Gordian Capital Lands First Deal

Two founders of Gordian Capital LLC recently closed their first deal since forming in 2006. They manage a search fund, an investment vehicle commonly used by recent MBA graduates in which investors back an entrepreneur’s efforts to locate and buy a privately held company.

Robert Befidi and Mark Sinatra, two entrepreneurs in their 30s who founded the firm, bought an undisclosed stake in Staff One Inc., a Durant, Okla.-based human resources outsourcer that offers benefits and payroll administration, health and workers compensation insurance programs, and other employment services to small and medium-sized businesses.

Deal terms were not released, though Gordian Capital targets companies generating $5 million to $50 million in revenues. The small shop funded the deal with about 40 percent equity and 60 percent debt. Medallion Capital Inc., a Burnsville, Minn.-based lender, provided senior and mezzanine debt; the firm also financed a portion of the debt with seller notes.

Gordian Capital had been researching recruitment outsourcing for a year, and had looked at and passed on 10 other possible targets before consultants back in January introduced them to Dell Wood, who founded Staff One in 1988. Gordian Capital’s near-term plan is to expand Staff One throughout Oklahoma and Texas.

Sinatra and Befidi raised around $500,000 between October 2006 and January 2007 to cover operating costs, and began looking for deals in March 2007. They plan on holding Staff One for about 10 years, Befidi said. Befidi and Sinatra are not sure if they will raise a traditional buyout fund in the coming years.

Before founding Gordian Capital, Sinatra worked in sales management with OfficeTiger, a business process outsourcing firm. Earlier in his career he was an assistant vice president with Credit Suisse, where he helped build an investment valuation group in its private equity division.

Befidi previously had been an advisor to Circle Capital, a South African investment firm, responsible for deal structuring and execution in financial services, health care, technology and real estate. Before that, Befedi was an equity research analyst on the health care team at Piper Jaffray & Co., where he covered medical technology companies.