Audax raises $700M for fund III

LBO shop Audax Group is more than half-way toward its goal of raising a third fund.

The Boston-based firm, co-founded by a pair of former Bain Capital executives in 1999, has raised $700 million for Audax Private Equity Fund III, which is targeted at $1 billion, according to a filing with the Securities and Exchange Commission. An Audax representative could not immediately be reached for comment. The firm raised its second private equity fund in 2004 with $700 million in commitments, and it also raised a $700 million mezzanine fund last year.

Audax collects carried interest at a 25% rate on investments from its first two funds, maintaining Bain Capital’s tradition of above-average carry. Boston-based Bain Capital sets a carry of 30 percent.

Among recent deals, Audax bought Knoxville, Tenn.-based Dura-Line Corp. from Sun Capital Partners in April. In the same month, Audax acquired Elyria, Ohio-based Arnco Corp. from Arnco CEO Robert Smith. The two companies each make polyethylene pipes that protect underground wire and cable.

Portfolio companies for its LBO business include McLean, Va.-based CIBT Global, which helps corporations and government agencies obtain international travel documents for employees; Newton, Mass.-based Questex Media Group, a trade publisher; Salem, Va.-based truck-chassis maker Silent Preferred Partners; and Swissray International, an Elizabeth, N.J.-based digital X-ray maker.

Audax Co-CEO Geoffrey Rehnert, a former Bain Capital managing director, helped found the mega-firm. The other co-CEO is Marc Wolpow, also a former Bain Capital managing director, who founded Sankaty Advisors, Bain Capital’s lending arm.

Audax also operates a mezzanine-lending business, run out of its New York office. The firm is known for supplementing its debt commitments to companies by buying equity stakes in the same companies. The California Public Employees’ Retirement System reportedly holds a minority interest in Audax. —Mark Cecil