A deep recession is not such a scary thing for Platinum Equity.
The Beverly Hills private equity firm founded by Tom Gores, which specializes in turning around struggling companies, recently announced two acquisitions and the closing of a third, continuing a busy stretch for the firm since the financial crisis hit late last year.
Platinum acquired a majority stake in Canvas Systems LLC, a global supplier of information technology equipment, on April 30, the same day it announced it was buying the wire harness and electrical distribution business of aluminum giant Alcoa Inc.
Terms of the deals were not disclosed.
“Many businesses are struggling and need a partner with a steady hand, deep operational expertise and the ability to navigate through these times,” said Gores in a statement. “We’re fortunate to have the knowledge, experience and capital required right now to help these businesses survive, and to be positioned to thrive when the markets eventually rebound.”
Gores was not made available for additional comment.
Canvas Systems specializes in refurbishing and selling equipment made by IBM, Hewlett-Packard and other manufacturers. Platinum has had success with IT companies in the past; the firm sold CompuCom in 2007 for a healthy profit after resuscitating the ailing tech company.
Platinum hopes to do the same with the acquisition of the Alcoa business. Alcoa announced in January that it would part with four of its noncore divisions, including its Electrical and Electronic Solutions unit, which includes the wire harness and electrical distribution business.
Platinum has announced five acquisitions since October, after it closed a $2.75 billion fund.
The firm announced last week that it has closed one of those deals, the March acquisition of the San Diego Union-Tribune newspaper. Terms of the deal were not disclosed, but the firm reportedly picked up the struggling publication for just $15 million. Platinum said it has named Paul Bridwell chief restructuring officer for the newspaper. Just last week, the newspaper announced 192 layoffs.
The firm has completed almost 100 acquisitions since the billionaire investor founded it in 1995 after splitting from his brother Alec’s competing firm, Gores Group LLC.
Tech Sale
Gores Group, meanwhile, announced last week the sale of one of its portfolio companies to buyout firm Milestone Partners.
Gores Group, which has $1.7 billion under management and specializes in tech companies, sold Avure Technologies Inc. for an undisclosed amount. The Seattle company makes metal-forming equipment and high-pressure food pasteurization systems.
After purchasing Avure in late 2005, Gores Group took a variety of steps, including expanding its business focus and implementing a new product development program, which grew revenue 250 percent.
The firm did not say how much it made in the deal, but in a statement, Senior Managing Director Scott Honour said it was “a good investment for Gores.”
Tarp Repayment
City National Corp., which last week raised more than $100 million in a public stock offering, is looking to become the first local financial institution to repay the money it received under the government’s financial rescue plan.
The Beverly Hills parent of City National Bank, which received $400 million in November under the Troubled Asset Relief Program, sold 2.8 million shares last week at $39 apiece.
City National, which has $17 billion in assets, is the largest bank in Southern California and received more government aid than any other local institution. More than a dozen L.A. County banks received Tarp funds.
Smaller banks across the country have begun repaying the government, and several larger ones such as Bank of America have announced plans to do so.
Investor Acquisition
First Western Financial Inc., a Denver company that operates a retail bank and investment manager, has acquired the investment advisory business of L.A.-based GKM Advisers LLC.
This is the third local acquisition in the past year for First Western. Previously, the company bought Financial Management Advisors and Ryder Stilwell Inc.
GKM, founded in 2000, is an investment manager for high net worth individuals and families, as well as pensions and foundations.
First Western, which has $2.5 billion under management, hopes the acquisition will increase its profile among L.A.’s wealthy residents.
C-Suite News
Wedbush Morgan Securities, based in downtown Los Angeles, has hired an equity research team to cover restaurant, gaming and leisure companies. The team, previously at Merrill Lynch, will be led by Rachael Rothman. Century City financial services firm Scouler & Co. has hired John Rudd as principal.
Staff reporter Richard Clough can be reached at [email protected] or at (323) 549-5225, ext. 251.
