- Why this is important: Family office partners with independent sponsor to close first acquisition
- Whom to contact: Ian Smith (firstname.lastname@example.org)
Hillcrest Holdings, the holding company for the Midwest-based Smith family, has acquired Converged Security Solutions, its first investment outside of its traditional trucking business.
Hillcrest partnered with independent sponsor Akoya Capital on the deal.
Herald and Miriam Smith started Cedar Rapids Steel Transport out of a refurbished chicken coop in 1955. From there Cedar Rapids, or CRST International as it was renamed, grew into one of the country’s largest transportation companies, with revenue currently exceeding $1 billion.
Hillcrest Holdings was incorporated in 2012 to invest the family’s capital in direct investments, including real estate.
The investment committee is composed of second-generation John Smith, who is chairman of CRST International, his son Ian Smith, and son-in-law Jonathan Howgate.
(See a profile of Hillcrest in our Family Office Database here.)
The holding company plans to make two investments a year. One would be with an independent sponsor or family office, Howgate said in an interview with Buyouts.
“We are not moving away from our main transportation business, but cautiously exploring targeted investments to diversify our portfolio,” he said.
Hillcrest is looking for investments in companies with enterprise values between $25 million and $150 million, Howgate added.
The company is sector-agnostic but will avoid anything it considers very risky, such as oil and gas and biotech, he said.
Ian Smith noted: “As a general rule we won’t invest in venture capital, unless it had potential ties to our trucking business.”
Howgate said the acquisition of Converged Security Solutions is a good example of how Hillcrest wants to structure its direct investments.
CSS was formed by merging Evolver, an IT consulting and technology firm, and eVigilant, which provides IT and security solutions. The new entity will provide end-to-end solutions to help customers quantify, assess and manage threats and risks to their businesses.
Hillcrest worked with Akoya Capital on the deal because of its knowledge of the cybersecurity sector and because it had a strong focus on building an experienced management team, Howgate said.
For its part, Hillcrest provided patient capital and is a supportive partner, he said.
Action Item: Contact Ian Smith at +1 319-775-0426 or email@example.com.