Searchlight Strikes Integra Deal with Goldman

Searchlight Capital, the PE firm launched by former KKR and Apollo Global executives, has clinched its third deal.

Today, Searchlight said it is investing in Integra Telecom. Goldman Sachs Special Situations Group is the seller, peHUB has learned. Financial terms were not announced.

Portland-based Integra provides advanced communication services such as office-to-office networking, data and voice for businesses in the Northwest. The transaction is expected to close in fourth quarter.

Searchlight, with the deal, will become Integra’s largest equity holder. “Integra’s dedicated employees, robust fiber network and diverse products allow it to provide high quality communications services to its customers,” said Eric Zinterhofer, co-founder of Searchlight.

Once a high-flying telecom, Integra was hit hard by the recent financial crisis and had to stave off bankruptcy. In 2009, Integra restructured its balance sheet and the company’s debt owners converted their holdings into equity. This process reportedly allowed Integra to cut its debt to $600 million from $1.3 billion. Goldman Sachs, Tennenbaum Capital Partners, and Farallon Capital Management became shareholders.

Tennenbaum and Farallon apparently didn’t sell their stakes to Searchlight.

Zinterhofer, the former co-head of media and telecom at Apollo, co-founded Searchlight in 2010. He was joined by Oliver Haarmann, an ex-KKR partner, and Erol Uzumeri, who led the PE business at the Ontario Teachers’ Pension Plan. Searchlight invests in several industries in North America and Europe including communications, media, consumer products and information & IT services. The PE firm typically invests from $50 million to $150 million equity per deal.

In April, Searchlight closed its first fund with more than $860 million in commitments. Integra is the third investment from the debut fund. Last December, Searchlight acquired a controlling stake in Hunter Boot. Searchlight, along with Liberty Global, acquired OneLink Communications in June in a $585.25 million deal.

Houlihan Lokey provided financial advice to the seller. Jefferies advised Searchlight.

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