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Platinum Equity
Founded 1995
Founder(s) Tom Gores, Chairman & CEO
Headquarters Flag of the United States.svg Beverly Hills, California
Key people David Anglin

Rob Archambault

John Diggins

Robert J. Joubran

Eva Kalawski, General Counsel and Secretary

Jacob Kotzubei

Johnny O. Lopez

Phillip Norment

Mary Ann Sigler, Chief Financial Officer

Brian Wall

Robert J. Wentworth
Industry Private Equity
Products Investments, private equity funds, leveraged buyouts
Employees 30,000
Website www.platinumequity.com

Platinum Equity is a private equity investment firm founded by Tom Gores in 1995. The firm focuses on leveraged buyout investments of established companies in the U.S. and Europe.

The firm has a diversified capital base that includes the assets of its portfolio companies, and capital commitments from institutional investors in the firm's private equity fund vehicles, Platinum Equity Capital Partners and Platinum Equity Capital Partners II. Institutional investors in the fund vehicles include a diverse cross section of public and private pension funds, insurance companies, endowments and family offices in North America, Europe and Japan.[1]

The firm’s first fund, Platinum Equity Capital Partners, was raised in 2004 and had a 62.5% net internal rate of return as of June 30, 2009.[2] This stellar track record played a role in the firm’s second fundraise, Platinum Equity Capital Partners II, which closed in September 2008 at a time of great uncertainty in the financial markets. For Platinum Equity Capital Partners II, the firm initially sought a $1.5 billion leveraged buyout fund and nearly doubled it by raising $2.75 billion.[3]

Platinum Equity is headquartered in Beverly Hills, California with regional offices in Boston, New York and London. Forbes magazine ranked it number 27 on its 2009 list of the largest private companies in the United States[4] and the Los Angeles Business Journal ranked it as number 1 on its 2008 list, L.A.’s 100 largest private companies.[5]

The firm has a diversified capital base that includes the assets of its portfolio companies, and capital commitments from institutional investors in the firm's private equity fund vehicles, Platinum Equity Capital Partners and Platinum Equity Capital Partners II.

Institutional investors in the fund vehicles include a diverse cross section of public and private pension funds, insurance companies, endowments and family offices in North America, Europe and Japan.

Contents

History and Notable Investments

Founding

Platinum Equity was founded in 1995 by Tom Gores. Platinum Equity’s first acquisition was LSI, a company that generated computer graphics to re-create accidents for courtroom testimony. Tom Gores purchased LSI for $200,000, then focused on servicing existing customers and returning the company to profitability.[6]

The Early Years

Over the next five years, between July 1996 and September 2001, Tom Gores' wholly owned fund (Platinum Equity, LLC) made 32 acquisitions with $226 million, and realized $940 million on those investments. These acquisitions included a call center (Foresight Software), networking gear (Racal Electronics), and voice and data service (Williams Communications).[7] BusinessWeek ranked Platinum Equity number 10 on its 1999 list of the country’s top 20 private IT organizations, based on 1998 revenues.[8] Throughout these early years, Tom Gores broke many private equity rules including specializing in the tech sector and using his own money as equity, and leveraging against it.[9]

During this same time period of acquisition growth, nine of the eleven current partners joined the firm. These partners include Johnny Lopez (1995), David Anglin (1996), Robert Joubran (1996), Phil Norment (1997) and Brian Wall (2000). Additionally, several partners joined through key acquisitions starting in 1999 with Robert Wentworth[10] during the acquisition of Alden Electronics’ operating assets.[11] Then through the acquisition of Pilot Software from Cognizant Corporation in 1997 [12]Rob Archambault, John Diggins and Eva Kalawski joined the firm.[13]

The Credit Crisis

In 2009 as most of the industry was sidelined by the financial crisis and recession, Platinum Equity acquired 14 companies in the first 11 months of 2009, eight of them full buyouts.[14] This acquisition activity put it among the most active private equity firms through 3Q 2009.[15]


