Another Spin-Out from Lariat

Three professionals from Lariat PartnersKevin Mitchell, Sam Simpson and Josh Sartisky – have left the firm to join RedCloud Capital. This is a return to roots for Mr. Mitchell as he founded RedCloud back in 2005 before leaving in 2013 to form Lariat.

RedCloud invests in companies with $3 million to $10 million of EBITDA and EBITDA margins of at least 10%. Sectors of interest include environmental services, food and agribusiness, value-added distribution, consumer products, and business services. Mr. Mitchell and Mr. Simpson are now managing directors of RedCloud and Mr. Sartisky is a vice president.

Redcloud, headquartered in Denver, is actively pursuing new platform investments. According to Mr. Mitchell, based on RedCloud’s successful track record and the recent successes of Lariat, RedCloud plans to raise a new institutional fund in the very near future.

Lariat was co-founded by Mr. Mitchell and Jay Coughlon in January 2013. Back in July 2019, Mr. Coughlon along with two other professionals of Lariat – Mac Hampden and Jason Urband – spun out of the firm to launched Denver-based Fruition Partners.

Lariat’s first fund, which held a final close in July 2014 with $118 million of capital, invested in six platform companies as follows:

  • Northern Seed, a Butte, MT-based distributor of seed and a provider of seed conditioning and treatment services (acquired in 2013);
  • Subsea Global Solutions, a Miami-based provider of underwater repair, maintenance and marine construction services (acquired in 2013 and sold to GenNx360 Capital Partners in 2018);
  • Ecoserv, an Abbeville, LA-based provider of offshore waste disposal and cleaning services (acquired in 2014);
  • Jacent, a Huntingdon Valley, PA-based distributor and merchandiser of non-edible, general merchandise impulse items (acquired in 2015 and sold in 2019 to Gridiron Capital);
  • Willowood USA, a Roseburg, OR-based maker of generic crop protection products (acquired in 2016 and sold in 2019 to Generic Crop Science); and
  • Offen Petroleum, a Commerce City, CO-based distributor of fuel and lubricants serving the Rocky Mountain region (acquired in 2017 and sold to Court Square Capital Partners in 2019).

After investing its first fund, Lariat has been divesting of the portfolio over the past 12 months. “A majority of our portfolio has now been sold and for a variety of reasons and despite Lariat’s success, I’ve decided to return to RedCloud Capital,” said Mr. Mitchell. “I am pleased to be joined by Sam and Josh, and we will be actively investing in new platforms like we’ve been doing over the last 15 years.”

© 2019 Private Equity Professional | November 1, 2019

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