Seacoast Capital has held a final close on its third mezzanine fund, Seacoast Capital Partners III, L.P. (“Seacoast III”), with over $150 million of capital commitments. Seacoast has already closed on two investments totaling approximately $15 million of invested capital for its new fund.
“We’re very much looking forward to deploying Seacoast III,” said Seacoast Partner Jeff Holland. “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.”
In early December, Seacoast provided a combination of subordinated debt with warrants and convertible preferred stock to Fire Protection Service Corp. (dba Mountain Alarm) as part of a debt recapitalization. Mountain Alarm specializes in the design, installation, service and monitoring of security and fire alarm systems for the commercial and residential markets. The company has operations in Arizona, Colorado, Idaho, Utah and Washington. The company is based in Ogden, UT (www.mountainalarm.com).
In late December, Seacoast provided subordinated debt with warrants to FAPS to recapitalize existing debt and provide capital for growth. FAPS is a provider of automotive port processing services in the Port of New York and New Jersey. The company provides value-added import, export, domestic re-marshaling 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. The company was founded in 1956 as “Foreign Auto Preparation Service, Inc.” (FAPS) and is based in Newark, NJ (www.fapsinc.com).
In addition to the final close of Fund III, Seacoast has added Patrick Gengoux as an Associate in the firm’s San Francisco office. He will be responsible for new deal evaluation, analysis, financial modeling, due diligence and structuring as well as portfolio company monitoring. Mr. Gengoux has prior experience at Pacific Capital Bank, where he was a generalist working with distressed and underperforming middle market companies and at Signature Capital Advisers, a special situations private equity fund. He has an MBA from the Anderson School of Management at UCLA and a BA in Economics and International Relations from Claremont McKenna College.
Seacoast makes non-controlling subordinated debt and equity investments in privately-held lower middle market companies that have at least $10 million in revenue and $2 million of EBITDA. Seacoast typically provides between $3 million and $12 million of debt and equity capital for acquisitions, growth, shareholder buyouts, management buyouts, and leveraged recapitalizations to provide shareholder liquidity. The firm is industry agnostic but has a specific interest in the specialty manufacturing, value-added distribution, and business services sectors. Seacoast was founded in 1994 and has offices in Boston and San Francisco (www.seacoastcapital.com).
© 2013 PEPD • Private Equity’s Leading News Magazine • 2-28-13