Sterling buys sales training company from Leeds Equity

Sterling Investment Partners has acquired Miller Heiman three years after the company was purchased by politically-connected education specialist Leeds.

Sales training company Miller Heiman has switched sponsors with its sale by Leeds Equity Partners to Sterling Investment Partners for an undisclosed sum.

Sterling, which is based in Connecticut, partnered with Miller Heiman chief executive Sam Reese and other members of the company’s management team in the leveraged buyout. Debt financing was provided by GE Antares Capital, Madison Capital and York Capital Partners.

“Everyone from GE to Google to Dell rely on Miller Heiman to train their sales force in sales process and effective selling solutions,” Doug Newhouse, managing partner at Sterling, told PEO. “They have a very skilled and talented management team. It’s kind of like, what’s not to like?”

New York-based Leeds Equity declined to comment.

Miller Heiman provides a range of consulting and training services intended to improve the efficiency and performance of corporate sales teams. The 30-year old company based in Nevada offers workshops, instructor-led seminars, and software-based training modules to a diverse group of client business.

Asked if Sterling was concerned that a general economic downturn might particularly threaten the profitability of a sales-related company like Miller Heiman, Newhouse said the company was well-positioned to withstand such a decline.

“We spent a great deal of time investigating that question,” he said.  “The general conclusion of the research we did…is that in challenging environments companies are more likely to increase their budgets or at least not reduce their budget for sales marketing effectiveness.”

Sterling made the investment from its $500 million fund, closed at the end of 2005. Newhouse said that the fund was roughly 40 percent invested, and that the firm plans to raise a new fund at some point “in the intermediate term”.

He also indicated that the investment was typical for Sterling in terms of size. The firm typically targets middle-market companies with revenues between $50 million and $300 million and a minimum EBITDA of $10 million. Founded in 1991, Sterling manages roughly $1 billion in capital.

Leeds Equity acquired Miller Heiman in 2005 for an undisclosed figure. The education-focussed private equity firm is well-known for its high-profile stable of politically connected advisors, including former Secretaries of Education Richard Riley and Roderick Paige. At one point the firm also boasted former New York City Mayor Rudolph Giuliani as chairman of its advisory board.

The firm was co-founded by Jeffrey Leeds and former Massachusetts governor William Weld and was known as Leeds Weld until Weld left the firm in 2005.  Leeds Equity is currently raising a $1 billion fund, according to Probitas Partners 2008 Private Equity Deskbook. The firm invests in training and business services but is best known for its activity in the for-profit education space.