Platinum’s flagship fund will deploy the firm’s signature M&A&O® strategy.

Platinum Equity, the private equity firm founded in 1995 by billionaire Tom Gores, announced Tuesday the close of its fifth global buyout fund with commitments totaling $10 billion.

The interest in Platinum Equity Capital Partners V can be gauged from the extent of its oversubscription. It had a target of $8 billion and a hard cap of $10 billion.

Platinum Equity: High institutional interest

The fund drew demand from institutions globally, and more than 250 subscribers from 30 countries invested in the fund.

“We have great momentum, with a well-oiled investment machine built on discipline, urgency, and a relentless focus on execution, and fueled by the capital resources to pursue complex transactions anywhere in the world,” said Tom Gores, founder, chairman, and CEO of Platinum Equity.

“Our investment brand is strong and getting stronger, and we have relationships today with some of the largest and most active institutional investors in the world,” said Mark Barnhill, the Platinum Equity partner responsible for leading the capital raise.

M&A&O® Mergers. Acquisitions. Operations.

The new fund will deploy Platinum’s trademarked M&A&O® strategy. The strategy integrates traditional M&A with operational expertise.

“We provide operational insight based on a deep understanding of our portfolio companies’ businesses,” explains the buyout firm on its website. “Throughout the deal, transition, and ownership, our in-house teams apply operational guidance and resources to maximize value.”

For example, Platinum Equity acquired steel distributor PNA Group for $18 million, cleaned up its operations, made savvy acquisitions, and sold the company in 2008 for more than $300 million, not including debt.

More recently, the firm announced in December a $5.3 billion divestiture transaction that will take portfolio company Vertiv public.

In October 2019, Platinum Equity announced the $2.74 billion acquisition of Cision Ltd. The company is a leading global provider of software and services to public relations and marketing communications professionals.

Portfolio

The following characteristics distinguish companies in Platinum’s investment portfolio:

• provide mission-critical products, services, or solutions;
• have established distribution networks; and
• serve blue-chip customers.

Recent acquisitions also include De Wave Group, Iberconsa, Livingston, Orbit Irrigation Systems, Orbit Irrigation Systems, PCI Private Limited, Sigura, and TruckPro.

However, the fund was in the news for the wrong reasons for its $1.6 billion acquisition of Securus Technologies. This company is a leading provider of telephone services to inmates and is notorious for overcharging. Supposedly, rates can exceed a dollar a minute.

Furthermore, activists are demanding reforms at Securus and have even pressed pension funds to stop investing in Platinum Equity.

“I will tell you I didn’t realize that there would be this much headline risk, but these sometimes are opportunities to make a change,” commented Gores on the situation. “I can’t tell you we expected it to be this much work, but sometimes these things land with you and you got to make a difference.”

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