Private Equity

Overview

Harbert Private Equity Fund III, L.P. (“HPEFIII” or the “Fund”) is a lower middle market private equity fund sponsored by Harbert Management Corporation. The Fund’s strategy is simple – leverage our capital, wealth of resources and deep investment experience to maximize the value of businesses in which we invest. In partnership with the management teams we back, we strive to achieve compelling investment returns by enhancing company growth. HMC and its affiliates have been involved in the management and growth of privately-held companies for more than 50 years and have developed a reputation in the marketplace for success and integrity.

 

Investment Team

Michael D. Luce
President & Chief Operating Officer

Mike Luce

Mr. Luce joined HMC in 1995 and serves as President & COO. Before joining the firm, Mr. Luce worked with Bear Stearns & Company, where he served as a member of the Commitment Committee, Chairman of the Equity Committee, and as a Senior Managing Director in the New York office. While with Bear Stearns, Mr. Luce primarily focused on mergers, buyouts, and debt and equity transactions for public and private companies. He serves on the Investment Committee for the Community Foundation of Greater Birmingham and on the Board of Directors of Dent-A-Med, Inc., Precision Alloys Corporation, STX Healthcare Management Services, Inc., CES Holding Company, Inc., United Way of Birmingham, Children’s Harbor, and Alabama School Readiness Alliance. Mr. Luce holds a BBA from the University of Miami and a Masters of Business Administration from the University of Michigan.

 

David P. Crosland
Managing Partner

dcrosland

Prior to joining HMC in May 2013, Mr. Crosland was co-managing partner of Atlanta Equity Investors, LLC, a middle market growth equity and buyout fund. Prior to Atlanta Equity Investors, Mr. Crosland was a founding partner of Arcapita Inc., which became a major private equity firm in the Southeast during his tenure. He began his private equity career with Investcorp International, Inc., based in New York. Prior to Investcorp, Mr. Crosland worked at Morgan Stanley & Co. in the firm’s Mergers and Acquisitions department and Manufacturers Hanover Trust Company in the Energy Division.

Mr. Crosland is Vice Chairman of the Board of Atlanta Ballet and on the Board of Directors of STX Healthcare Management Services, Inc. and CES Holding Company, Inc. He earned a Bachelor of Arts degree, magna cum laude, from Duke University and an MBA from Harvard Business School.

 

Steven P. McGrath
Principal

smcgrath

Mr. McGrath joined HMC in June 2013. His ca­reer spans private equity, mezzanine lending, transaction advisory, management consulting and operating experience. Before joining HMC, he was a Principal with Atlanta Equity Inves­tors, LLC, a middle market growth equity and buyout fund. Prior to Atlanta Equity Investors, Mr. McGrath worked with the private invest­ment group, Liberty Lane Partners. Prior to Lib­erty Lane, he gained investment banking and mezzanine lending experience at Royal Bank of Canada and Chatham Capital, respectively. Mr. McGrath’s early career included experience with Andersen Consulting (Accenture) and two technology start-ups.

Mr. McGrath is on the Board of Directors of STX Healthcare Manage­ment Services, Inc. He earned a Bachelor of Arts in Economics and a mi­nor in History from Miami University (Ohio) and an MBA, with honors, from the Goizueta Business School at Emory University.

Raymond J. Harbert Jr.
Director of Finance and Administration

Raymond J. Harbert Jr.

Mr. Harbert joined HMC in 2010 as an Associate. Prior to joining HMC, he was an Associate in the Transaction Services Strategy Group of PricewaterhouseCoopers, focusing on buy side commercial due diligence. He holds a Masters of Business Administration and a BS in Finance, both from Wake Forest University where he was a letter winner on the track team.

Mr. Harbert is currently the Grant Committee Chairman of the Harbert Employees Reaching Out (HERO) Foundation. He also serves on the Junior Board of Directors for the Birmingham Zoo and Young Executive Board of The Club.

 

Matthew R. James
Senior Associate

mjames

Mr. James joined HMC in 2013 as an Associate. He was formerly a Senior Analyst at Fidus Partners, a boutique investment bank focusing on sell-side mergers and acquisitions. Prior to his investment banking experience, Mr. James was a Senior Analyst with a multi-business holding company developing startups in the financial services sector. He holds a Master of Arts degree in Management and a Bachelor of Arts degree in History, both from Wake Forest University.

Gregory O. Irons
Associate

G.Irons.234

Mr. Irons joined HMC in 2014 as an Associate. He was formerly a Senior Analyst at SunTrust Robinson Humphrey in the Technology & Services investment banking group, where he focused on mergers and acquisitions advisory and debt and equity capital raises for companies in business services, financial technology and software sectors. He holds a Bachelor of Business Administration degree in Finance from Emory University’s Goizueta Business School.

