CenterGate Beats Target on Second Fund

CenterGate Beats Target on Second Fund

The Austin-headquartered firm invests in North America-based lower middle-market companies that have from $5 million to $30 million of EBITDA

CenterGate Capital has held a final and above target closing of CenterGate Capital Partners II LP (Fund II) with just over $375 million of capital.

Limited partners in Fund II include pension funds, endowments, foundations, family offices, asset management firms, and financial institutions.

Austin-based CenterGate invests from $10 million to $75 million in equity in North America-based lower middle-market companies that have from $5 million to $30 million of EBITDA. Sectors of interest include business services, manufacturing and consumer. Since its founding in 2014, CenterGate has completed 12 platform investments, 18 add-on acquisitions, and has grown to a team of over 20 people.

“We are grateful for our continued partnership with a supportive group of diverse institutional investors and are excited to welcome our new investors,” said Lewis Schoenwetter, a managing partner at CenterGate.

OpenGate’s current portfolio includes three companies acquired in 2022: Prisma Graphic, an Arizona-based provider of marketing services including commercial printing, data analytics-driven direct mail services, packaging, and brand management (August 2022); United Envelope, a New Jersey-based manufacturer and printer of envelopes used in financial services, non-profit, healthcare, and government markets (July 2022); and RC Rasmussen, a Washington-based rental services provider of marine infrastructure specialty equipment (June 2022).

Five earlier acquisitions still in the portfolio include Teeny Foods, an Oregon-based developer and contract manufacturer of frozen bakery snacks and handheld meals sold through the foodservice and retail grocery channels (September 2021); The Mulch and Soil Company, a Florida-based manufacturer and distributor of mulches, premium soils, decorative bark, and other ground cover products to lawn and garden retailers and commercial landscapers (May 2021); Soroc Technology, an Ontario-based provider of outsourced IT services (December 2020); Naumann Hobbs Material Handling, an Arizona-based seller and renter of material handling equipment (September 2019); and Mid-State Industrial Maintenance, a Florida-based provider of on-site and off-site industrial maintenance and services to customers in the chemical processing, phosphate mining, power generation, and building products industries (February 2019).

“We believe Fund II drew strong interest from investors as a result of our consistent investing approach, the quality of the CenterGate team, and our success in creating value,” added Tiffany Kosch, a managing partner of CenterGate. “With Fund II, we will continue our focus on control investments that transform lower middle market companies in North America.”

CenterGate’s earlier fund, CenterGate Capital Partners I LP, closed in December 2016 with an oversubscribed $350 million of capital commitments.

© 2023 Private Equity Professional | August 2, 2023

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