River Associates Launches Fund VI

Firm: River Associates Investments

Fund: River VI LP

Target: $120 million to $150 million

River Associates Investments, a small-market buyout shop based in Chattanooga, Tenn., has kicked off fundraising for its sixth vehicle, River VI LP.

The new fund, with a target of $150 million to $200 million, will be used to buy companies generating EBITDA of $2 million to $10 million in the United States and Canada. River V LP closed with $111 million in 2006.

River Associates, which funds its deals with 40 percent to 45 percent equity, acquires companies in the manufacturing, distribution, industrial services and retail sectors, among others. The firm avoids investments in heavily regulated industries, and also shuns start-up, high-technology, commodity and natural resources companies. River Associates will partner with other funded and fundless private equity groups in certain situations. It also considers add-on acquisitions of any size.

The firm partners with management teams in buyout, recapitalization, family succession and corporate divestiture deals. River Associates has a small group of what it calls “patient capital” limited partners; it can thus be a longer-term partner than many other equity sponsors, according to the firm. George Pettway, an advisory partner, founded River Associates in 1990. The firm has six investment professionals.