Investment Criteria

Each situation is unique. We work with business owners and management to structure a partnership aimed at achieving all of our collective goals and objectives.

Target Industries

  • Business services
  • Financial services
  • Software
  • Technology-enabled manufacturing
  • Health care services

Excluded Industries

  • Restaurants/retail
  • Natural resources producers
  • Construction and construction-related businesses

Financial Parameters

  • Revenue of $10 million – $100 million
  • EBITDA of $2 million – $10 million
  • Potential for 10%+ EBITDA margins
  • Existing/near-term double-digit company growth
  • High, single-digit industry growth; sustainable growth drivers

Operating Model

  • Scalable infrastructure
  • Defensible competitive advantages
  • Generally asset-light
  • Transformative inflection point
  • Footprint within Southeastern, Central and Eastern U.S.

Transaction Characteristics

  • Equity checks up to $15 million
  • Buyout/growth equity/non-control investments (selectively)
  • Conservative to moderate leverage
  • Favor owner/operator partnerships
  • Growth driven investment returns

 

Portfolio

Harbert Private Equity Fund III, LP

 

 

CentralCES HOLDING COMPANY, INC.

Oilfield and environmental services company d/b/a Central Environmental Services for exploration and production companies in West Virginia, Ohio, and Pennsylvania

Acquired March 2014
Washington, WV

 

flightdisplayFLIGHT DISPLAY SYSTEMS

Designer, developer, and light manufacturer of cabin avionics for commercial business jets, and customized/ruggedized displays and solutions in the military intelligence, surveillance and reconnaissance market.

Acquired November 2014
Alpharetta, GA

Harbert Private Equity Fund II, LLC

 

DENT-A-MED, INC.

Private label credit card company d/b/a Dent-A-Med for consumers with near or sub-prime credit histories

Acquired December 2006
Springdale, Arkansas

 

PRECISION ALLOYS CORPORATION

Stainless Steel Processor and distributor producing flat-rolled, stainless steel precision strips and coils for OEMs

Acquired August 2007
Dallas, Texas

 

STX HEALTHCARE MANAGEMENT SERVICES, INC.

Dental practice management company providing services to dental practices across Texas and Alabama

Acquired December 2009
Irondale, Alabama

 

COMMUNITY HOSPICES OF AMERICA

Hospice management company formed by HPEF II to consolidate the highly fragemented hospice market

Exited November 2006

 

WINNERCOMM HOLDINGS, INC.

Media and content production, advertising sales and rights management, as well as aerial camera systems

Exited May 2008

 

TSF HOLDINGS, INC.

Manufacturer of expanded polystyrene (EPS) products that are used in packaging and construction applications

Exited October 2008

 

CHILD HEALTH HOLDINGS, INC.

Provider of prescribed pediatric extended care, home nursing, home medical equipment, and an infusion pharmacy, all specializing in medically-fragile children

Exited September 2011

 

Presidential FinancialPFC ACQUISITION COMPANY, INC.

Asset based lender focused on small business loans ranging from $250,000 to $2,000,000 primarily for working capital needs

Exited March 2013

 

Preferred Warranties, Inc.PWI HOLDINGS, INC.

Consumer finance and insurance company underwriting and administering vehicle service agreements and offering sub-prime auto loans through dealerships

Exited May 2013

 

Travis TrailerTBT HOLDING COMPANY, INC. D/B/A TRAVIS BODY AND TRAILER, INC.

Manufactures aluminum specialty dump-body trailers used in a wide variety of applications, including construction, agriculture and municipal solid waste

Exited August 2013

 

ONWARD BEHAVIORAL HEALTH, INC.

Behavioral health company operating an 20 bed residential treatment facility program for eating disorders and 33 outpatient behavioral health sites that treat patients with a variety of substance abuse and psychological issues

Exited May 2014

Harbinger Private Equity Fund I, LLC

THE VISADOR COMPANY

Manufacturer of Custom Wooden Stair Parts
Exited February 2003

 

 

NATIONWIDE HOMES, INC.

Manufacturer of Modular Homes
Exited June 2002

 

NATIONAL SPECIALTY CLINICS, INC.

Healthcare Provider
Exited December 2003

 

HECKETHORN MANUFACTURING COMPANY, INC.

Tier II Automotive Parts Manufacturer
Exited March 2004

 

KEYS GROUP HOLDINGS, LLC

Education and Healthcare Services Company
Exited October 2005

 

UNITY COMMUNICATIONS

Paging and Telecommunications Company
Exited December 2002

 

Contact
HARBERT PRIVATE EQUITY

One Buckhead Plaza
3060 Peachtree Road NW
Suite 885
Atlanta, Georgia 30305
Contact:
Matthew R. James
Associate
mjames@harbert.net
404-760-8342