Buyout firms MidOcean Partners and Ripplewood Holdings announced last week that they would merge within the next 12 to 24 months.
Each firm will continue to operate independently in the short-term, but will try to collaborate on leveraged buyouts of U.S. and European companies.
Once the firms begin running low on dry powder, they will launch a combined fund under the Ripplewood name.
Timothy Collins, senior managing director of Ripplewood, and Ted Virtue, co-founder and CEO of MidOcean, will both serve as senior managing directors of the combined fund.
“We think that this will be accreditive to both the Ripplewood and MidOcean platforms,” Virtue says. “It is meant to leverage both of these pools of experience, skill sets, track records and geographic coverage.”
The issue of geography is important to both firms, as Ripplewood would like a better foothold in Europe, while MidOcean is interested in expanding to the Japanese markets. Until the merger, however, MidOcean is restricted from investing outside of the United States and Asia, due to its current partnership agreement.
Ripplewood operates offices in Tokyo and New York, while MidOcean-which spun out last year from Deutsche Bank – is split between New York and London.