Mich. Shop Eyes Platform Deal In Energy Sector

Firm: BlackEagle Partners

Fund: BlackEagle Partners LP

Amount Raised: $200 million

Target: $250 million

Placement Agent: Probitas Partners

BlackEagle Partners is currently eyeing an add-on and a platform investment for its debut fund, BlackEagle Partners LP, which closed last summer short of its target.

Garrett Kanehann

, partner and co-founder, declined to disclose which portfolio company the firm is negotiating the add-on for, but did offer that the platform deal is in the energy sector. BlackEagle Partners has talked with three lenders about asset-backed term loans and revolvers to finance the transactions, he said.

The Bloomfield Hills, Mich.-based firm finished raising the fund in July at $200 million, $50 million short of its target. Kanehann, however, said his firm was pleased with how much it raised given the rough fundraising market and the size of the firm’s staff. “It’s perfectly sized for our team—four partners and an investment professional staff of four—and for the segment of the market we’re pursuing,” he said.

BlackEagle Partners is looking at lower mid-market companies, with under $200 million in enterprise value that are non-core subsidiaries of larger companies, or else underperforming or distressed businesses. It typically invests between $5 million and $40 million of equity in its deals. The firm is open to targets in most industries, except for high-technology and real estate.

So far, the shop has invested about 20 percent of the debut fund. Most recently, in August, it bought Instar Services Group Inc., a Fort Worth, Texas-based subsidiary of ServiceMaster, a portfolio company of Clayton Dubilier & Rice. The company provides disaster response, insurance restoration and reconstruction services. BlackEagle has three other companies in its portfolio: Eurodesign Cabinets Inc., a Chino, Calif.-based home cabinet maker; Federal Broach and Machine Co., a Harrison, Mich.-based auto parts supplier; and Rockford Products Corp., a Rockford, Ill.-based maker of chassis and suspension components.

In April 2005, Kanehann and two other former Questor Management professionals—Michael Madden and Jason Runco—founded the firm, originally known as Centurion Capital Partners. They were joined by Henry Watson, the founder of the Caledonia Group, an advisory shop for the automotive and niche manufacturing industries.

The firm had even higher hopes for a larger fund when it began fundraising in the second half of 2006: Back then, it planned on raising $300 million to $400 million, as previously reported in Buyouts. San Francisco-based Probitas Partners acted as placement agent for the pool.