Local private equity firm Evergreen Pacific Partners has raised $425 million, padding its war chest in anticipation of future acquisitions...
Local private equity firm Evergreen Pacific Partners has raised $425 million, padding its war chest in anticipation of future acquisitions of regional companies.
In recent years the Seattle-based firm has bought control of three Washington companies — Gene Juarez Salons & Spas, demolition firm Nuprecon and Haney Truck Line — and it’s looking for other consumer, manufacturing or distribution acquisitions.
The move comes amid troubled times for the private-equity sector, where players typically depend on borrowing large sums of money to buy companies in order to sell them later at a profit.
Roiling credit markets have made lenders reluctant. High-profile deals like the $17.9 billion private-equity takeover of San Antonio-based radio station operator Clear Channel — which closed on Wednesday — have been delayed for months or seen their value drop as buyers struggle to gather enough funds to meet their commitments.
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But Evergreen’s partners are not into borrowing billions; they say that the companies they invest in — traditional, regionally focused companies with an average value of $100 million — are still attractive to lenders.
“We still have good access to debt capital, particularly doing the types of deals we do,” said Evergreen managing partner Michael Nibarger.
In a typical deal, the firm uses its own money for 30 to 40 percent of the investment — what Nibarger described as investing in a “prudent fashion.”
The firm focuses on acquiring companies in manufacturing, distribution or consumer products, located in Western North America. It aims to keep these companies for five to seven years, with the objective of passing them on to other investors after seeing them grow.
“We like to double the size of the company,” said managing partner Tim Bernardez.
Besides its three in-state companies, the firm owns Finest City Broadcasting of San Diego, CST Environmental of Brea, Calif., and Western Broadband of Phoenix. It hasn’t sold or taken public any of its investments yet.
The new fund brings the total amount managed by the Seattle firm to $700 million. With its fresh cash infusion, Evergreen plans to acquire about eight new companies following its current strategy, and perhaps do other, follow-on investments to help these firms grow.
Several of these investments could be in the Pacific Northwest, a region bursting with entrepreneurs but limited by a dearth of private-equity players interested in midsize firms, said managing partner T.J. McGill.
The area’s many success stories also provide talented managers to help Evergreen’s investments grow.
“There’s a big pool of talent in the region, and that’s a big deal,” said McGill.
Investors in Evergreen’s new fund include the Washington State Investment Board, the Public School Employee Retirement System of Pennsylvania, Credit Suisse and The Guardian Life Insurance Co. of America. Most are returning investors.
Ángel González: 206-515-5644 or email@example.com