Seacoast Closes $150M Mezz Fund III

“The landscape for mezzanine capital in the lower middle market remains very attractive, and we’re seeing a lot of interesting opportunities,” Jeff Holland, a partner in the firm, said in the press release announcing the close. Seacoast said its investor roster included family offices, funds of funds, national and regional banks, and high net worth individuals.

The firm, which has offices in Boston and San Francisco, said the new vehicle, Seacoast Capital Partners III LP, has received a license from the U.S. Small Business Administration to operate the fund as a registered small business investment company. SBICs are regulated so that they invest at the smaller end of the market, but are eligible for financing from the SBIC Funding Corp. Debenture Program, which can leverage the capital 2:1 at a fixed rate for up to 10 years.

Seacoast Capital raised $100 million for each of this fund’s two predecessors, according to the Thomson One private equity database, the first in 1995, the year after the firm’s founding, and the second in 2002. Fund performance data were not available.

Seacoast said it typically provides $3 million to $12 million of debt and equity capital for acquisitions, growth, shareholder buyouts, management buyouts and leveraged recapitalizations. While the firm says it is industry agnostic, its portfolio includes companies in specialty manufacturing, value-added distribution and business services.

Seacoast said it already has two portfolio companies in Fund III, Mountain Alarm Fire Protection Service Corp., based in Ogden, Utah, which serves residential and commercial markets; and FAPS Inc., based in Newark, N.J., a provider of automotive port processing services at the Port of New York and New Jersey.