Jeff Rich, former CEO of Affiliated Computer Services (NYSE: ACS), and Todd Furniss, former president of the Everest Group, have partnered to form a new private equity firm focused on the IT-enabled business services sector.
The Dallas-based effort, named
The PlumTree co-founders have not yet decided on whether they will raise a formal fund, operate as a fundless sponsor backed by local family offices or become an investment holding company for a large corporation that has expressed interest. However, the firm expects to invest between $25 million and $50 million of equity in about four deals per year.
If PlumTree were to pursue a formal fund structure, that would work out to about a $250 million target.
“Our goal is to lead transactions,” Furniss says. “There may be instances where we get asked to play a different role due to our operational capabilities, but that would be more the exception than the rule.”
He adds that the current credit environment likely means that PlumTree will over-equitize some of its early deals, and that he and Rich have already looked at about 120 opportunities.
“We’re getting ready to move into diligence on a couple of things.” he says.
A PE firm launch in today’s environment seems dubious, but PlumTree has big-name experience on its side. Rich began his career as an LBO banker for Citi in the 1980s, before getting recruited by ACS to be its CFO. At the time, ACS was doing about $290 million in revenue. Rich was soon promoted to COO and then eventually became CEO. By the time he resigned in late 2005, the company had about $5.5 billion in revenue, and Rich had been instrumental in about 80 acquisitions by the company.
Furniss began his career as a corporate lawyer and then joined EDS, where his last job was running Asia M&A strategy. He left EDS in 2001 to join Everest Group, a consulting firm that advises buyers and sellers of IT-enabled services. Furniss says that he envisioned Everest mimicking the evolution of Bain & Co., another consulting firm that spawned private equity powerhouse
The next day, he and Rich formed PlumTree.
PlumTree plans to add at least one more senior investment pro within the next six months, and envisions a staff of up to 15 people. It also would like to open an office in, or around, Delhi, India.