MidOcean alumni form new shop

Two former high-level executives from MidOcean Partners have formed their own shop, Broad Sky Partners, and have made two deals.

MidOcean founding Managing Directors Tyler Zachem and David Basto listed themselves as founding partners of Broad Sky as of December 2013, according to the firm’s Form ADV filing with the SEC. Broad Sky’s website lists Zachem as chief executive officer and founding partner and Basto as managing director and founding partner.

The firm announced its first deal in September, forming platform Apex Parks Group along with Edgewater Funds to acquire family entertainment centers from Palace Entertainment, according to a press release. MidOcean sold Palace Entertainment in 2007 for $330 million to Parques Reunidos, according to a press release.

Broad Sky appears to be working on a deal-by-deal basis. The Form ADV filing shows Broad Sky as the advisor to a private equity fund called MP Holdco LLC with a gross value of about $41.1 million. A Form D filing for MP Holdco LLC shows the vehicle raised $41.1 million from 21 investors and was established in 2014.

The MP Holdco filing lists Zachem and Basto as members of the board of managers of the issuer, and John Howe as CEO and president. Howe also is CEO of animal nutrition and care company MannaPro Products, which is listed as a Broad Sky portfolio company on the firm’s website. That seems to indicate the MP Holdco vehicle was raised specifically to invest in MannaPro Products, which could indicate Broad Sky is raising capital deal by deal.

A source familiar with the firm said Broad Sky is working deal-by-deal “for now.”

Zachem did not respond to an email seeking comment.

Broad Sky targets investments in media, communications and business services and consumer products and services, according to its website. The firm will invest between $25 million and $75 million in each platform company, the website said.

Other executives on the Broad Sky team include Principal John Overbay, former principal with Court Square Capital Partners, Principal James Shillito, former executive with Fenway Partners, and Vice President Heidi Vanhamme, former executive with Investcorp.

Zachem left MidOcean around the end of 2012, two sources said. It’s not clear when Basto left. Zachem had served on MidOcean’s management committee and was head of the media, communications and business services group. Basto was co-head of the firm’s consumer group, according to Broad Sky’s website.

At least two other executives have left MidOcean in recent years. Managing Director Robert Sharp left the firm sometime in early 2014, one source said. Scott O’Callaghan, a managing director with MidOcean Credit Partners, also departed, although it isn’t clear when.

MidOcean is led by CEO Ted Virtue and Chairman Steve Miller. The middle-market shop has six managing directors, four principals and/or vice presidents, and six associates, according to its website.

MidOcean Credit Partners is led by President Steven Shenfeld and has three managing directors, four principals and/or vice presidents, and six associates, according to its website.

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