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Ex-Goldman exec’s shop seals first deal with data-center-site developer

  • Firm formed by ex-Goldman exec last year
  • Targets middle-market industrial companies
  • Plans to raise traditional PE fund after a few deals

GHK Capital, the deal-by-deal shop formed by ex-Goldman Sachs executive Gilbert Klemann last year, completed its first deal, buying a company that develops sites for, among other things, data and distribution centers, according to people with knowledge of the situation.

GHK, which intends to raise a fund after a few deals, acquired Brown & Settle, a developer of large-scale parcel sites. Brown & Settle is the newly formed holding company for several subsidiary businesses, people said.

How much GHK paid for the company is unclear. The business has about $15 million of Ebitda, a source said.

The company is based in Loudoun County, Virginia, in an area where many companies are building data and distribution centers, sources said. The area “has already been a historical tech hub on the East Coast,” a source said.

Amazon, which is building its second headquarters in the area, is bringing more attention to the region, the source added.

GHK will own about two-thirds of the business, while the two founders, Mike Brown and Tommy Settle, will continue to own about one-third. The founders will remain operators with the business, while GHK will bring on Christopher Kete as CEO and Diane Waters as CFO, sources said.

Breakwater Management provided debt and preferred equity to help finance the deal.

Klemann formed GHK last year after leaving Goldman Sachs, which he joined in 2001. He worked in the merchant banking division in industrials and had a role in investing West Street Capital Partners VII, which closed on $7 billion in 2017.

The firm targets investments in lower-middle-market industrial companies with about $10 million to $30 million of Ebitda. It plans to raise a traditional private equity fund after it makes several deal-by-deal investments.

Klemann works with Kevin Collins, who was at Goldman Sachs from 2012 to 2015. Collins was in the special-situations group, where he led lower-middle-market PE investments, Buyouts previously reported. Charlie Fox joined in August and leads business development.

Action Item: Reach GHK here: info@ghkcapital.com