Palladium Launches Fund, Grows CD Case Co. –

Palladium Equity Partners last month began marketing a $325 million fund, its first blind-pool effort since the firm was formed in 1997 by a group of ex-Joseph Littlejohn & Levy partners.

Partners at Palladium declined comment on the fund. A source close to the firm said the fund already has at least one committed investor, a bank, and that Palladium likely will continue its strategy of investing in the manufacturing and automotive parts industries with the new vehicle.

Since departing from Joseph Littlejohn, Palladium, based in New York and headed by Marcos Rodriguez, has drawn capital from a group of undisclosed institutional and individual investors on a deal-by-deal basis (BUYOUTS March 10, 1997, p. 4). The firm has targeted equity investments of between $30 million and $60 million.

Closes In on CD Case Market

The next compact disk you buy likely will put money in Palladium’s pockets, which, with its two most recent acquisitions, now has a majority share of the CD “jewel case” market.

Earlier this month, Mediapak Corp., a CD case platform established by Palladium in February, acquired Alpha Enterprises and Joyce Molding Corp. for a total of $299 million, raising the amount of equity Palladium has invested in the platform to $92 million.

Fleet Bank and Deutsche Bank led a syndicate of banks that provided senior debt. Equity co-investors include Fleet Equity Partners, J.P. Morgan Capital Corp. and First Dominion Capital.

Mediapak, based in Atlanta, was formed through the merger of Atlanta Precision Molding B.V. and Europe Precision Molding B.V., both subsidiaries of Mitsubishi Corp. (BUYOUTS Feb. 22, p. 20). The recent acquisitions were particularly smooth, according to Christy Sadler, a Palladium general partner, because shareholders at Joyce Molding already had expressed a desire to merge with the Mitsubishi divestitures during Palladium’s negotiations with the divisions. The combined company now has annual revenue of approximately $250 million.

Mediapak makes the plastic cases and trays that house CDs, as well as packaging for VHS tapes and DVD discs. Sadler said his firm is not concerned about the rise of music and media downloaded from the Internet, because such music eventually gets “burned” onto recordable CDs, for which Mediapak makes cases.

The company has one manufacturing plant in Europe and seven in the U.S. Sadler said Palladium first will concentrate on expanding the company’s business in Europe, then may expand into Asia and South America.