Platinum Equity

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Platinum Equity
Industry Private Equity
Founded 1995
Founder(s) Tom Gores, Chairman & CEO
Headquarters Beverly Hills, California, United States
Products Investments, private equity funds, leveraged buyouts
Website www.platinumequity.com

Platinum Equity, LLC 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.[1]

The firm has its headquarters in Beverly Hills, California with regional offices in Boston, New York and London. In 2010, it ranked #31 on Forbes’ Largest Private Companies list for 2010[2] and #1 on the 2010 Los Angeles Business Journal list of LA's Largest Private Companies.[3] The firm manages three private equity fund vehicles, Platinum Equity Capital Partners and Platinum Equity Capital Partners II, and [4] the firm recently completed raising Platinum Equity Capital Partners III, a $3.75 billion buyout fund.

History[edit]

The firm was founded in 1995 by Tom Gores. its Equity’s first acquisition was LSI, a company that generated computer graphics to re-create accidents for courtroom testimony. After purchasing it for $200,000, Platinum Equity focused on servicing existing customers and returning the company to profitability.[5]

Over the next five years, between July 1996 and September 2001, the firm 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).[5] BusinessWeek ranked the firm number 10 on its 1999 list of the country’s top 20 private IT organizations, based on 1998 revenues.[6][7]

During this period of acquisition growth, additional partners joined the firm and several other joined through key acquisitions starting in 1999.[8][9][10]

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.[11] For the second fund, Platinum Equity Capital Partners II, which closed in September 2008, despite uncertainty in the financial markets. the firm initially sought a $1.5 billion leveraged buyout fund and nearly doubled it by raising $2.75 billion.[12]

In 2009, during the financial crisis, Platinum Equity acquired 14 companies in the first 11 months of 2009, eight of them full buyouts.[13][14]

Investments[edit]

Since 1995, Platinum Equity has acquired over 115 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.[15]

  • 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 SourceOne 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]

References[edit]

  1. ^ "Platinum Equity". Forbes. Retrieved July 29, 2014. 
  2. ^ "#31 Platinum Equity". Forbes.com. Retrieved 2011-02-13. 
  3. ^ Angeles, Los (2010-10-19). "2010 Largest Private Companies List". Los Angeles Business Journal. Retrieved 2011-08-14. 
  4. ^ Deborah Crowe (September 3, 2008) Platinum Equity Closes $2.75 Billion Private Equity Fund.Los Angeles Business Journal.
  5. ^ a b Steven Bertoni (October 19, 2009). Ready to Play. Forbes Magazine.
  6. ^ Larry Armstrong (June 21, 1999). The Leading Private Info-Tech Companies. BusinessWeek Online.
  7. ^ Phyllis Berman (July 9, 2001). Buyout Buccaneer. Forbes.
  8. ^ Platinum Equity lists partners, officers. Meadville Tribune. September 14, 2007.
  9. ^ “Alden to sell Metrorolical and imaging operations.” Boston Business Journal. December 20, 1996.
  10. ^ Platinum Equity lists partners, officers. Meadville Tribune. September 14, 2007.
  11. ^ Repolishing Platinum, Readers Say Section. Forbes Magazine. November 2, 2009.
  12. ^ Russ Banham (January 5, 2010). CFOs to Watch: Keeping the Deals Coming. Treasury & Risk.
  13. ^ Russ Banham (January 5, 2010). CFOs to Watch: Keeping the Deals Coming. Treasury & Risk.
  14. ^ The Private Equity Breakdown 4Q 2009. PitchBook.
  15. ^ Company Profile
  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.

External links[edit]