Gryphon Investors has held a final closing of Gryphon Mezzanine Partners II LP at its hard cap with $300 million of capital commitments. The new fund was oversubscribed and closed above its $225 million target with commitments from both new and existing limited partners.
The new mezzanine fund will participate on a minority basis in the junior debt financings of Gryphon portfolio companies, in all cases led by independent third-party lenders. This is Gryphon’s second junior debt fund and follows Gryphon Mezzanine Partners LP which closed in August 2017 at its hard cap of $105 million.
Gryphon makes leveraged acquisitions and growth investments in middle-market companies. The firm invests from $100 million to $300 million of capital in companies with sales ranging from $100 million to $500 million and EBITDA of up to $50 million. Sectors of interest include business services, consumer products and services, healthcare, industrial growth, and software.
“Our mezzanine strategy was initiated to satisfy the demand of a number of the firm’s limited partners seeking attractive risk-adjusted yields in the junior debt securities of Gryphon portfolio companies,” said Gryphon founder and CEO David Andrews. “We viewed this as an opportunity to add a complementary strategy to our primary strategy of control equity investing. We are pleased that the fund has been well-received, both by existing investors and investors not previously invested in Gryphon funds. As always, we very much appreciate their enthusiastic support.”
In April 2019, the firm held a final closing of Gryphon Partners V LP at its hard cap of $2.1 billion. This fund now includes eight portfolio companies and is approximately 80% committed.
- Heartland Veterinary Partners, a Chicago-based veterinary support organization with nearly 100 veterinary practices across the Mid-American and Southern markets, acquired in December 2019;
- Mechanix Wear, a Valencia, California-based designer and manufacturer of work gloves and personal protective equipment, acquired in October 2019;
- LEARN Behavioral, a Baltimore, Maryland-based provider of behavioral health treatment services for children with autism and other special needs, acquired in March 2019;
- Milani Cosmetics, a Vernon, California-based “masstige” beauty company that markets its face, lip and eye products under the Milani and Jordana brands, acquired in June 2018. Masstige is a marketing term and is a portmanteau of the words mass and prestige and has been described as “prestige for the masses”;
- RegEd, a Morrisville, North Carolina-based SaaS provider of governance, risk, and compliance services to the financial sector, acquired in December 2018;
- RoC Skincare, a New York-based anti-wrinkle and anti-aging skincare brand, acquired in December 2018;
- Shermco Industries, an Irving, Texas-based provider of testing, maintenance, and repair services for electrical infrastructure, acquired in June 2018;
- Transportation Insight, a Hickory, North Carolina-based provider of non-asset logistics and freight brokerage services, acquired in August 2018.
Gryphon Investors was founded in 1997 and is headquartered in San Francisco.
© 2019 Private Equity Professional | December 17, 2019