When Chicago's GTCR Golder Rauner agreed to sell portfolio company Polypore to Warburg Pincus last month for $1.1 billion (€880 million), partners at the Windy City buyout firm were full of praise for Jerry Zucker.
Zucker owns InterTech Group, a South Carolina private holding company that was GTCR's investment partner on the deal as well as the chief engineer of Polypore's hugely successful roll-up strategy.
Polypore is a combination of three microporous filtration products companies, the first of which was purchased in 1994 with just $15 million in equity. Ten years – and zero additional equity dollars – later, InterTech and GTCR sold out to Warburg Pincus for a serious profit.
Zucker has been given most of the credit for integrating the three companies. His specialty is non-woven fabrics, and he built Polypore into a major supplier of such fabrics for makers of batteries.
But under his watch, Zucker has also seen a similar company come apart at the seams. He used to be the president, CEO and chairman of South Carolina's Polymer Group, which makes fabrics used in medical and hygienic products. Due largely to a bad technology bet, publicly traded Polymer filled for bankruptcy in 2001 and emerged a year ago with new owners – New York distressed specialists MatlinPatterson. Zucker resigned to spend more time with InterTech.
In fact, GTCR was an investor in Polymer, too. Luckily, the firm, which backed the company alongside Zucker in 1993, was able to eke out a profit before Polymer went bust.
General partners place supreme importance on the talents of portfolio company managers, who they rightly say are the most important factor in the success of an investment. But as this tale of two Polys shows, great managers are capable of strike-outs as well as homeruns.
BELVEDERE HIRES NEW PRESIDENT
San Francisco-based private equity firm Belvedere Capital Partners is hiring Gary Gertz as president. Gertz will join the firm during the second quarter of 2004. He currently serves as the president and chief executive officer of the California Bankers Association, a position he has held since 1999. Belvedere currently has total banking assets of approximately $1.5 billion (€1.19 billion) and specialises in community banking in California.
QUADRANGLE PROMOTES TWO
The New York-based media and distressed debt specialist announced that Michael Huber and Christopher Santana have been promoted to managing principals. Huber joined Quadrangle as vice president in June 2000 with a background in the media and communications industry. Previously, he had served as vice president in the media and communications group at Lazard. Santana arrived at Quadrangle as vice president in March 2002. He specialises in distressed debt and will continue to work for the Quadrangle Debt Recovery investment program. Before Quadrangle, Santana was a vice president at Lazard and the head trader of the Lazard Debt Recovery Funds.
BAIRD APPOINTS HEALTHCARE PRINCIPAL
Milwaukee, Wisconsin-based Baird Venture Partners (BVP), the venture capital arm of middle-market investment bank Robert W. Baird & Co., named Peter Shagory a principal in the firm's Chicago office, where he will lead the firm's life sciences activities. Prior to joining Baird, Shagory was a vice president at Vector Fund Management. This past December, BVP closed its latest fund on $100 million (€79 million) and is continuing early- to late-stage investing with an affinity to companies located in Wisconsin and the Midwest.
TA ASSOCIATES HIRES PRINCIPAL
The Boston-based firm has hired Michael Berk, a former vice president at JLL Partners, to focus on LBOs and recapitalizations in the consumer, financial services and business services sectors. Prior to JLL, Berk was an associate at Frontenac.