Pamlico in 2.7x financial services exit

Pamlico Capital has sold commercial equipment finance company GreatAmerica for $95 million, generating a 2.7x return multiple.

GreatAmerica’s management team will buy back the business, which provides financing and consulting services to commercial equipment manufacturers, vendors and dealers. Under Pamlico’s ownership, earnings at GreatAmerica grew by nearly 400 percent, according to the firm. Pamlico first invested in GreatAmerica in 2004 and held the business longer than the typical five-year investment period due to the economic climate in 2009, according to Pamlico managing partner Eric Eubank.

“The bulk of the growth over the eight years has been organic growth by entering into new markets and by taking market share, particularly on the backside of the financial crisis,” he said. “A lot of [competitors] that had credit issues in their portfolios exited the business.”

While Pamlico typically acquires majority stakes in its portfolio companies, the firm’s minority investment in GreatAmerica is part of its growth capital strategy that involves making one to two minority investments per fund.

Pamlico invested from its second fund raised under the auspices of Wachovia Capital Partners, which closed on $1.1 billion in 2007. That fund has since been renamed Pamlico II. The fund focuses on buyouts and growth equities, investing between $15 million to $100 million per transaction.

Pamlico is currently in the market with its third fund targeting $500 million, according to data provider Private Equity Connect.

Formerly Wachovia Capital Partners, Pamlico spun off from Wells Fargo in March 2010. The firm makes growth and buyout investments of up to $100 million alongside management in three sectors: business and technology services, communications and healthcare.