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The Gores Group

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The Gores Group
IndustryPrivate Equity
Founded1987
FounderAlec Gores, Chairman & CEO
HeadquartersLos Angeles, California, United States
Key people
Alec Gores
Vance W. Diggins
Scott M. Honour
Timothy Meyer
Joseph P. Page
Mark R. Stone
Ryan Wald
Steven C. Yager
ProductsInvestments, private equity funds, leveraged buyouts
Websitewww.thegoresgroup.com

The Gores Group, founded by Alec E. Gores, is a private equity firm focused on acquiring controlling interests in mature and growing businesses.

Since 1987 Gores has acquired over 60 companies worldwide with combined revenues in excess of $15 billion dollars. Currently, Gores has approximately $3.8 billion dollars in equity under active management. The Gores Group is headquartered in Los Angeles, California with offices in London and Boulder, Colorado[1]

On January 31, 2011 The Gores Group closed its third private equity fund, Gores Capital Partners III (GCP III), with capital commitments of $2 billion. Total capital commitments in GCP III exceeded the fund’s $1.5 billion target by over 30%. A majority of previous investors participated in the new fund, while increasing their commitment by 36%. [2]

History

Alec Gores began his career as a self-made entrepreneur and operating executive. In 1978, he self-funded and founded Executive Business Systems (EBS), a developer and distributor of vertical business software systems. Within seven years, EBS had become a leading value-added reseller in Michigan. In 1986, CONTEL purchased EBS and Mr.Gores subsequently began acquiring and operating non-core businesses from major corporations and building value in those entities, a decision that ultimately led to the founding of what has evolved into The Gores Group. [3]

The Gores Group was backed by private capital until 2002, when it raised its first fund, Gores Capital Partners I. [4] In 2006, the firm raised its second fund, Gores Capital Partners II, of $1.3 billion which invested in notable businesses such as Westwood One and Siemens Enterprise Communications. [5]

Investment Strategy

Gores is committed to a focused investment strategy that has been driven by the firm's background in operating and managing over 60 businesses across many sectors. Given the firm's history and background, it maintains particular expertise in the technology, telecommunications, media, consumer, health care, business services and industrial areas. The firm is focused on non-core and attractively valued situations where it can leverage its operating skills, experienced management oversight, understanding of optimal exit alternatives and speed of execution.

Recent Transactions

  • August 30th, 2010: The Gores Group made an undisclosed but significant investment in red carpet favorite J. Mendel, a New York global luxury brand. [6]
  • September 1st, 2010: Gores, in a joint venture with Platinum Equity, acquired Alliance Entertainment from its parent company, Source Interlink Co. Alliance, with roughly $750 million in revenue, is the largest wholesale distributor of CD, DVD, and video game titles in the United States. [7]
  • September 7th, 2010: The Gores Group, announced that it had acquired substantially all of the assets of National Envelope Corporation through a transaction under section 363 of the U.S. Bankruptcy Code. National Envelope was founded in 1952 and is the largest envelope producer in the United States, manufacturing 37 billion envelopes annually. [8]
  • September 16th, 2010: Gores announced the acquisition of the Cosmopolis, WA high purity cellulose mill from Weyerhaeuser. The mill had been closed since 2006 and the Gores investment is expected to revitalize the local economy. Washington Govenor Chris Gregoire called the sale "fantastic news for the Grays Harbor community and the entire state of Washington," saying it "means the return of hundreds of living-wage jobs in Grays Harbor County." [9]
  • October 22, 2010: The Gores Group announced that its affiliate Cobridge Communications ("Cobridge") has acquired certain cable systems from Charter Communications. Cobridge, which will operate the systems acquired from Charter, provides telecommunications services, including advanced Digital Cable, HDTV, High-Speed Internet and Digital Telephone services, to residential and commercial customers, primarily in the Southeastern United States. Cobridge serves approximately 65,000 customers across seven states. [10]
  • January 5, 2011: The Gores Group closed its sale of Vincotech Holdings Sarl, a developer and manufacturer of power modules and inverters for the industrial and solar power market, to Mitsubishi Electric . Financial details of the sale were not disclosed.
  • January 13, 2011: General Electric Co. agreed to buy Lineage Power Holdings Inc. for $520 million from The Gores Group to tap demand for electricity management from a surge in mobile computing. Lineage offers equipment that converts power to direct current from alternating current as well as power-module and data-center systems in the $20 billion so-called micro-power industry. The exit represents over a 4x return on invested capital for Gores, who purchased the business in 2007 for $100 from Tyco Electronics Ltd. [11]
  • March 11, 2011: Gores Group owned Alliance Entertainment acquired EDGE Entertainment Distribution, a wholesale distributor of pre-recorded music and movie titles, related accessories and other products. EDGE primarily serves independent music retailers, public libraries and college book stores. Financial terms of the deal were not disclosed. [12]
  • May 9, 2011: The Gores Group announced that it partnered with management to acquire Sage Automotive Interiors, Inc., a market-leading supplier of high-performance specialty fabric materials, from an affiliate of Azalea Capital, LLC. [13]

Current Portfolio

References

  1. ^ Company Website. www.gores.com. The Gores Group.
  2. ^ The Gores Group closes $2 billion private equity fund. CPI Financial.
  3. ^ Matt Krantz (March 5, 2002).Fixer-Upper Pro Loves a Challenge. USA Today.
  4. ^ Gores Technology Group, LLC Closes $400 Million Private Equity Fund.Press Release (November 17, 2003).
  5. ^ Alec Gores: '100% devoted' to private equityFortune (February 16, 2011).
  6. ^ J. Mendel Taps Los Angeles Private Equity Firm for Expansion.Business Wire.
  7. ^ Private Equity Beat (September 1, 2010). In Family Affair, Platinum Equity and Gores Group Close First Combined Deal. The Wall Street Journal.
  8. ^ Jeff Bounds (September 17, 2010).National Envelope Corp. bought out of Ch. 11.Dallas Business Journal.
  9. ^ Gov. Gregoire’s statement on purchase of Cosmopolis mill Press Release (September 16, 2010).
  10. ^ The Gores Group and Cobridge Communications Announce Acquisition of Cable Systems from Charter Business Wire. (October 22, 2010).
  11. ^ GE Energy to Acquire Gores Group's Lineage Power Holdings for $520 Million Bloomberg. (January 13, 2011).
  12. ^ GAlliance Entertainment Acquires EDGE Entertainment Distribution Thestreet.com. (March 11, 2011).
  13. ^ The Gores Group Acquires Sage Automotive Interiors Yahoo Finance. (May 09, 2011).


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