Private equity fund to invest in area manufacturing firms
November 2005 – Kansas City, MO – A new private equity group in Kansas City has raised $45.5 million to invest in businesses in the region. TGP Capital Partners LLC plans to invest the money in perhaps a handful of leveraged buyouts of existing profitable companies, said Eric Graham, a principal in TGP Investments LLC, which will manage the private equity fund.
Graham said the new fund would operate essentially the same as the $100 million George K. Baum Capital Partners LP private equity fund. Graham and the two other principals in TGP Investments – William Thomas and Shane Parr – work for the company that manages the Baum Capital Partners fund.
All there remain active in the Baum-related fund.
TGP Investments is not part of George K. Baum & Co., Graham said, though Baum & Co. chief executive officer Jon Baum indirectly invested in the TGP Capital Partners fund through George K. Baum Holdings Inc.
The new fund expects to raise additional money to reach its $50 million target. Graham said the group completed work on the funds raised so far because it wanted funds available for deals it expects to be able to complete in the near future.
Graham said TGP Capital Partners sought “basic manufacturing and general industrial companies” and would consider business services and distribution companies. Likely candidates would have $20 to $100 million in annual revenues.
The group is not after startups.
“The companies we invest in are well-established generally and profitable,” Graham said.
Such companies may seek capital to expand, to acquire another business or to allow existing owners to convert their shares to cash. TGP Capital Partners would invest from $7 million to $10 million in the deal and arrange financing for the bulk of the transaction’s funding, Graham said. The debt is why the deals are called leveraged buyouts.
TGP Capital Partners and TGP Investments would rely on management to run the companies and to be part owners.