Saunders Karp arm to spin off

In the wake of the Saunders, Karp & Megrue merger with Apax Partners, SKM Growth Investors will light out on its own.

As Stamford, Connecticut-based Saunders Karp & Megrue and the US arm of Apax Partners finalise their merger details, Dallas-based SKM Growth Investors announced Thursday that it will transition into an independent operation. It has been a part of Saunders Karp since 1999.

A spokesperson for Apax said the merger provided the right opportunity for SKM Growth Ventures to become independent, adding SKM Growth Ventures will eventually change its name and that the split was amicable.

Saunders Karp’s current $735 million (€557 million) fund, SKM III, was launched in 2000 and is approximately 75 percent invested. SKM Growth Investors said it will continue to manage the portfolio of investments it has made on behalf of the SKM III fund and will continue to invest the remaining capital allocated to the fund.

SKM Growth Investors focuses on investing in the lower middle-market. The firm plans to continue to focus on sponsoring recapitalizations, growth-capital investments and buy-outs of smaller companies.

Barron Fletcher, SKM Growth Investor’s managing director, said in a statement that they plan on “working closely with our partners from SKM during this transition and after their merger with Apax Partners.”

Fletcher founded the growth investment partnership with Saunders Karp in 1999 to expand into the small-company buyout market. In February 2004, SKM Growth Investments announced the successful realization of hat retailer Hat World. Last month, the firm announced the profitable sale of its investment in WG Energy.