Valor Equity Close To $250M Haul On Fund II

Firm: Valor Equity Partners

Fund: Valor Equity Partners II

Hard Cap: $250 million

Raised To Date: $221 million

Placement Agent: None

Law Firm: Kirkland & Ellis

Valor Equity Partners is poised this month to close on a $250 million second fund, Valor Equity Partners II, which would be twice the size of its first fund, according to a person familiar with the situation.

The Chicago-based LBO firm has already raised $221 million from a combination of institutional investors and family offices, according to our source. The firm began marketing the fund, which has a $250 million hard cap, this spring. Its first fund closed with $120 million in commitments.

A one-time backer of Paypal Inc., the online payment service acquired by Ebay Inc., Valor Equity buys lower-middle market companies operating in a variety specific industries. It positions itself to investors as a firm that combines “value investing with operational activism.”

Recent deals consummated by Valor Equity include the sale of Source Refrigeration & HVAC, a maker of refrigeration systems used by supermarkets and food companies. New York-based Arsenal Capital Partners bought the company for an undisclosed sum in January from Valor Equity and partner Denargo Capital. Companies that remain in the Valor Equity portfolio include Cherry Creek Tree Farms, a tree nursery; Mikohn Signs & Graphics, maker of signs for casino interiors; and Mountain High Resort, a ski resort located 75 miles outside Los Angeles.

Valor Equity CEO Antonio Gracias launched the firm in 2001, having earlier founded private equity firm MG Capital and serving as its chief executive. The chairman is Victor Morgenstern, former co-founder of Harris Associates, a Chicago based investment advisor firm. Michael Dubilier, formerly of Clayton Dubilier & Rice and also managing partner of Dubilier & Co., is a principal of the firm.

The firm did not use a placement agent on the fund. Kirkland & Ellis advises on the fundraising.—M.C.