THL Closes New Automation Fund

Thomas H. Lee Partners (THL) has closed THL Automation Fund LP with $900 million of capital.

The new fund invests in partnership with the THL’s flagship funds in companies that provide automation products, software or services, or use technology to improve productivity in business processes. Specific targets within automation include software and artificial intelligence, robotics, additive manufacturing, and systems design and integration.

THL has broad experience in the automation sector. Since 2017, the firm and co-investors have acquired four platform companies and closed eight add-on transactions in the sector. THL’s current automation platform companies include Autostore, Material Handling Systems, Fortna and Phytech.

As many in private equity already know, companies across multiple end markets – distribution and logistics, e-commerce, manufacturing, healthcare, agriculture, food and beverage, and consumer products – are rapidly adopting automation to drive efficiency, accuracy and speed across business applications in order to counter persistent labor shortages, to accommodate heightened customer demands and to address increasingly complex supply chains.

“Automation is everywhere in the news now as a result of the pandemic, but the reality is that the return on investment from automation was already high for businesses that deployed automation pre-pandemic,” said Jim Carlisle, a managing director at THL and the head of the Automation Fund. “We started building our thesis, network and capability years ago because the fundamental drivers of adoption — labor pressures, business resiliency, efficiency gains, throughput improvements and more — were already top of mind for business leaders across sectors and the technology exists to solve those problems.”

THL was founded in 1974 and is one of the oldest private equity investment firms in the United States. Industries of interest include consumer and retail; healthcare; media and information services; and business and financial services.

“We created this new fund to invest in companies driving step-function change through automation and to support management teams in accelerating growth with both capital and with a 20-member integrated team of automation experts,” added Mr. Carlisle.

Since its founding, Boston-based THL has raised over $25 billion of equity capital, acquired over 140 portfolio companies and completed over 400 add-on acquisitions.

© 2020 Private Equity Professional | November 18, 2020

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