Westham Capital Partners will now be aiding WHI Capital Partners in seeking out targets for acquisition.
Richmond, Va.-based Westham helps its stable of clients find platforms and then invests alongside them. Other clients include The Halifax Group, Albion Investors and The Fortress Investment Group.
Eric Cohen, managing partner with Chicago-based WHI, explained that Westham’s connections with mezzanine groups, investment bankers and intermediaries will help it seek out lower and middle market deals, typically between $15 million and $75 million in sales.
“In partnering with them, we agree our marketing will be channeled through them,” he said. Westham will in turn funnel all deals of certain types and sizes to WHI in exchange for a fee and a chance to invest an amount typically, between $500,000 and $1.5 million in the deal.
WHI just recently closed its purchase of Carpenter Special Products Corp., now called Veridiam (See page 24). The firm is backed by a single investor, the Harris family, which founded First Alert alarms and other businesses.
Andy Brusman, co-founder and managing director at three-and-a-half-year-old Westham, said he expects to generate one to two deals each year for its clients.
Westham’s idea is to represent WHI in front of as many potential sellers as possible-Brusman estimated his firm has roughly 1,200 face-to-face meetings per year. With PE firms spending so much time managing a portfolio, it is hard to get the time to source deals, he said.
“We’re out traveling and staying in front of deal sources so the message is in front of them in a more consistent fashion,” said Brusman. “We’re like the outsourced business development team for each of the groups,” he said.
Since WHI is a single source fund, it has few of the normal fund restrictions and is more flexible in how it can structure deals, said Brusman. For example, WHI doesn’t have to exit deals to go fundraise again. Another bonus, said Brusman, is the rare occurrence in lower to middle market funds of a partner with executive credentials, which Cohen has. Cohen was previously CEO of Ampere Automotive.