O2 Closes Fund III

O2 Investment Partners has held a final closing of O2 Investment Partners Fund III LP with $270 million in capital commitments. O2’s new fund received strong support from numerous institutional investors.

“We appreciate the confidence that our investors continue to place in our team and strategy in light of the challenges that the world is currently facing, and we are also grateful for the ongoing support of the talented entrepreneurs and management teams who choose to partner with us,” said Todd Fink, the managing partner of O2.

Metric Point Capital was engaged as O2’s placement agent for this fundraise and Kirkland & Ellis provided legal services. “The O2 team plays an important role in the lower middle market, partnering with entrepreneurs and management teams to help execute their strategic visions and continued growth plans,” said James Weidner, a partner at Metric Point. “We are pleased to have assisted O2 in achieving its fundraising goals as the firm welcomed a diverse group of investors to the fund.”

“In our view, the timing of Fund III is excellent as we continue to see significant deal flow,” added Mr. Fink. “Fund III just closed its third platform investment and has a strong pipeline of new opportunities.”

Yesterday, O2 announced the acquisition of Flip Electronics, a Roswell, Georgia-based specialty distributor of electronic components to both manufacturers and end-users in the military, aerospace, telecommunications, healthcare, and industrial sectors. Flip’s products include capacitors, connectors, crystals oscillators, diodes, fans, LEDs, resistors, sensors, transformers, transistors and a wide range of additional electronic parts.

Flip specializes in end-of-life (EOL), obsolete, and hard-to-find components. Parts and components receive an EOL designation when a manufacturer has decided that a product has reached the end of its “useful lifespan” and it will no longer be marketing, sustaining and selling the product.Flip’s founder and CEO Jason Murphy, as well as other members of the company’s management team, partnered with O2 on this investment.

O2’s other Fund III platforms include SIB Fixed Cost Reduction, a South Carolina-based provider of cost reduction services including invoice analysis, vendor negotiation and cost monitoring for a variety of expense categories including telecom, utilities, and waste management.  SIB’s fees are contingent on the cost savings found for its clients. SIB was acquired by O2 in March 2020; and First Class Air Holdings, a distributor of more than 100,000 SKUs of new and overhauled aftermarket aircraft components and a provider of maintenance, repair, and overhaul services for cargo and structural airframe systems. Customers of First Class Air are primarily cargo airlines, ranging from large domestic and global cargo carriers to smaller regional cargo airlines, with a niche focus on the freighter market. First Class Air and its sister company Cargo Repair were acquired by O2 in January 2020.

O2 makes control investments in companies with enterprise values from $10 million to $100 million and EBITDA from $4 million to $15 million that are located anywhere in the US and Canada. Sectors of interest include business-to-business services, technology, and select niche industrial companies. O2 is based in the Detroit suburb of Bloomfield Hills and was founded in 2010.

© 2021 Private Equity Professional | January 14, 2021

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