Quantum Leaps Into PE –

There’s a new firm in town and it’s not wasting any time. Quantum Value Partners LP was founded in August 2002 with $25 million and has already bought four companies under its equipment platform Quantum Equipment LLC. The firm expects to add two more companies to its platform by the end of the year. Additionally, the firm expects to raise funds until next year when its reaches $150 million target.

Quantum Equipment started the buying frenzy with Manitex in December 2002. The Georgetown, Texas-based company designs, manufactures and markets truck mounted cranes for lifting and hauling equipment and materials. Then in July 2003, the platform completed the add-on acquisition of Phoenix Corp. (now called Manitex SkyCrane). Manitex SkyCrane produces truck mounted aerial equipment.

Also in December 2002, Quantum Equipment bought Noble, a Lubbock, Texas-based company that designs, fabricates and assembles lift-trucks, truck mounted forklifts, wheel tractors and mining equipment. In April of 2003, Noble completed the add-on acquisition of Interpipe, a manufacturer of water trucks, fuel and lube trucks and water towers.

All four companies and additional add-ons will be rolled into one. Quantum spent about $30 million to acquire all four firms. The deals’ debt to equity ratio was about 50/50 in all four cases.

Together Quantum’s new companies bring in about $120 million in revenue, which Quantum is expecting to increase to $250 million. Bank of America and Kolmerica, a large bank in Michigan, where Quantum is headquartered, provided the debt on the transactions.

“We would be comfortable growing this business to a little more than double its size. In down cycles we will continue to add-on,” said David Langevin, a managing partner with Quantum. “The exit we are able to make will be relative to the size the company actually gets too, but we should have multiple options. Industrial companies and financial firms are going to show interest in about three to five years.”

The Fund

While there is no definite close date for Quantum’s first fund, the firm expects to have raised $150 million by next year. AA Capital-a Chicago based fund-of-funds, which is mostly made up of pensions-is the firm’s only LP so far.

Headquartered in Warren, Mich., Quantum will invest in manufacturing, services, distribution, industrial equipment and consumer products. Quantum will target later stage, small and middle market industrial businesses and is currently putting together an automotive platform.