Transitions: Fox Paine Staffs Up, Preps New Fund –

Fox Paine & Co. LLC last month added James Kroner and Wray Thorn to its investment management team and is likely to begin marketing a $750 million fund before the end of the first quarter.

Saul Fox, chief executive of the Foster City, Calif.-based firm, said the additions of the two new members to its now five-member team of principals, reflect the growth of the firm and its need to expand with “mature individuals who come from successful careers.”

Kroner joins Fox Paine as a managing director. He comes from a background of investment banking and mergers and acquisitions, with a focus on the financial services industry and health-care services.

Prior to joining Fox Paine, Kroner was a managing director and co-head of insurance investment banking at J.P. Morgan & Co. He began his investment banking career in 1989 at Merrill Lynch & Co., before moving to Salomon Smith Barney where he was head of the insurance industry M&A practice.

Kroner has worked with principals of Fox Paine for close to a decade as their investment banker, he said. Their caliber and track record drew him to the firm, he said.

“The chance to be part of a firm as it goes through its growth stage was enormously exciting,” he added.

Thorn joins the Fox Paine team as a director.

“I have been involved in the financing, facilitating or sponsoring of LBOs most of my professional career,” he said.

Prior to joining the firm, he was a founding member and principal at Dubilier & Co. for four years. He previously had worked in the acquisition finance department at Chemical Bank.

He said Fox Paine offered an exciting portfolio of companies with which to work. His experience in telecommunications fits well with Fox Paine’s strategy of pursuing investments in that area, he said.

Before the end of March, Fox Paine will begin marketing a second fund that could target approximately $750 million, Fox said.

Fox Paine’s debut fund, which is 85% invested, closed on $508 million in 1998.

In December, Fox Paine financed management recapitalizations of Maxxim Medical Inc., a manufacturer of acute and alternative care medical supplies and its subsidiary, Circon Corp., a manufacturer of endoscopy equipment and supplies. The combined transactions had a value of $820 million, including debt and equity.

In November, the firm made its third investment in the telecommunications industry since May, when it acquired the Watkins-Johnson Co. for approximately $325 million.