They consider themselves methodical middle-market buyers with an eye for the undervalued asset. But the partners of LBO shop
Take for example the term they coined: “Jammbop.” The Jammbop is not a dance move that private equity firms do after winning a deal. It actually stands for “Just Another Middle Market Buyout Operating Partner.” The word is a riff on “Just Another Middle Market Buyout Group,” or “Jammbog.”
Larry Mock, the founder of Mellon Ventures, now Navigation Capital, said part of his firm’s strategy is to ensure it avoids Jammbops. The firm has two operating partners, O.G. Greene, the Chairman and CEO of Skylight Financial, and Craig Kirsch, former CFO of Kinko’s. From the outset, Navigation Capital makes it clear to the companies it intends to buy that there’s going to be an operating partner mentoring their CEOs heavily, and not just during board meetings.
When it comes to the involvement level of operating partners, “Our proactive approach is clearly delineated,” said Mock. (Incidentally, the fact that it doesn’t staff Jammbops is one reason that Navigation Capital believes it is not a Jammbog.)
Navigation Capital is the new name for the old Mellon Ventures growth and buyout team. As part of a change to its corporate strategy, Mellon Financial recently shut that division down. The Goldman Sachs Vintage Funds, a secondary and primary fund which is part of the bank’s private equity group, bought the portfolio of 34 companies, most of which have between $25 million and $125 million in sales and are located in the Southeast, Midwest and Mid-Atlantic.
In addition, Goldman Sachs has made a $125 million anchor commitment to Navigation Capital’s latest partnership, Navigation Capital Partners IV, which is targeting $225 million and will likely close by the end of the summer, said a person familiar with the matter. The firm hasn’t begun talking to other potential limited partners yet.
Creative as they are, the members of Navigation Capital’s investment team did not make up their own name. They had to buy it for $10,000 from a former Mellon Ventures partner who had used it as the name for a bank, said Mock.
Not unexpectedly, Mock describes his firm’s two main strategies for portfolio companies in nautical terms. The first is called “charting the course.” It’s for companies that are already heading in the right direction, and just need a push from Navigation Capital to help them accelerate. The second is called “two degrees off.” That’s for companies that are slightly underperforming. Navigation Capital is there to right the ship.