Linden LLC, a private equity firm that focuses on middle market buyouts in the health care and life science sectors, held a first close earlier this month on its inaugural fund, Linden Capital Partners LP.
The fund has raised more than $100 million from limited partners. Linden declined to comment, citing regulatory restrictions.
Linden set out with a target of $150 million for the investment vehicle, but due to a hearty reception from LPs, the firm is now aiming to hit the fund’s $200 million hard-cap, says a source with knowledge of the fund-raising process.
Parish Capital Advisors has the largest single stake in Fund I, while RCP Capital Advisors and a “prominent university endowment” have also placed substantial investments in the fund, the source says. To garner outside commitments, Chicago-based Linden has retained Park Hill Group to serve as placement agent.
With the initial close wrapped up, Linden is now on the hunt for companies to take under its wing. Market segments the firm finds attractive include animal health, medical products, laboratory equipment & consumables, wound care, nutrition, contract manufacturing, ophthalmology, diagnostics, oral health and select health care services.
Linden will not invest in companies where there is a venture risk. Also, the firm places less of an emphasis on service-oriented investments since they tend to be pricier investments in more competitive environments. Instead, Linden’s key focus is on products and distribution companies that earn at least $5 million in EBITDA.
The firm will typically look to cut equity checks between $15 million to $30 million per investment, while deal sizes will fall between $50 million and $100 million in total enterprise value, the source said. However, for deals requiring larger equity investments, the firm has an investment alliance with Madison Dearborn Partners, a fellow Chicago-based buyout shop with more than $7.5 billion under management. For these larger transactions, Linden co-invests alongside the Madison Dearborn. Additionally, the senior partners at Madison Dearborn are investors in Linden Capital Partners.
Linden completed its first investment in April when, looking to capitalize on consumer demand in the oral care market, it acquired Ranir LLC, a private-label and contract manufacturer of oral care products, such as tooth-whitening strips and gels, toothbrushes, dental floss, travel kits and accessories. At the time, Parish Capital warehoused the equity to cover the acquisition, but Ranir now represents the first company to find a home in Linden Capital Partners.
Linden was formed in 2002 by former principals of First Chicago Equity Capital, which is now One Equity Partners (the private equity arm of JPMorgan.) The firm is lead by Eric Larson, a co-founder and former managing general partner at First Chicago. He is joined by other First Chicago alum Tony Davis, Brian Miller and Mary Beth Pieprzyca.