Three long-tenured partners of Linsalata Capital Partners have formed Watervale Equity Partners to make control investments in companies that have less than $6 million of EBITDA. Linsalata has historically invested in companies that have from $7 million to $50 million of EBITDA.
Mike Faremouth, Jim Guddy and Eric Bacon decided to form Watervale in conjunction with Linsalata’s normal succession and strategic review process. The spin out was very coordinated and thorough to ensure a smooth transition. “This is a very amicable process and I’m excited for the Watervale team as they move forward,” said Frank Linsalata, Founder and Chairman.
In July, Linsalata announced that it would begin raising its eighth fund, led by Senior Managing Director Gregg Taber, in the next few months with Frank Linsalata and Co-President Stephen Perry as Senior Advisers.
“We believe there is a unique opportunity to apply our experience in the lower middle market to smaller companies and help develop management teams, enhance sales growth and operations while establishing more effective systems and processes,” said Mike Faremouth, Co-Founder and President at Watervale.
Watervale will make control investments in North American-based companies with less than $50 million in enterprise value. Sectors of interest include manufacturing, distribution, consumer and industrial products, and engineered products and services. The new firm will be located in the Cleveland suburb of Beachwood, OH and will soon begin transaction sourcing and fundraising activities (www.watervalepartners.com).
“We have seen consistent deal flow in Watervale’s sweet spot that didn’t fit the acquisition criteria for Linsalata but was very interesting to us,” added Jim Guddy, who is a Co-Founder and Managing Director at Watervale.
Eric Bacon, who has spent 27 years at Linsalata, will also join Watervale as a Managing Director and Co-Founder. “As Mike and Jim described their vision for the firm, I grew very excited about the opportunity to join them and focus on smaller businesses which is where I began my career at Linsalata 27 years ago.”
Linsalata invests from $10 million to $50 million of equity in middle market companies that have $7 million to $50 million of EBITDA and at least $300 million in enterprise value. The firm is currently investing from its seventh fund with $427 million in committed equity capital. The firm was founded in 1984 and is based near Cleveland in Mayfield Heights, OH (www.linsalatacapital.com).
© 2017 Private Equity Professional | August 2, 2017