Clarion Capital Partners has made an investment in Harris & Harris, a provider of accounts receivable management services.
Harris & Harris provides first-party and third-party debt collection, third party liability, and other complementary services through advanced onshore call-centers. The company, founded in 1968 by the late Samuel J. Harris, is based in Chicago and operates four additional satellite call centers in Detroit, Milwaukee, Toledo and Lansing.
In partnership with Clarion Capital, CEO Arnie Harris and COO David Harris will maintain meaningful ownership in the company and will continue in their current positions.
“When my father founded the business more than 50 years ago, he said that the road to success for a business is to focus on people, both at our clients and with our employees,” said Arnie Harris. “As we considered potential investors, our focus on people brought us to a partnership with Clarion which will allow us to continue the success we’ve demonstrated over the last 50 years. Clarion’s approach to partnership and its long-term focus aligns perfectly with the future we see for Harris & Harris.”
“Harris & Harris is a leader in its core government, healthcare, and utility markets, and has an exciting opportunity to grow organically within those segments,” said Jon Haas, a partner at Clarion. “Clients in those segments require a high standard from their accounts receivable management and business process outsourcing providers, and we believe Harris & Harris is unmatched in its integrity, client service, and performance.”
New York-based Clarion Capital makes control and minority equity investments of $15 million to $75 million in businesses with at least $7.5 million of EBITDA. Sectors of interest include business services; healthcare services; specialty financial services; consumer and retail; and media, entertainment and technology.
Clarion and Harris & Harris will seek add-on acquisitions to expand the company both geographically and into new products and services. “We have really enjoyed getting to know the Harris & Harris team over the last few months and are excited to work with the company to make its future even brighter than its impressive history,” said Eric Kogan, a partner at Clarion.
Financing for the transaction was provided by Midcap Financial and Greyrock Capital.
MidCap Financial was the Sole Lead Arranger, Sole Bookrunner and Administrative Agent of a senior secured credit facility to back the investment by Clarion in Harris & Harris. The MidCap transaction team was led by Managing Director Michael Min. MidCap Financial, in alliance with its investment manager Apollo Capital Management, is a middle market-focused, specialty finance firm that provides debt solutions of $10 million to $750 million to companies across all industries.
Greyrock Capital provides from $5 million to $35 million of subordinated debt and equity to lower middle-market companies that have revenues of at least $10 million and EBITDA of at least $3 million. Greyrock has offices in Berkeley, CA; Chicago, IL; and Wilton, CT.
Mesirow Financial was the financial advisor to Harris & Harris on this transaction.
© 2019 Private Equity Professional | November 12, 2019