Notable Investments

Information Technology – In October 2004, the firm completed the acquisition of CompuCom Systems, Inc. which was one of the largest public-to-private transactions in 2004.[16] Then, in December 2004 the company acquired General Electric’s IT Solutions division. The merger brought CompuCom to $1.7 billion in annual revenue and more than $500 million in services.[17] The business was sold to Court Square Capital Partners in 2007.[18]

Logistics and Distribution - In 2002, Platinum combined Health Care Products, a division of Royal Philips Electronics, and Diagnostic Imaging, a subsidiary of PSS World Medical into a single company called SourceOne Healthcare Technologies. Both companies were distributors of radiology products like film, chemicals and lead shields. Together, they had $1.3 billion in revenue, making SourceOne dominant in the very fragmented $11.5 billion marketplace in which it competed.[19] Merry X-Ray acquired SouceOne Healthcare Technologies from Platinum Equity in November 2005.[20]

Industrials – PNA Group, a metals processor, was acquired in May 2006 from TUI AG. At the time of acquisition, PNA included three companies. While in Platinum Equity’s portfolio PNA gained a seasoned metals CEO, Maurice S. Nelson, Jr. and added three locations.[21] Platinum Equity sold PNA Group to publicly traded Reliance Steel & Aluminum Co.(NYSE: RS) in August 2008 for $300 million. The purchase price, together with the $181 million in accumulated profits, represented 27 times Platinum’s original investment of $17.5 million just two years earlier.[22]

M&A&O®

The trademark Platinum Equity strategy, M&A&O, integrates traditional M&A with operational expertise. Throughout the transaction, transition and ownership, the firm’s in-house teams apply operational guidance and resources in order to maximize value.[23] This unique strategy means the firm often acts more like a strategic buyer of companies than a financial buyer. After an acquisition, Platinum Equity often invests in additional businesses, equipment, people and facilities that give its holdings a stronger position for the long haul.[24]

Investments

Since 1995, Platinum Equity has acquired nearly 100 businesses across a broad array of industries, including information technology, telecommunications, logistics and distribution, industrials, manufacturing, media, real estate and automotive. Those acquisitions represent more than $27.5 billion in aggregate annual revenue at the time of acquisition.[25]


Current Portfolio of Companies

  • 3B The Fibreglass Company (2008)[26]
  • Acument Global Technologies (2006)
  • Advogent (2007)
  • AEES (2009)[27]
  • Altura Communication Solutions (2001)
  • Americatel Corporation (2006)
  • Broadleaf Logistics Company (2007)
  • Canvas Systems (2009)[28]
  • Covad Communications Group, Inc. (2008)
  • Data2Logistics (2002)
  • DAUM Commercial Real Estate Services (2009)[29]
  • DCA Services (1997)
  • DyStar (2004)
  • GEESINKNORBA, LLC (2009)
  • Genmar (2010)[30]
  • iET Solutions (2003)
  • International Offshore Services (2009)
  • Kemet (2009)[31]
  • Matrix Business Technologies (1999)
  • Maxim Crane Works (2008)
  • NextiraOne Mexico (2001)
  • OAO Technology Solutions (2010)[32]
  • PEAK Technologies (2005)
  • Pomeroy IT Solutions (2009)
  • Ryerson, Inc. (2007)[33]
  • San Diego Union-Tribune (2009)[34]
  • SCM Metal Products, Inc. (2008)
  • Strategic Distribution, Inc. (2007)
  • Turf Care Supply Corp. (2005)
  • USRobotics (2005)
  • Vanguard Networks (2001)
  • WFI (2007)
  • Wheel Pros, Inc. (2008)

