LOS ANGELES, CA (September 3, 2008) – Substantially exceeding its original target, Platinum Equity today announced the closing of a $2.75 billion leveraged buyout fund focused on acquiring businesses that can benefit from Platinum’s operational expertise and resources.
Platinum launched fundraising with a target of $1.5 billion in committed capital, but strong investor demand and a rising tide of deal opportunities compelled the firm to increase the fund size to $2.75 billion for Platinum Equity Capital Partners II (“Fund II”). Fund I’s performance was at the top of its peer group worldwide.
Alongside Fund II, Platinum has committed to make a substantial co-investment that will increase the new fund’s available capital to well over $3 billion. Separate from Fund II, the firm continues to control a multibillion-dollar asset base comprising both predecessor fund and Platinum legacy investments.
“We are very pleased with the response from investors and appreciate their support,” said Tom Gores, Chairman and CEO of Platinum Equity.
“We hope to be just as successful with this new fund as we have been in the past, but this is no time for us to rest on our track record,” Mr. Gores said. “We need to remain smart and vigilant, and we intend to do so. We will continue to take good care of the assets our partners have entrusted us to invest on their behalf.
“Our hands-on approach to operations works especially well in the current economic climate,” Mr. Gores added. “Our success in reacting to changing market conditions has always differentiated us.”
Platinum’s M&A&O® approach to investing focuses on acquiring businesses that need operational support to realize their full potential and can benefit from Platinum’s extensive in-house capabilities and expertise in transition, integration and operations. Through nearly 100 acquisitions in the complex operational turnaround market, the firm has a consistent record of value creation.
“We presented a stellar track record that was among the best in the world and created strong demand from investors,” said Mark Barnhill, the Platinum principal responsible for the firm’s capital raising and investor relations.
“In this economy certain simple things resonate,” Mr. Barnhill said. “Institutional investors are looking for a strong investment team with a differentiated strategy and a proven ability to create value under both good and adverse conditions. We’ve worked hard to deliver all of those things.”
Investors in the new fund include a diverse cross-section of public and private pension funds, financial institutions, university endowments and trusts in North America, Europe and Asia.
Platinum’s current operations portfolio comprises 22 operating companies in a broad array of business markets, including information technology, telecommunications, logistics, chemical manufacturing, steel and metals services, industrial fastening systems and automotive products.
Fund II has already made several investments. Notable Fund II acquisitions include Ryerson Inc., one of the largest metals service center operators in North America, acquired in a public-to-private transaction valued at approximately $2 billion; Covad Communications, a leading provider of voice and data communications products and services; 3B the Fibreglass Company, formerly Owens Corning’s composite materials manufacturing facilities in Battice, Belgium and Birkeland, Norway; and Maxim Crane, a crane equipment rental and services provider serving the non-residential construction market in North America.
On Aug. 4, Platinum divested PNA Group, a national steel service center business, to Reliance Steel & Aluminum Co. in a transaction valued at approximately $1.1 billion. PNA was a Fund I investment.
Citi acted as placement advisor and Simpson, Thacher & Bartlett LLP acted as legal advisor for the private placement of the Limited Partnership interests in Fund II.
About Platinum Equity
Platinum Equity (www.platinumequity.com) is a global M&A&O® firm specializing in the merger, acquisition and operation of companies that provide services and solutions to customers in a broad range of business markets, including information technology, telecommunications, logistics, metals services, manufacturing and distribution. Since its founding in 1995 by Tom Gores, Platinum Equity has completed nearly 100 acquisitions with more than $27.5 billion in aggregate annual revenue at the time of acquisition.