River Associates Investments has held a final closing of its sixth investment fund with $222 million in commitments, exceeding its initial target of $200 million and more than twice as large as the firm’s fifth fund which had $110 million in commitments.
River Associates received strong support from its existing investors, with almost all of them making a capital commitment to River VI. In addition, River VI attracted commitments from new investors including internationally recognized insurance companies, endowments, pension plans and private equity fund-of-funds. As they have in prior funds, the partners of River Associates made significant personal capital commitments to River VI.
River VI will continue River Associates’ (RAI) strategy of control buyouts of lower middle market companies. The firm generally targets investments in platform companies with $3 million to $10 million of EBITDA located in the U.S. or Canada. RAI has invested in companies located in 20 different states and two Canadian provinces. As to industry preference, the firm is generally industry agnostic but has specific interest in the manufacturing, distribution, industrial service, business service and select specialty retail sectors.
“We sincerely appreciate the support of our existing and new investors who see value in our time-tested track record and strategy”, said Mark Jones, Partner of RAI. “We are focused on continuing to differentiate ourselves with our longstanding tenure of supporting management teams of lower middle market companies. We have always believed that all of our investments are equally important since behind each investment are management co-investors and numerous employees who look to us as economic and strategic partners. The larger fund size will allow us to acquire platform companies at the top end of our $3 million to $10 million EBITDA range as well as effect numerous add-on acquisitions.”
Founded in 1989, River Associates has completed 71 investments, including platform and add-on opportunities. The firm has generated strong returns for its investors and portfolio company management teams, the latter of whom are often meaningful investors in their respective companies. The firm has focused on earnings growth over financial engineering to generate returns.
“We are pleased that we have already been able to invest almost $50 million of River VI capital prior to the final closing and we are excited to now solely focus on identifying new platforms as well as working to grow existing River VI portfolio companies,” said Mike Brookshire, Partner of RAI. “Our current platforms include such diverse companies as National Deli (deli meats), KK Precision (complex components for gas turbines), Omega Environmental Technologies (aftermarket automotive truck and off-road air conditioning parts) and Industrial Magnetics (permanent and electromagnets for work holding, lifting, fixturing, conveying and magnetic separation applications) and we hope to complete strategic add-ons for all of these businesses.”
Proskauer Rose served as fund counsel for River VI. LB Group acted as placement agent for certain limited partner interests.
River Associates Investments was founded in 1989. In addition to Mark Jones and Mike Brookshire, RAI partners include Jim Baker, Patten Pettway and Craig Baker. The firm is based in Chattanooga, TN with an additional office in Santa Fe, NM (www.riverassociatesllc.com).
