Platinum Equity
Encyclopedia
Platinum Equity, LLC is a private equity
Private equity
Private equity, in finance, is an asset class consisting of equity securities in operating companies that are not publicly traded on a stock exchange....

 investment firm founded by Tom Gores
Tom Gores
Tom Gores is an American billionaire with an estimated current net worth of $2.4 billion dollars. He appears on the Forbes list of 2011 World's Billionaires. On June 1, 2011 he became the owner of the Detroit Pistons.-Biography:...

 in 1995. The firm focuses on leveraged buyout
Leveraged buyout
A leveraged buyout occurs when an investor, typically financial sponsor, acquires a controlling interest in a company's equity and where a significant percentage of the purchase price is financed through leverage...

 investments of established companies in the U.S. and Europe.

Platinum Equity is headquartered in Beverly Hills, California with regional offices in Boston, New York and London. Top business publications have recognized Platinum as one of the most important private companies in America. In 2010, Platinum Equity was recognized as one of the largest and fastest growing private companies in America by ranking #31 on Forbes’ Largest Private Companies list for 2010 and #1 on the 2010 Los Angeles Business Journal list of LA's Largest Private Companies.

The firm has a diversified capital base that includes the assets of its portfolio companies, and capital commitments from institutional investors in the firm's private equity fund vehicles, Platinum Equity Capital Partners and Platinum Equity Capital Partners II. Institutional investors in the fund vehicles include a diverse cross section of public and private pension funds, insurance companies, endowments and family offices in North America, Europe and Japan.

History

Platinum Equity was founded in 1995 by Tom Gores
Tom Gores
Tom Gores is an American billionaire with an estimated current net worth of $2.4 billion dollars. He appears on the Forbes list of 2011 World's Billionaires. On June 1, 2011 he became the owner of the Detroit Pistons.-Biography:...

. Platinum Equity’s first acquisition was LSI, a company that generated computer graphics to re-create accidents for courtroom testimony. Tom Gores
Tom Gores
Tom Gores is an American billionaire with an estimated current net worth of $2.4 billion dollars. He appears on the Forbes list of 2011 World's Billionaires. On June 1, 2011 he became the owner of the Detroit Pistons.-Biography:...

 purchased LSI for $200,000, then focused on servicing existing customers and returning the company to profitability.

Over the next five years, between July 1996 and September 2001, Tom Gores
Tom Gores
Tom Gores is an American billionaire with an estimated current net worth of $2.4 billion dollars. He appears on the Forbes list of 2011 World's Billionaires. On June 1, 2011 he became the owner of the Detroit Pistons.-Biography:...

' wholly owned fund (Platinum Equity, LLC) made 32 acquisitions with $226 million, and realized $940 million on those investments. These acquisitions included a call center (Foresight Software), networking gear (Racal
Racal
Racal Electronics plc was once the third-largest British electronics firm. Listed on the London Stock Exchange and once a constituent of the FTSE 100 Index, Racal was a diversified company, offering products including: as voice and data recorders; point of sale terminals; laboratory instruments;...

 Electronics), and voice and data service (Williams Communications). BusinessWeek
BusinessWeek
Bloomberg Businessweek, commonly and formerly known as BusinessWeek, is a weekly business magazine published by Bloomberg L.P. It is currently headquartered in New York City.- History :...

 ranked Platinum Equity number 10 on its 1999 list of the country’s top 20 private IT organizations, based on 1998 revenues. Throughout these early years, Tom Gores
Tom Gores
Tom Gores is an American billionaire with an estimated current net worth of $2.4 billion dollars. He appears on the Forbes list of 2011 World's Billionaires. On June 1, 2011 he became the owner of the Detroit Pistons.-Biography:...

 broke many private equity rules including specializing in the tech sector and using his own money as equity, and leveraging against it.

During this same time period of acquisition growth, nine of the eleven current partners joined the firm. These partners include Johnny Lopez (1995), David Anglin (1996), Robert Joubran (1996), Phil Norment (1997) and Brian Wall (2000). Additionally, several partners joined through key acquisitions starting in 1999 with Robert Wentworth during the acquisition of Alden Electronics’ operating assets. Then through the acquisition of Pilot Software from Cognizant Corporation in 1997 Rob Archambault, John Diggins and Eva Kalawski joined the firm.

The firm’s first fund, Platinum Equity Capital Partners, was raised in 2004 and had a 62.5% net internal rate of return as of June 30, 2009. This stellar track record played a role in the firms's second fundraise, Platinum Equity Capital Partners II, which closed in September 2008 despite uncertainty in the financial markets. For Platinum Equity Capital Partners II, the firm initially sought a $1.5 billion leveraged buyout fund and nearly doubled it by raising $2.75 billion.

In 2009, during the financial crisis, Platinum Equity acquired 14 companies in the first 11 months of 2009, eight of them full buyouts. This acquisition activity put it among the most active private equity firms through 3Q 2009.

In November 2011, Platinum Equity has bought image sensor business from Kodak which short on cash. The price was not disclosed, but prediction was about $100-200 million.

Investment Strategy

The firm employs an investment strategy that it has trademarked, "M&A&O", which integrates traditional M&A with operational expertise. Throughout the transaction, transition and ownership, the firm’s in-house teams apply operational guidance and resources in order to maximize value. This unique strategy means the firm often acts more like a strategic buyer of companies than a financial buyer. After an acquisition, Platinum Equity often invests in additional businesses, equipment, people and facilities that give its holdings a stronger position for the long haul.

