ProVen Private Equity has been acquired by its US-based associate, GMA Capital, in a $15 million transaction. The deal has been structured as an acquisition for tax reasons and the creation of an enlarged group will allow ProVen greater geographical scope and increase its fund raising abilities. It will be known as Beringea, the name of a pre-historic land bridge connecting Europe and America. The new company will have funds of $225 million under management.
Having worked closely with GMA Capital and its managing director, Charlie Rothstein, for eight years Gordon Power, CEO of ProVen, said: “It is the right and appropriate time for us to merge.” In September, GMA and ProVen closed Global Rights II, a joint venture fund which raised $64 million to invest in companies with intellectual property rights, brand names, or enabling technology in Europe and the US. The two firms also collaborated to form InvestCare Partners. Malcolm Moss, a ProVen director and managing director of GMA, cemented the relationship and now oversees InvestCare Partners from Michigan.
“The acquisition has bought us additional professionals, a wider investment spread and the capacity to grow our funds,” said Power, who will be executive chairman of the new group. ProVen has been investing since 1984 and since buying itself out of Guinness Mahon in 1998 has quadrupled the size of its funds under management. As well as GMA, ProVen has associates in Helsinki, New York and Los Angeles, with whom it will maintain and consolidate its relationships.
Investing primarily in the UK and US, ProVen focuses on media, brands, enabling technologies and healthcare. It invests up to GBP5 million in established, small- to medium-sized businesses but Power said: “I’d like to see our investment size grow over time.” ProVen’s funds under management total GBP150 million and include the Global Rights Funds I & II, Guinness Flight VCT, ProVen VCT and ProVen Media VCT. Power believes the long term marketplace for VCTs is good and the new group will continue to be active in this sector, although the US, being the larger market, may offer more investment opportunities.
GMA, a private equity and investment banking firm based in Michigan, provides merger and acquisition advice, financing assistance, capital raising and other investment banking services. Rothstein said: “We now have greater depth, an expanded skill set and greater resources for assignments and can benefit from true transatlantic reach. With market conditions as they are, it is more important than ever to investigate multiple markets when attempting to complete an acquisition, divestiture or financing.” GMA manages funds in excess of $65 million, providing growth capital to established companies.