Woodside buys Lehman stake in investment firm

The Massachusetts- and Connecticut-based firm will hold a 12% stake in National Investment Managers, which buys companies with stable cash flows and high operating margins.

Woodside Capital Partners has bought out Lehman Brothers’ share in National Investment Managers and has increased its total stake in the company to 12 percent.

National Investment Managers is an investment firm and pension administrator which has been growing through acquisitions.

Woodside and Lehman each provided National $6 million in subordinated debt in a $27 million debt package in December 2007. Citizen’s Bank provided $15 million in senior debt.

As part of the agreement, National issued Lehman and Woodside each warrants to purchase millions of shares of common stock at prices ranging from 50 cents to $1.50 per share.

“We are doubling the size of our stake in National Investment Managers …because we are very satisfied with the growth that [National] has shown over the past several quarters,” Daphne Firth, a partner with Woodside, said in a statement.

Since the initial financing from Lehman, Citizen’s and Woodside, the company has acquired California Investment Annuity Sales, Kanter & Associates, Pension Technical Services and Alaska Pension Services.

Lehman Brothers filed the largest ever US bankruptcy in September after the federal government declined to bail out the investment bank. Since the filing, the company has been selling off its various segments, including parts of its private equity business.

Woodside invests in the debt or equity of mid-sized companies with revenues from $15 million to $150 million. The firm looks for deals ranging in price from $2 million to $20 million of debt or equity and purchases pools of distressed loans.

The firm focuses on manufacturing, media, distribution and service companies and its professionals have experience liquidating troubled portfolios and companies.