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Over the course of two weeks earlier this year, Platinum Equity announced three Small Cap acquisitions, continuing the momentum generated around lower-middle markets in the back half of 2025.
Marketing services firm Czarnowski Collective, sheet metal fabricator Tongrun International and Norton Packaging join high-speed inflight connectivity provider Anuvu, which closed in October, as part of the Platinum Equity portfolio.
In the fourth quarter of 2025, Platinum Equity also announced the divestiture of aerospace aftermarket solutions provider Unical Aviation (scheduled to close in April), and HVAC/R company Motors & Armatures sold its parts division.
“We think our model resonates, particularly with family-founder sellers and corporate sellers, and our success in raising our second fund allows us to be aggressive at a time when others may be retreating given fundraising issues,” Platinum Equity Managing Director Dan Krasner said.
Platinum Equity Managing Director Nick Fries added: “This (momentum) is the product of the collective horsepower that we have built at Platinum. The activity is really driven by the front end. We see a great business development team, with dedicated resources, we source hundreds of deals a year in the lower-middle market, and we have the ability to review every single deal that comes in the door. That gives us optionality as a team, as a firm, and it really helps us to find those diamonds in the rough.”
Last year, Platinum Equity secured $2.28 billion in commitments for Small Cap Fund II, which exceeded its $1.75 billion target. Despite reports of industry-wide challenges of and other complex issues, senior leadership considered the fundraise a testament to what the firm has established.
“We’ve built a powerful lower-middle market franchise that draws on three decades of experience and allows us to create value across the full spectrum of investment opportunities,” Platinum Equity Chairman and CEO Tom Gores said of the experience and reputation the firm has developed since its founding in 1995.
The Small Cap team comprises 50 M&A and Operations professionals across North America and Europe. It specializes in transactions involving founder- or family-owned businesses, complex corporate divestures, public-to-private transitions, and acquisitions from a diverse range of private sellers.
The dedicated lower-middle market investment team deploys Platinum Equity’s specialized M&A&O® strategy that integrates investment expertise with deep operational capabilities.
L&R is a founder-led business that Platinum Equity has acquired, and company leadership is complimentary of the firm’s operations focus.
“Platinum has been an amazing partner, specifically around the culture of the business,” L&R Chairman Marc Bodner said. “One would expect for Platinum to come in and it’s all about the numbers, it’s all about profit and loss, but Platinum’s been a great partner in allowing our culture, embracing our culture. Yeah, we’re profit-and-loss driven, but we’re also culture driven. It’s been a completely different experience than what one would think.
“I think the merging of this founder, family culture driving the L&R way and merging it with the disciplines of good financials, good reporting, combining those ideas is why we are (successful) today.”
‘This momentum just continues to build’
The lower-middle market space can be considered attractive for a number of reasons. Smaller companies could offer opportunities for future growth, offering more room for expansion. The space is larger, which could help private equity firms acquire good companies at a solid value.
“So we felt it was important, having grown up in the lower-middle market, to not cede that space to others, but rather leverage our experience in that space to continue to be active and that led us to create a dedicated group focused on that sector across all the functional areas that we have at Platinum, M&A and Operations working in tandem, just like we do in the Large Cap space,” Platinum Equity Co-President Jacob Kotzubei said of the strategy established more than a decade ago as the firm’s flagship funds moved upstream into larger deals.
Smaller companies also typically have environments where private equity firms with an operational focus are helpful.
Orbit Irrigation, which Platinum Equity sold to Husqvarna Group, serves as an example of a successful lower-middle market investment. Under the firm’s stewardship, Orbit Irrigation undertook an innovative path where the company accelerated the introduction of smart technology to sprinkler systems. Orbit also implemented a sound M&A strategy with the acquisition of the garden business from Bond Manufacturing.
“Platinum helped Orbit transform from a traditional consumer goods company into an innovative technology provider,” Orbit CEO Stuart Eyring said when the sale was announced. “They also helped us put the systems and infrastructure in place to facilitate our growth and transition to a true market leader.”
Which brings us to today.
“I believe (Small Cap II) probably could not be any better coming out of the gate,” Krasner said. “We appreciate that allocations are hard to come by in this market the last couple of years so for us to be able to exceed our (fundraising) target, we don’t take that for granted.”
The team expects 2026 to yield more buy-side and sell-side activity.
“I think we’re getting more quality looks,” Fries said. “We’re getting better deals. We’re confident we’re diligencing them better, working the processes better. The relationships that we have with the intermediaries are getting deeper and stronger.
“We’re going to continue to build the portfolio and work hard so this momentum continues to build.”
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