Cravey Green Returns To Market In New Guise

Firm: MSouth Equity Partners (f.k.a Cravey Green & Wahlen)

Fund: MSouth Equity Partners LP

Target: $400M

Despite losing the full services of two managing partners, MSouth Equity Partners is reportedly having no problem securing the $400 million it has targeted for a mid-market buyout fund earmarked to buy companies in the Southeast.

Investors have already told the Atlanta-based firm, formerly called Cravey Green & Wahlen, that they’re good for at least twice the targeted amount, according to people familiar with the fund. If true, the firm has done a superb job at handling succession, as Managing Partners Richard Cravey and Edwin Wahlen intend to step back into a secondary role at the firm.

The remaining team includes three partners, Garrison Kitchen, Michael Long and Bart McLean. The team has also added former BellSouth Corp. President and COO Mark Feidler. The partners decided to rename the firm to signify the regime change, though the Cravey Green & Wahlen Web site doesn’t reflect the name change yet. The firm declined comment.

The proposed GP commitment to the fund is $10 million. The fund carries a 2 percent management fee and 20 percent carried interest after providing an 8 percent preferred return. MSouth aims to close the fund in the late fourth quarter or the early first quarter, said sources.

The team will continue to oversee Cravey Green & Wahlen portfolio companies, 80 percent of which are based in the Southeastern United States. The firm, which prefers deals in the range of $25 million to $200 million in total value, has about $750 million under management.

MSouth’s predecessor has invested $450 million in 26 companies over 14 years. It has had 18 realizations returning 3.1x invested capital and a 30 percent gross IRR, according to a document about the firm obtained by Buyouts. Its portfolio includes Arch Aluminum & Glass Co., maker of architectural glass and aluminium products; Document Technologies Inc., a document management services provider; and The Flexitallic Group, a maker of industrial gaskets.

MSouth goes into the fundraise with some huge exits under its belt of late. The firm generated a 121.6 percent gross IRR on portfolio company TruckPro out of its most recent fund, Fund IV, as well as a 10.2x multiple of cost on the 2006 sale of Vectorply, also out of Fund IV.

Along with the homeruns, the firm has also has had a couple of strikeouts that yielded no value whatsoever, according to the document. These include the $11.4 million 1995 investment in Monarch Tile, out of Fund I, the $7.8 million 1996 investment in Gibson-Homans, also from Fund I, and the $26.7 million 1998 purchase of Carpets International, out of its third fund.

MSouth has one portfolio company in its newest fund, an environmental services company, though no further details were available.—M.C.