Grotech targets $400M for LBO, VC deals

Grotech Capital Group is raising a new fund that will be the same size as its $400 million sixth fund, raised in 2000, PE Week has learned.

Grotech’s Terry Hyman says that the firm will not be changing its compensation structure either, a move that will no-doubt please its limited partners. Previous investors in the fund 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 PE Week).

The Timonium, Md.-based firm focuses on mid-market health care and consumer deals. One of its recent exits was MEDecision (Nasdaq: MEDE), which it took public at the end of 2006. Also, portfolio companies Interpath Communications and Brandywine Senior Care were both acquired.

The firm last week promoted Chuck Cullen, Steve Fredrick, Erik Morris and Joel Radtke to partner. It also promoted Patrick Cairns to principal.

Grotech uses 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. With IT, the firm typically invests $3 million to $20 million in early stage and expansion stage VC rounds.

Its current portfolio includes 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. —Alexander Haislip and Ari Nathanson