Platinum Equity has closed its latest buyout fund, a $6.5 billion vehicle with more than 200 limited partners subscribed, among them local institutional investors such as the Los Angeles City Employees Retirement System and the Los Angeles Fire and Police Pensions.
Chairman and Chief Executive Tom Gores said the new fund will operate on the same principles as the firm’s last vehicle, but with the ability to do larger and more complex deals including more carve-outs from public companies and less of an emphasis on distressed acquisitions.
“In the early days, we were buying more troubled companies,” Gores said. “While we still do that, with more capital available to us, we’re also buying some higher-quality companies where they might need some vision and management expertise to steer them in the right direction.”
Platinum has already done four deals out of the latest fund, which is the fourth buyout fund the company has done since 2004 and the first since 2012’s $3.75 billion vehicle. Those deals include a $4 billion acquisition in November of Columbus, Ohio-based Emerson Network Power – rebranded as Vertiv – and a deal for Interior Logic Group that included a reported $101 million in capital from Platinum and $255 million in debt financing.
Its latest deal is another big corporate carve-out. Platinum announced last week that it intends to acquire the Australian and New Zealand business interests of office supply giant Staples Inc. for an undisclosed sum.
It’s not just the size of Platinum deals that have experienced growth, but the firm itself. The 22-year-old shop now has 160 employees across five offices including a recently opened Singapore outpost, which is the hub for Platinum’s Asia deal flow and portfolio company operations.
With the firm now a sprawling entity, Gores said his job has shifted dramatically since Platinum’s inception.
“My role has changed from being involved in the day-to-day, walking the hallways, and being in the middle of every deal,” he said. “Now, I’ve learned to delegate and focus on the strategy side of the business, making sure there’s not strategy creep. I spend a lot of time with my partners grounding them.”
While the size of the firm and its funds have grown, Gores said he still thinks Platinum has a deal-flow structure that allows it to pounce on opportunities faster than some new competitors in the private equity space.
“Our deal pipeline is very robust,” he said. “We’re competing with a new set of players now, but they aren’t as nimble as we are. We’ve done it one transaction at a time and haven’t gotten complacent with success.”
Gores ranked No. 21 on the Business Journal’s 2016 list of Wealthiest Angelenos with an estimated net worth of $3.43 billion.
