Shedding Light on the Entrepreneur/Private Equity Relationship
The ingredients for a healthy and sustained economy are rather straightforward.
Entrepreneurs who have a vision and a commitment to hard work align with sources of experienced capital to address the needs of customers in a stable and growth oriented market.
Two out of the three drivers of growth took the stage last month for a panel discussion hosted by ACG National Capital at the McLean Hilton in Tysons Corner, Virginia. Entitled “Spotlight on Private Equity,” the top line speakers included:
Phil Nolan, Chairman, CEO and Co-Founder, Galeos Group: This type of organization is often referred to as a platform company. Nolan has recruited an experienced leadership team and has $300M in private equity backing to create and grow a government contractor through M&A.
Prior to Galeos, Nolan shepherded government services provider Stanley, Inc. through a dramatic growth phase, ultimately taking the company public on the NYSE. Stanley was acquired by CGI Group in August 2010 for $1B in cash.
Peter LaMontagne, CEO, Novetta Solutions: Formed through a merger of four government contractors, Novetta is a private equity backed security, data analytics and cloud services company working for customers in the defense and intelligence community.
LaMontagne has worked in the government IT market for two decades, having held leadership positions at Mantech and Paradigm Solutions.
Walter Florence, Managing Director, Frontenac Company: A Chicago-based private equity firm founded in 1971 that invests in privately held companies in the services industries. The firm’s portfolio companies in the government contractor space include Salient Federal Solutions and SI International.
Chris Cathcart, Principal, The Halifax Group: a mid-market private equity group that typically invests between $10M and $40M in technology, healthcare and consumer-oriented industries.
Each panelist shared a set of introductory remarks about their role in devising, executing and/or funding a corporate growth strategy. Then, a fascinating dialogue ensued about the general misconceptions about private equity, and the relationship that exists between financiers and entrepreneurs.
Here are a couple of choice quotes:
“For a professional executive team, the sense of empowerment from private equity is incredibly attractive. Novetta has grown from 100 to more than 500 employees in a relatively short period of time. We’ve done well with private equity ownership. A financial partner can help keep a company rationale and focused in the right direction.”
“There are many different business strategies with private equity. Our approach is ‘back to basics’ to create value. We focus on management teams, sustainable businesses and profitable growth. It’s actually quite simple – great results come from great leadership and great execution.”
“We partner with entrepreneurs and provide an appropriate level of operational guidance through our participation on a company’s board. (New investment) deal flow during Q1 was anemic. Yet, there are rays of hope and signs that point to it being a strong year for M&A.”
“A private equity partner has given us the ability to look at and build a strong starting point for our business. We have the resources to attract a management team and the necessary time to make smart decisions when it comes to M&A.”
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