Investments

Since 1995, Platinum Equity has acquired over 115 businesses across a broad array of industries, including information technology, telecommunications, logistics and distribution, industrials, manufacturing, media, real estate and automotive. Those acquisitions represent more than $27.5 billion in aggregate annual revenue at the time of acquisition.
  • Information Technology – In October 2004, the firm completed the acquisition of CompuCom Systems, Inc.  which was one of the largest public-to-private transactions in 2004. Then, in December 2004 the company acquired General Electric
    General Electric
    General Electric Company , or GE, is an American multinational conglomerate corporation incorporated in Schenectady, New York and headquartered in Fairfield, Connecticut, United States...

    ’s IT Solutions division. The merger brought CompuCom to $1.7 billion in annual revenue and more than $500 million in services. The business was sold to Court Square Capital Partners
    Court Square Capital Partners
    Court Square Capital Partners is a private equity firm focused on leveraged buyout transactions. Court Square was originally a captive private equity firm within Citigroup known as Citigroup Venture Capital Equity Partners...

     in 2007.

  • Logistics and Distribution - In 2002, Platinum combined Health Care Products, a division of Royal Philips Electronics, and Diagnostic Imaging, a subsidiary of PSS World Medical
    PSS World Medical
    PSS World Medical, Inc. is an American distributor of medical products, equipment, billing services and pharmaceutical related products to non-hospital healthcare providers. In 2008, the company celebrated its 25th year in business and was named to Forbes 400 Best Big Companies list for the second...

     into a single company called SourceOne Healthcare Technologies. Both companies were distributors of radiology products like film, chemicals and lead shields. Together, they had $1.3 billion in revenue, making SourceOne dominant in the very fragmented $11.5 billion marketplace in which it competed. Merry X-Ray acquired SouceOne Healthcare Technologies from Platinum Equity in November 2005.

  • Industrials – PNA Group, a metals processor, was acquired in May 2006 from TUI AG
    TUI AG
    TUI AG is a German multinational travel and tourism company headquartered in Hanover. Until 2001 it was an industrial and transportation company named Preussag AG, which in the mid-1990s decided to reinvent itself as a tourism, shipping, and logistics company...

    . At the time of acquisition, PNA included three companies. While in Platinum Equity’s portfolio PNA gained a seasoned metals CEO, Maurice S. Nelson, Jr. and added three locations. Platinum Equity sold PNA Group to publicly traded Reliance Steel & Aluminum Co.(NYSE: RS) in August 2008 for $300 million. The purchase price, together with the $181 million in accumulated profits, represented 27 times Platinum’s original investment of $17.5 million just two years earlier.

Current Portfolio of Companies

  • 3B The Fibreglass Company (2008)
  • Acument Global Technologies (2006)
  • AEES (2009)
  • Alliance Entertainment
    Alliance Entertainment
    Alliance Entertainment, LLC is a distributor of music, movies, and game software. From 1995 through 2005, Alliance Entertainment was also the parent company of All Media Guide. In 2005, it merged with Source Interlink. Platinum Equity and the Gores Group acquired Alliance in 2010....

     (2010)
  • Americatel Corporation (2006)
  • Canvas Systems (2009)
  • Contego Packaging Group
  • Data2Logistics (2002)
  • DCA Services (1997)
  • Geesink Norba Group (2009)
  • iET Solutions (2003)
  • Image Sensor Solutions (2011)
  • International Offshore Services (2009)
  • Keystone Automotive Operations (2011)
  • Matrix Business Technologies
    Matrix Business Technologies
    Matrix Telecom, Inc., operating as Matrix Business Technologies, Trinsic, Powered by Matrix, Excel Telecommunications and various other niche brands is a United States telecommunications firm that provides voice and data services to consumers and small and medium businesses as well as...

     (1999)
  • Maxim Crane Works (2008)
  • MegaPath (2010)
  • Palace Sports and Entertainment
    Palace Sports and Entertainment
    Palace Sports & Entertainment ' is a sports and entertainment company owned by Tom Gores.The company owns the Detroit Pistons of the NBA...

     (2011)
  • PBH Marine Group (2010)
  • PEAK Technologies (2005)
  • Pomeroy (2009)
  • Quark, Inc.
    Quark, Inc.
    Quark, Inc. is a privately owned software company best known for QuarkXPress. It is called Quark because the company's goal is to "create software that would be the platform for publishing", just as quarks are the basis for all matter.As of August 2011, Quark's offerings include:* QuarkXPress -...

     (2011)
  • Ryerson, Inc.
    Ryerson, Inc.
    Ryerson, Inc. is a metals distributor and processor founded in 1842. A subsidiary of Inland Steel until 1996, it became an independent company in 1999 as Ryerson Tull, Inc. The company adopted its current name in 2006 and is headquartered in Chicago, Illinois...

     (2007)
  • Schutt Sports (2010)
  • SCM Metal Products, Inc. (2008)
  • The San Diego Union-Tribune
    The San Diego Union-Tribune
    -Predecessors:The predecessor newspapers of the Union-Tribune were:* San Diego Sun, founded 1861 and merged with the Evening Tribune in 1939.* San Diego Union, founded October 10, 1868.* Evening Tribune, founded December 2, 1895.-Ownership:...

     (2009)
  • Turf Care Supply Corp. (2005)
  • Eco Broker Platinum (2007)
  • Ulticom (2010)
  • USRobotics (2005)
  • Vanguard Networks (2001)
  • Wheel Pros, Inc. (2008)

External links

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