Centerfield Capital Partners has held a final closing of its third fund, Centerfield Capital Partners III, with total commitments of approximately $171 million. Commitments to the new fund exceeded Centerfield’s $150 million target.
“Our firm provides capital to businesses generating $15 million to $100 million in revenue. Our goal is to invest approximately two-thirds of our capital in high coupon subordinated debt and one third in equity,” said Tom Hiatt, Founding Partner of the firm. “Typically, we invest between $4 million and $12 million in each transaction, although we have the capacity to arrange up to $30 million in financing with participation from our institutional limited partners.”
The new fund follows Centerfield’s second fund which closed in October 2008 with $116 million of committed capital. Like its predecessor funds, Centerfield III, which has already made eight investments, will invest a combination of subordinated debt and equity in middle market companies primarily in the Midwest that have EBITDAs from $3 million to $15 million. Sectors of interest include manufacturing; business services; consumer products and services; value-added distribution; specialty chemicals; specialty foods; infrastructure components; education services; and healthcare services.
“Regardless of fluctuations in the economic environment, we maintain a disciplined approach to investing,” said Scott Lutzke, Founding Partner. “We back companies with a history of growth and profitability which are led by strong management teams. Conservative valuations are also a critical element to our strategy. We are cautious in the amount of leverage we use to finance our portfolio companies, and believe this discipline has been instrumental to our success.”
Centerfield provides capital for change of control transactions, recapitalizations, acquisitions, and growth initiatives. “We pride ourselves on our flexibility to invest a combination of subordinated debt and equity that meets the needs of the sponsor,” said Matt Hook, Partner. “We work closely with funded and independent financial sponsors, and with management teams, who acquire control ownership positions in companies poised for growth. We have a broad range of industry interests, and a particular interest in firms engaged in manufacturing and business services.”
“Centerfield provides a logical alternative to a business owner or management team who may not want to sell a controlling interest in their company. Often, a business owner or management team may wish to raise capital for an acquisition, to take out a retiring partner, or to diversify wealth while maintaining operating control of a company and participating in another stage of growth,” said Faraz Abbasi, Partner. “Centerfield prefers to invest in situations where most of the individuals responsible for a company’s past successes will continue to stay involved to take the company to the next level.”
Centerfield is based in Indianapolis (www.centerfieldcapital.com).
© 2013 PEPD • Private Equity’s Leading News Magazine • 5-21-13