Concours Group Taps Thayer Capital To Wrap Mezzanine Financing

The essential role consultants play in information technology has been firmly established, and as buyout firms endeavor to establish a role in the market, these acquisitive companies desire buyout expertise.

Therefore, it should be no surprise that Thayer Capital Partners was selected as the sole institutional investor in The Concours Group’s private equity financing that closed Feb. 29. The Kingwood, Texas-based firm has raised a total of $21 million in the past two months, collecting $15 million from Thayer and the balance from a private European investor. The company is likely to have its next financing come via the public markets.

“They were interested in us because they were completing an acquisition in Europe, and they wanted a private equity firm that had relationships in the IT area to broaden their reach to the customers,” said Rick Rickertsen, chief operating officer at Thayer.

Rickertsen added that although the acquisition took $10 million from the financing, through a combination of bank loans and the remaining equity capital, the company has sufficient dry powder to operate through a slowdown in the IPO market.

“We started out looking for $5 million, but many firms wanted to give us $75 million,” said Ron Christman, chief executive at Concours. “We wound up taking $15 million because we decided Thayer had strategic resources for us in its portfolio, and we needed to take that much in order to get them.”

Christman said the company intends to use the proceeds from the financing to acquire companies that bring additional skill sets to Concours’ current service offerings. The company works with major corporations to develop and deploy e-business strategies. Concours will use the capital infusion to facilitate development of seamless intranets for the corporate customers.

The Concours Group currently has offices in the U.S., England, Germany, France, the Netherlands and Sweden, and Christman said the company intends to use another portion of the proceeds to expand its operations into the “AustralAsia” market.

In conjunction with the firm’s investment, Thayer will appoint one member of the board of directors, which Christman said would be a high-profile member of the firm’s advisory board.

Salomon Smith Barney acted as placement agent on the transaction.

Christman added that the firm took the larger amount of money in order to cover operating costs in the event the initial public offering market slows down over the next six months. However, given the rate at which companies are queuing up for the IPO dance, no one would be surprised if the filing comes sooner.