Grotech Targets $400M For LBO and VC Deals

Firm: Grotech Capital Group

Fund: Grotech Partners VII LP

Target: $400 million

Industry Focus: Consumer, health care, IT

Grotech Capital Group, a mid-market health care, IT, and consumer-focused investor, is raising a new fund that it hopes will be equal in size to the $400 million sixth fund it raised in 2000, a source told Buyouts. The firm also plans to maintain its fee structure with Grotech Partners VII LP.

Previous investors and potential re-investors in the Timonium, Md. firm include BT Capital Partners Inc., the Baltimore Gas & Electric Co., the Michigan State Treasury, the Pennsylvania Public School Employees’ Retirement System, the Pennsylvania State Employees’ Retirement System and the San Francisco City and County Retirement System, according to Thomson Financial, publisher of Buyouts.

Grotech employs both buyout and venture capital strategies, depending on the industry it’s investing in. With health care and consumer-related companies, the firm favors buyout and late-stage growth investments that require equity tranches ranging from $10 million to $40 million a piece. With IT, the firm typically invests $3 million to $20 million in early-stage and expansion-stage venture capital rounds.

Grotech’s portfolio includes investments in quick-serve Mexican-style restaurant chain Del Taco Inc.; scientific research products manufacturer Pelican Life Sciences; and supply-chain software provider Full Tilt Solutions Inc.

The most recent exit by the firm was last December’s initial public offering of MEDecision, a provider of health care-related software and services. Prior to the IPO, which saw 4.7 million shares hit the market at $10.00 each, Grotech was the company’s lead shareholder with an approximated 27.1 percent ownership stake. Shares of MEDecision, which trade on the Nasdaq under ticker symbol MEDE, were selling for $5.60 as of press time.—A.N.