Graham Partners Earns Successful Return from a Once Written-off Investment
May 7th, 2010
PHILADELPHIA, May 7, 2010 – In its third exit of 2010, Graham Partners has sold its stake in ICG Commerce, one of the world’s leading procurement outsourcing specialists, servicing the multi-national manufacturing sector and global consumer packaged goods companies. Graham’s investment thesis was centered upon the view that outsourcing would be a growing trend amongst OEMs due to their desire to streamline procurement, reduce fixed costs and capital requirements, and focus on their core business activities. Today, ICG Commerce (www.icgcommerce.com) has grown into one of the world’s leading companies in the procurement outsource services business, with a fast-growing global customer list.
An Investment Odyssey – ‘From Zero to Hero’
In August 2000, Graham Partners made a growth equity investment in ICG Commerce alongside of other investors. The company made rapid progress in securing new customers and building out its employee base and infrastructure, but just as quickly burned through the initial cash it had raised. During the company’s early years, it took more time than expected to convert prospects into customers, while the process of taking over the procurement function for multi-national customers was labor-intensive. By 2002, Graham Partners had written its initial investment down to zero, but had also turned around and led the negotiations for a follow-on round of preferred financing which included a 5x liquidation preference plus accruing dividends. Graham’s second investment had the potential to yield an outsized return, one large enough for Graham to recoup its entire investment in ICG Commerce, including the earlier amount invested.
About Graham Partners (www.grahampartners.net): Graham Partners is a leading, lower middle market industrial private equity firm based in suburban Philadelphia with over $1.5 billion under management. Graham Partners is sponsored by the privately held Graham Group of York, Pennsylvania, an industrial and investment concern with global interests in plastics, packaging, machinery, building products and outsource manufacturing. Graham Partners seeks to acquire manufacturing and related service companies with revenues between $30 million and $500 million that participate in niches where it can leverage its unique combination of operating resources and financial expertise.
FOR FURTHER INFORMATION CONTACT: