Earlier this month, American Capital entered into agreements with a group of investors to establish American Capital Equity III, LP (ACE III), a new private equity fund with $1.1 billion of commitments focused on investing in companies in the lower middle market. Today, American capital has named the professionals who will lead the newly formed Lower Middle Market Buyout group.
The new group will be led by Sean Eagle, Eugene Krichevsky, David Steinglass and Justin DuFour, who have more than a decade of experience working together at American Capital and more than 50 years of collective experience managing and investing in lower middle market buyouts. The Lower Middle Market group has an initial staff of 10 investment professionals and is located in the company’s Bethesda, MD office.
“We are delighted to have Sean, Eugene, David, Justin and their entire team continue to devote their attention to lower middle market buyouts and deploy and manage our new ACE III fund,” said Malon Wilkus, American Capital Chairman and Chief Executive Officer. “They have broad industry experience, complementary skill sets and an excellent track record investing in lower middle market buyouts through several economic and credit cycles while at American Capital. The Lower Middle Market Buyout group complements our larger investment platform where we target middle and upper middle market buyout opportunities up to $750 million in size, as well as energy, infrastructure and special situations investment strategies.”
Prior to the closing of ACE III, which is expected in the next 90 days, American Capital will contribute all of its equity and equity-related investments in seven portfolio companies and an option to acquire American Capital’s equity investment in an additional portfolio company to ACE III. The aggregate agreed upon value of these investments, assuming the option is exercised, is approximately $640 million. An additional $445 million in capital commitments will be provided by an investor group and American Capital to allow the Lower Middle Market Buyout group to make new investments in companies with $5 million to $25 million of EBITDA that are active in technology services, healthcare products and services, and industrial markets.
The investor group, which was led by funds advised by Coller Capital, Goldman Sachs Asset Management and StepStone Group, also includes sovereign wealth funds, state retirement and pension systems, high net worth family offices, superannuation funds and foundations.
“We are excited by the opportunity to manage ACE III and deploy its $445 million of committed capital in lower middle market buyouts of companies with EBITDA of $5 to $25 million,” said Sean Eagle, Managing Director, Lower Middle Market Buyouts.
American Capital (NASDAQ: ACAS) is a publicly traded private equity firm and asset manager that originates, underwrites and manages investments of $10 million to $750 million in lower and middle market private equity, leveraged finance, real estate and structured products. Founded in 1986, American Capital has $93 billion in total assets under management and has eight offices in the US, Europe and Asia. The firm is headquartered in Bethesda (www.AmericanCapital.com).
The Lower Middle Market Buyout group will operate within American Capital’s asset management affiliate, American Capital Asset Management LLC, which creates, capitalizes and manages alternative investment funds across asset classes, including private equity, private finance, real estate and energy and infrastructure.
“We believe our collective experience investing in lower middle market companies, coupled with American Capital’s infrastructure and significant market coverage, differentiates us in this segment of the market and positions us well to deliver attractive returns for our investors,” said Eugene Krichevsky, Managing Director, Lower Middle Market Buyouts.
© 2014 PEPD • Private Equity’s Leading News Magazine • 5-19-14