Last year’s credit crunch created such a boom in business for Liberty Partners that it asked for and received an additional $200 million last month from its sole limited partner, the Florida State Board of Administration.
Florida now has committed $800 million to the New York buyout firm, said Peter Bennett, president of Liberty.
Mr. Bennett said his firm’s ability to provide “one-stop shopping”-both equity and debt in an acquisition-was suddenly attractive to sellers when the credit crunch was causing deals to fall apart for other firms. As a result, Liberty completed more deals in the past three months than it had in the last year.
Last quarter, Liberty acquired new portfolio companies Critikon Co., Norwood Promotional Products (BUYOUTS Nov. 23, 1998, p. 10) and Laser Link Communications, an Internet service provider.
Last month, the firm agreed to acquire an additional platform and two add-ons, which Mr. Bennett declined to name. Because of the sudden increase in Liberty’s deal flow, the firm was worried that it might run short of capital. “We went down [to Florida] with an impassioned plea for money because we hadn’t seen that kind of activity in over a year,” he said. “Thankfully, they were extremely responsive to our request.”
Florida’s $200 million is the fourth commitment the investment board has made to Liberty. Their relationship began in 1992 when Florida committed $200 million with the agreement that it could increase the commitment periodically as it saw fit. Florida gave an additional $200 million in 1994 and 1996.
Florida’s agreement with Liberty allows the firm to reinvest returns from the fund as they are realized. Mr. Bennett said his firm expects to see significant proceeds from exits in 2000 and he likely won’t ask for or accept any additional money from Florida in the future.
Florida’s contract with Liberty expires in 2004.