Veronis Suhler Stevenson has closed its fourth buy-and-build fund at $1.3 billion (€1.0 billion), exceeding their original target of $1 billion.
VSS focuses on investment in the media, communications, information and education industries in North America and Europe. The firm has undertaken a buy-and-build strategy wherein they grow middle-market platform companies both through acquisitions and organically.
James Rutherfurd, Executive Vice President of VSS, said that the fourth fund attracted many new investors, including new partners in Canada, Europe, the Middle East and Asia.
“We were able to differentiate ourselves being a mid-market player during a point in time when there was so much action with the megafunds,” he said. “We’re a lower middle-market fund but we invest in both the US and Europe. We can do this because we’re sector-focused, and we’ve been doing this for a long time.”
“Ours is a sector that has caught a lot of people’s eye,” he added.
The fund has already made seven platform company investments and six add-on acquisitions since the first closing in January of 2005. These initial investments total $230 million of equity capital from the fund.
Those investments include Berliner Verlag, a German regional newspaper publisher; Infobase Publishing, a maker of online and print reference material for school libraries; and Riviera Broadcast Group, a radio broadcaster with stations in Phoenix and Los Angeles.
Rutherfurd said he expects the fund to have a total of around twenty platform companies, with over 100 add-on acquisitions. Other sectors of interest for the fund include business magazines, cable television, outdoor advertising, marketing services and wireless communication towers.
Rutherfurd said the firm’s buy-and-build strategy is particularly well-suited to media companies.
“It’s really how many of the most successful media companies have been built over the past 50 years,” he said. “We probably won’t invest in a company if we thought ‘hey this is a good company, it has good management, but there’s nothing we can add to it.’ We identify lots of add-ons before we even buy the platform.”