BOSTON – Parthenon Capital held a final $350 million close in June on its debut private equity fund.
In addition, the firm closed its first two deals in June, putting $30 million in equity into a staffing company and $15 million into a children’s clothing company.
Demand among investors to enter Parthenon Capital’s fund was so great that the firm had to ask L.P.s to scale back their commitments, in some cases to $25 million from $50 million, said Ernest Jacquet, a managing partner at the firm. “These were high-class problems,” Jacquet said.
The fund, which closed at its cap, launched in May 1998 with a target of $250 million and held a first close on $257 million in February.
Jacquet said the roster of L.P.s includes a mix of state and corporate pensions, funds-of-funds, endowments and banks, among them General Mills Inc., General Motors Corp., Mobil Corp., Shell Oil Co., BancBoston, Bank of America, Chase Manhattan Corp., Duke Endowment, Wellcome Trust, Oregon State Treasury, Michigan State Treasury, Rhode Island State Treasury, Corning Inc., Pacific Corporate Group and HarborVest Partners.
Parthenon Capital’s investment strategy includes providing business consulting from The Parthenon Group to the companies in which the firm has made an investment. Jacquet said his firm’s first two transactions follow that plan – Parthenon Group will help one company expand overseas and assist the other in brand strategy.
Parthenon Capital in July sponsored a recapitalization of Creditek, a Parsippany, New Jersey-based company that provides personnel to accounts receivable departments. Creditek specializes in resolving business-to-business billing disputes, and the company’s clients include Xerox Corp., Gillette Co. and Polaroid Co.
Parthenon Group, with an office in London, will help Creditek expand its operations into Europe, Jacquet said.
Parthenon Capital in July also led the racapitalization of Franco Apparel Group, a manufacturer of sports team-branded clothing for infants and toddlers. Parthenon Group brought together a group of investors to help Franco make its first add-on – the acquisition of Starter Corp., a bankrupt sportswear manufacturer. The consortium includes strategic buyers Logo Athletic, Outerstuff and Shottenstein Stores Corp., based in Indianapolis, Ind., New York, and Columbus, Ohio, respectively. Provisions of the deal, which has a total value of $46 million, provide Franco with the licensing rights to the Starter brand.
Franco in August also became a licensee for the Adidas Corp. brand. The sportswear manufacturer’s president and chief executive officer, Robert Dreyfus, sits on Parthenon Group’s advisory board.
Parthenon Capital was formed in 1998 by Jacquet and John Rutherford, a co-founder of Parthenon Group, to make conservatively-leveraged investments in middle-market companies. Jacquet earned his private equity credentials at Summit Partners, the Boston firm where, he founded a buyout division in 1990.
Rutherford said Parthenon Capital likely will raise a mezzanine fund to invest in Parthenon deals.