The St. Davids, Pa.-based lower mid-market buyout firm will likely close the fund near its hard cap of $240 million, says the source. The firm recently held a third close at $174 million, according to a regulatory filing. The fund is targeted at $200 million.
The firm raised $120 million for its second fund, which closed in 2005. Though considered the firm’s third fund, the latest effort is its second pool funded by institutional investors, including the Pennsylvania Public School Employees’ Retirement System and Parish Capital Advisors.
Milestone invests between $5 million and $25 million in deals valued between $15 million and $100 million. It prefers companies with a three-year track record of profitability.
The firm invests in manufacturing, distribution, natural and organic products and service sectors. Milestone typically holds companies between four and seven years.
The firm has been on a bit of tear this year, even as many other firms have curtailed deal-making given the credit crunch and market conditions. Milestone has made five investments, including three out of fund III in June, including Safemark Systems, an Orlando, Fla.-based company that provides in-room safes and locking systems to hotels; Café Enterprises Inc., a Taylors, S.C.-based owner of a restaurant chain; and Global Connection Inc., an Atlanta, Ga.-based company that provides pre-paid telephone services. —Bernard Vaughan
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