to the continuous support of the Archean team as a key factor in our success.”
MiddleGround hired Credit Suisse’s Private Fund Group to serve as a placement agent for the fund.
“Credit Suisse and Archean were perfect partners for us as we embarked on this endeavor. In addition to all of the success we’ve had with the fundraise and the three deals we’ve completed along the way, we couldn’t be more proud and excited about the team we’ve built. Eight of us have previously worked together at multiple firms and this high level of continuity has given us a lot of confidence in our strategy. We have now built the team out to twenty one professionals with diverse backgrounds and expertise,” said Stewart. “We are striving to build something truly unique in the private equity space while making firm culture our top priority. We are humbled by the reception received from the people who have entrusted us with their careers.”
MiddleGround deployed over $150 Million of equity capital across three platform investments within its first 12 months. MiddleGround acquired Alco Manufacturing in July of 2018, Peterson Spring in April of 2019 and Steel Craft Corp in May of 2019.
“John, Lauren and Scot have built something special at MiddleGround Capital,” said Steve Crain, CEO of Peterson Spring. “Based on my prior experience working with the team, I jumped at the opportunity to work with them again.”
“We are really excited to have the fund closed so that we can
focus all of our energy on the portfolio,” said Duncan. “We look forward to the future and are honored by the investors who have invested in Fund I.”
About MiddleGround Capital
MiddleGround Capital is a private equity firm that makes control equity investments in lower middle market North American companies in the B2B industrial and specialty distribution sectors. The firm works with its portfolio companies to create value through a hands-on operational approach and partners with its management teams to support long-term growth strategies. Founded by John Stewart, Lauren Mulholland and Scot Duncan, the firm is based in Lexington, Kentucky with an office in New York City. For further information, please visit: www.middlegroundcapital.com