Seacoast Capital Managers has closed its third mezzanine fund, Seacoast Capital Partners III, L.P., with $150 million in commitments. The firm has offices in Boston and San Francisco.
Seacoast Capital Managers, LLC (“Seacoast”) announced today that it has held a final close on its third mezzanine fund, Seacoast Capital Partners III, L.P. (“Seacoast III”), with over $150MM of capital commitments. Seacoast, with offices in Boston, MA and San Francisco, CA, is an investment partnership that was founded in 1994 to make non-controlling subordinated debt and equity investments in privately-held lower middle market companies. Seacoast III is a registered Small Business Investment Company (“SBIC”), a program created by Congress in 1958 to help U.S.-based lower middle market businesses meet requirements for growth and working capital not available through banks or other private capital sources. As part of the SBIC program, Seacoast III will have access to over $100MM in debenture funding from the United States Small Business Administration.
“We’re very much looking forward to deploying Seacoast III” Seacoast Partner Jeff Holland noted, “the landscape for mezzanine capital in the lower middle market remains very attractive, and we’re seeing a lot of interesting opportunities. While a number of other private equity firms have come and gone in the lower middle market over the years, we’ve chosen to stick to what we’ve been doing for over 20 years – providing mezzanine and equity capital to support the management teams of smaller businesses in a historically underserved segment of the market.” Seacoast Partner Tom Gorman added, “We’re lucky to have a diverse base of Limited Partners in Seacoast III, which includes family offices, funds of funds, national and regional banks, and high net worth individuals who understand that the opportunity to drive attractive risk-adjusted returns in the lower middle-market is tremendous.”
In addition to the final close on Seacoast III, Seacoast announced the completion of the first two investments for Seacoast III, which totaled approximately $15MM of invested capital.
Fire Protection Service Corp. (d/b/a Mountain Alarm), based in Ogden, UT, specializes in the design, installation, service and monitoring of security and fire alarm systems for the commercial and residential markets. With operations in five states – Arizona, Colorado, Idaho, Utah and Washington – Mountain Alarm is one of the largest alarm companies in the Mountain West region, and among the top 50 largest alarm companies in the U.S. In early December, Seacoast provided a combination of subordinated debt with warrants and convertible preferred stock to Mountain Alarm as part of a debt recapitalization.
FAPS, Inc., based in Newark, NJ is the only non-OEM provider of automotive port processing services in the Port of New York and New Jersey. The company provides value-added import, export, domestic remarshaling and rail processing services to major domestic and foreign automotive OEMs. With a processing capacity of over 400,000 vehicles annually, FAPS is one of the largest automotive port processors in the U.S. In late December, Seacoast provided subordinated debt with warrants to FAPS to recapitalize existing debt and provide capital for growth.
In addition to its final close, Seacoast has added Patrick Gengoux as an Associate in the firm’s San Francisco office. Having recently received an MBA from the Anderson School of Management at the University of California Los Angeles where he received the J. Fred Weston Award for Academic Excellence in Finance, Patrick will be responsible for new deal evaluation, analysis, financial modeling, due diligence and structuring as well as portfolio company monitoring. Prior to UCLA, Patrick worked at Pacific Capital Bank, where he was a generalist working with distressed and underperforming middle market companies. He also worked with Signature Capital Advisers, a special situations private equity fund. Patrick received a B.A. in Economics and International Relations in 2001 from Claremont McKenna College.
Seacoast was founded in 1994 to make non-controlling subordinated debt and equity investments in privately-held lower middle market companies. Seacoast specializes in “sponsorless” transactions, preferring to deal directly with company owners or management teams, although it will selectively consider investments led by professional investor groups. Seacoast typically provides between $3MM and $12MM of debt and equity capital for acquisitions, growth, shareholder buyouts, management buyouts, and leveraged recapitalizations to provide shareholder liquidity. While industry agnostic, Seacoast broadly invests in the specialty manufacturing, value-added distribution, and business services sectors. Seacoast generally targets investments in companies with a minimum of $10MM in revenue and $2MM of EBITDA. With offices in Boston and San Francisco, Seacoast has the ability to invest in businesses across the U.S. – having invested over $245MM in over 20 states since 1994.