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Mountaingate Capital closes debut fund at hard cap with USD 395m in commitments.

M2 EQUITYBITES-August 18, 2017-Mountaingate Capital closes debut fund at hard cap with USD 395m in commitments

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Mountaingate Capital ("Mountaingate"), a Denver-based private equity firm employing a proven, customer-centric buy-and-build strategy that empowers lower middle market companies with strong growth potential and engaged leadership teams, has announced that it closed its first fund ("Fund I") at its hard cap with USD 395 million in capital commitments, the company said.

Fund I closed above its target of USD 300 million, was significantly oversubscribed and attracted a diverse investor base of leading institutional investors.

Fund I will continue to invest in new platform companies and support their efforts with strategic add-on acquisitions in four target sectors: marketing services, business/industrial services, specialty distribution and specialty manufacturing, including medical devices.

Mountaingate's Fund I has seen strong early momentum with three platform investments already in the portfolio. W2O Group, a San Francisco-based marketing and communications firm serving healthcare and technology clients with industry-leading proprietary analytics and insights; HS2 Solutions, a Chicago-based digital brand experience agency with expertise across leading enterprise marketing platforms; and Elite SEM, a New York-based performance driven digital marketing firm specializing in e-commerce and consumer brands.

Mountaingate has already formalized strategic plans for these platforms, supported several management additions and closed three strategic add-on acquisitions.

Mountaingate has an experienced team managing Fund I with, in the aggregate, approximately 60 years of principal buy-and-build investing experience in the lower middle market. The four Mountaingate founding managing directors have served in leadership positions together for over ten years at KRG Capital Partners ("KRG"), a private equity firm co-founded by Bruce Rogers in 1996.

KRG's final fund, Fund IV, is still being jointly managed by the Mountaingate managing directors as well as four other KRG managing directors. Fund IV has realized a series of successful exits over the past 18 months. Four out of a total of 15 platform companies remain in Fund IV and the Mountaingate team plans to continue to support these businesses through successful exits.

The four other KRG managing directors are not affiliated with Mountaingate, but are each investors in Fund I on a passive basis. Fund I also received backing from a core group of legacy KRG institutional limited partners, as well as several new meaningful limited partner relationships. There are no plans for KRG to raise another fund.

Credit Suisse Securities (USA) LLC acted as exclusive advisor and placement agent for Fund I and Kirkland & Ellis LLP served as legal counsel.

Mountaingate Capital is a private equity firm based in Denver that specializes in building and empowering lower middle market companies with strong growth potential and engaged leadership teams. The firm was launched by a team of partners with deep investment expertise in four distinct market sectors: marketing services, business/industrial services, specialty distribution and specialty manufacturing, including medical devices.

Mountaingate's focus on organic growth coupled with its proven customer-centric buy-and-build approach for add-on acquisitions and shared equity ownership with management creates more value for the end customer, while forging stronger, more collaborative, and more successful investment partnerships with management teams. In 2017, Mountaingate announced the close of its first fund with USD 395 million in capital commitments. Mountaingate targets investments in new platform companies typically with USD 5 million to USD 25 million of EBITDA.

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Publication:M2 EquityBites (EQB)
Date:Aug 18, 2017
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