External links

References

  1. ^ Deborah Crowe (September 3, 2008) Platinum Equity Closes $2.75 Billion Private Equity Fund.Los Angeles Business Journal.
  2. ^ Repolishing Platinum, Readers Say Section. Forbes Magazine. November 2, 2009.
  3. ^ Russ Banham (January 5, 2010). CFOs to Watch: Keeping the Deals Coming. Treasury & Risk.
  4. ^ Edited by Andrea D. Murphy and John J. Ray (October 28, 2009). America’s Largest Private Companies. Forbes.
  5. ^ Charles Proctor (October 19, 2009). Largest Private Companies Make Way for Newcomers. Los Angeles Business Journal.
  6. ^ Steven Bertoni (October 19, 2009). Ready to Play. Forbes Magazine.
  7. ^ Steven Bertoni (October 19, 2009). Ready to Play. Forbes Magazine.
  8. ^ Larry Armstrong (June 21, 1999). The Leading Private Info-Tech Companies. BusinessWeek Online.
  9. ^ Phyllis Berman (July 9, 2001). Buyout Buccaneer. Forbes.
  10. ^ Platinum Equity lists partners, officers. Meadville Tribune. September 14, 2007.
  11. ^ “Alden to sell Metrorolical and imaging operations.” Boston Business Journal. December 20, 1996.
  12. ^ “Pilot Software Finally Gets Away from Parent Cognizant.” Computer Business Review. August 11, 1997.
  13. ^ Platinum Equity lists partners, officers. Meadville Tribune. September 14, 2007.
  14. ^ Russ Banham (January 5, 2010). CFOs to Watch: Keeping the Deals Coming. Treasury & Risk.
  15. ^ The Private Equity Breakdown 4Q 2009. PitchBook.
  16. ^ “Platinum Equity Completes Acquisition of GE IT Solutions; Former General Electric Unit Will Be Integrated With CompuCom Systems, Inc". BNET. December 1, 2004
  17. ^ “Platinum Equity Buys GE's IT Solutions.” VARBusiness. December 4, 2004.
  18. ^ Platinum Equity Completes Sale of CompuCom Systems to Affiliate of Court Square Capital Partners. TMC News. October 3, 2007.
  19. ^ Phyllis Berman (January 22, 2003). Tom Gores’ X-Ray Vision. Forbes.
  20. ^ “Merry X-Ray Acquires SourceOne Healthcare Technologies from Platinum Equity.” BNET. November 21, 2005.
  21. ^ Steven B. Weiner (July/August 2008 Issue ). Fresh Eyes. Forward Magazine.
  22. ^ Deborah Crowe (April 30, 2009). Platinum Equity Buys IT Company. Los Angeles Business Journal.
  23. ^ M&A&O (company website)
  24. ^ Steven B. Weiner (July/August 2008 Issue ). Fresh Eyes. Forward Magazine.
  25. ^ Company Profile
  26. ^ “New organisation unveiled at 3B, The Fibreglass Company.” Press Release. April 30,2008.
  27. ^ "AEES Launches New Brand Identity, Marks New Vision as a Stand-Alone Global Supplier.” PR Newswire. September 10, 2009.
  28. ^ Deborah Crowe (April 30, 2009). Platinum Equity Buys IT Company. Los Angeles Business Journal.
  29. ^ Deborah Crowe (January 14, 2009). Platinum Equity Acquires Stake in Real Estate. Los Angeles Business Journal.
  30. ^ Platinum Equity Buys Four Winns, Glastron, Wellcraft, Ranger. Boattest.com. January 27, 2010.
  31. ^ KEMET Announces Completion of Tender Offer for its 2.25% Convertible Senior Notes Due 2026. Press Release. June 30, 2009.
  32. ^ David Hubler (January 19, 2010). Platinum Equity buys OAO Technology. Washington Technology.
  33. ^ Steven B. Weiner (July/August 2008 Issue ). Fresh Eyes. Forward Magazine.
  34. ^ RICHARD PÉREZ-PEÑA (March18, 2009). Buyout Firm Acquires San Diego Paper. New York Times.

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