Gores taps military expertise

In the arms race for skilled and well-connected executives, Gores Group has amassed what it thinks will be a battlefield edge.

The Los Angeles-based buyout firm has launched an affiliate called the Four Star Group that is composed of industry executives and retired high-ranking military officers.

The group will source deals, perform due diligence and serve on the boards of companies in the aerospace, defense and homeland security sectors.

Gores Group gets a first look at any deals the Four Star Group might be contemplating. The firm also intends to tap the know-how of the generals throughout the life cycle of its defense and homeland security deals. The group can also take part in deals that don’t involve Gores Group. The Gores Group is currently investing from Gores Capital Partners II, which raised $1.3 billion and closed last year.

“Not everything they do will be with Gores,” says Scott Honour, a senior managing director at the buyout firm. “However, everything we do in aerospace and defense will involve the Four Star Group. Half of the companies we own are looking to tap the generals.”

In the last six months especially, buyout firms have hired a number of retired industry executives, including former high-ranking military officers. Earlier this year, for example, Behrman Capital hired Gen. Peter Pace, former chairman of the Joint Chiefs of Staff, to serve as an operating partner.

The Four Star Group is led by William B. Patton, a veteran executive of technology and computer systems companies, and Matthew Spain, a former managing director in the mergers and acquisitions group of UBS AG. The group’s calling card, however, is its advisory board of six retired generals. Those officers include Gen. John P. Jumper, former chief of staff of the U.S. Air Force; Gen. Lance W. Lord, retired commander of the Air Force Space Command; and Maj. Gen. Paul A. Weaver, who was the director of the Air National Guard and is chairman of the advisory board.

The Four Star Group has already taken up roles in two newly acquired Gores Group companies: satellite communications provider Gilat Satellite Networks Ltd., based in Israel; and CompuDyne Corp., a security products maker that focuses on the homeland security market. The Four Star Group is advising both companies on behalf of Gores Group, and the advisers have obtained equity stakes in both companies by virtue of their involvement.

Gores Group has previously created a similar kind of affiliate. The Glendon Group, a team of about 20 professionals, provides operational support to Gores Group companies, assisting them with sales and marketing, tax advice, technology support and facilities expertise. —Jeremy Harrell