Ex-AEA Pros Raise $147M To Buy Testing, Chemical Cos.

SFW Capital Partners LLC has raised about $146.75 million for its inaugural fund, a pool earmarked to acquire companies engaged in safety testing, environment monitoring, and medical testing, as well as to acquire makers of chemicals, additives and specialty performance materials.

The Rye, N.Y.-based buyout shop is closing in on the halfway point of the $350 million target set for its nascent SFW Capital Partners Fund LP, according to a mid-January Form D filing with the Securities & Exchange Commission. Ohio Public Employees Retirement System announced in late January that it had committed $5 million to the shop from its $51 million Ohio PERS/Credit Suisse Ohio-Midwest Fund. SFW did not return requests for comment.

SFW represents the union of three LBO pros, Thomas Salice, Roger Freeman, and Norman Wells, and their long time advisor, David Webb. Until leaving in 2005, Salice was a vice chairman at New York-headquartered AEA Investors LLC, while Freeman and Wells were managing directors. Webb, who founded and led Merrill Lynch & Co.’s financial sponsors group, was the buyout trio’s primary advisor over the past 15 years.

The firm invests in U.S.-based, lower middle-market companies in two sectors, according to its Web site. The first is instrumentation services, which includes safety testing, environmental monitoring, medical testing, and drug discovery. The second sector, which SFW calls “growth industrial,” includes companies that make chemicals, additives, and specialty performance materials. In both these sectors, SFW is looking to buy market leaders where potential rivals face high barriers to entry.

Two of the firm’s four founders come from AEA Investors, a private equity firm founded in 1968 by the Rockefeller, Mellon, and Harriman families and S.G. Warburg & Co. It takes control stakes in middle market companies in four sectors: industrial products, specialty chemicals, and consumer products and services.

Salice joined AEA Investors in 1989, advancing to the position of president and director in 1999, chief executive officer in 2000, and vice chairman of the board of directors in 2002. He sits on the boards of Mettler-Toledo International and Waters Corp. He has also served on the boards of CasTech Aluminum Group, Manchester Tank & Equipment Co. and Sovereign Specialty Chemicals, Inc., in which AEA Investors once held a controlling stake.

At AEA Investors, Freeman worked on investments in instrumentation services, chemicals, specialty materials, and service sectors. Freeman sits on the board of Telephia, Inc. and has previously served on the boards of IAG Research, Inc. He has previously served as CEO of three companies, including Sovereign Specialty Chemicals.

The other two SFW pros are Webb and Wells. For over 22 years, Webb worked for Merrill Lynch & Co., where he founded their financial sponsors group and was a vice chairman of investment banking.

Wells previously served as chief executive of three middle-market LBOs, the most recent of which was Sovereign Specialty Chemicals, Inc. Wells works in SFW’s second office, in Hudson, Ohio. Messrs. Salice, Freeman and Webb presumably work in the Rye, N.Y. office.

The firm is not using a placement agent to help market the fund.—E.B.