Tom Hicks notches inaugural buyout for family office

Hicks Muse Tate & Furst co-founder Thomas Hicks is staying active in retirement, having just completed the first corporate acquisition for his family office, Hicks Holdings.

Don’t imagine that Hicks Muse Tate & Furst co-founder Thomas Hicks has set aside his deal-making hat – the Texas buyout ace has inked a new deal, his first as part of Hicks Holdings, the private investment office of the Hicks Family.

Hicks acquired Ocular LCD, a manufacturer of liquid crystal displays, modules and systems used in technology such as cell phones. No deal terms were disclosed.

Tom Hicks moves back into buyouts

A spokesman for Hicks noted that he wants to be careful to distinguish his new investment platform, Hicks Holdings, from a private equity “firm”. He noted that there is a professional staff, headed by Tom Hicks and Joe Armes, but Hicks Holdings primarily uses family money and there will be no plans to raise a separate fund.

Hicks launched Hicks Holdings earlier this year to house select family investments, such as professional sports teams Texas Rangers Baseball Club and Dallas Stars Hockey Club, in addition to investments in real estate. The acquisition of Ocular, he said, represents a move by his family back into buyouts.

In acquiring Ocular, Hicks noted that the acquisition was more a case of the sellers seeking him out than Hicks Holdings canvassing the market for deals. He told PEO, “When you’ve been around the acquisition market as long as I have, you gain quite a few relationships. In this particular case, somebody called and brought this deal to us, and it really hit a chord.”

Buyouts will represent one leg on the stool for Hicks Holdings, which will also continue to focus on real estate and sports teams.

However, Hicks’ strategy as a family-office investor will differ somewhat from his days operating out of a buyout shop. For one, there is no rush to put capital to work. He noted that the family will look to make as many as two investments per year, adding, “But if we don’t find one, that’s fine too.”

Another notable difference is that once Hicks makes an investment, there won’t be an artificial timeframe under which he’ll need to book a return. “In recent years, the buyout industry has shortened its holding period to between two and three years. What I’m trying to do is really build companies and do that over the long term. Our holding periods could range as long as five to 10 years,” he said.

Hicks will be buying companies that range in size from $50 million in enterprise value to “a couple hundred million dollars”, and for larger deals, Hicks will call on his industry contacts as possible co-investors. 

Hicks was a co-founder of Hicks Muse Tate & Furst, and had served as chairman of the firm until January of this year. His departure came amid a shakeup at the Dallas buyout group that also saw the its European arm branch off to become Lion Capital. The retirement of Hicks and the Lion Capital spinout, however, were not related.