- Friday August 20, 1999
Peninsula Capital Partners L.L.C. (Detroit, Michigan) — The principals of Peninsula Capital Partners are pleased to announce the final closing of Peninsula Fund II, a private investment partnership with $143.3 million of committed capital, a figure well in excess of the Fund II’s original $100 million target. Fund II focuses on providing hard-to-find subordinated debt, equity and late-stage venture capital to smaller middle-market companies requiring capital to fund growth, acquisitions or changes in ownership. Limited Partners include state and corporate pension funds, commercial lenders, insurance companies, major corporations and high-net-worth individuals.
Peninsula Fund II is the successor partnership to The peninsula Fund, a similarly-focused $53 million partnership closed in 1996 that is now fully invested. Peninsula Fund II will expand upon the investment program of its predecessor by frequently investing at more than one level of a company’s capital structure and by participating at various stages of a company’s development. Such flexibility is rare in today’s capital marketplace and results in Fund II playing different roles from one transaction to the next.
A sample of this flexibility can be seen in Find II’s early investments. Fund II has already invested over $35 million in five companies, providing capital for such diverse purposes as supporting a management buyout, funding product development, buying out a retiring majority shareholder, backing an industry consolidation effort and completing an acquisition. In three of these investments, Fund II provided a strip of subordinated debt in the company and in the two other investments, Fund II invested a combination of subordinated debt, preferred stock and common stock.
“Our investment approach defies traditional categorizations such as mezzanine, buyout or venture capital”, states Scott Reilly, the General Partner’s President and co-founder, “We see ourselves as a ‘utility infielder’ within the private equity industry as we will provide traditional subordinated debt in one transaction and then act as an equity co-sponsor in the next. We are very flexible regarding investment structure; however, we are strictly a minority-interest investor.”
“Our priority is to be responsive to the demands of our transaction partners”, Mr. Reilly concluded, “We will consider filling different roles from one transaction to the next so long as we are being adequately compensated for the investment risk we are assuming.”
Fund raising for Peninsula Fund II was launched in late April 1998 and quickly garnered commitments exceeding Fund I’d capital base. Fund II’s first closing was held on October 1st, 1998 on $78 million. A second closing on an additional $50 million was held on March 31st, 1999 which brought the Fund’s capitalization to $128 million. The final closing was on August 6th which added another $15 million and topped the Fund out at slightly more than $143 million.
The General Partner of both Funds is Peninsula Capital Partners L.L.C., a Detroit-based investment management company founded in 1995 by William Y. Campbell, Scott A. Reilly and William F. McKinley. Messrs. Campbell and McKinley previously founded in 1988 W.Y. Campbell & Company, a respected investment banking organization providing M&A and other corporate finance advisory services to a broad range of middle-market and Fortune 500 clients, which was acquired by Comerica Bank in 1995. Mr. Reilly previously participated in the successful development of two other private capital management companies, Churchill Capital, Inc. and Northstar Capital, Ltd., both based in Minneapolis. The balance of Peninsula Capital’s professional team is comprised of Karl E. LaPeer and Steven S. Beckett (Senior Vice Presidents and Principals), Jon Krempel, Hector Bultynck and Christian Moye (Vice Presidents).
With the final closing of Peninsula Fund II, Peninsula Capital Partners now manages nearly $200 million between its two partnerships, making it one of the largest fund managers of its type in the State of Michigan along with such notable organizations as Questor Partners and Windpoint Partners.
For additional information please call Scott A. Reilly at (313) 237-5100.
From the very beginning, we have had a very collaborative and enjoyable partnership with Peninsula. We built camaraderie through challenges that could stress relationships. We have had numerous complicated issues to resolve and they continue to help us find solutions. Their team brings a very desirable combination of experience, skills, and integrity. Our team has really enjoyed the partnership and we look forward to working together for many years to come.”
It has been a pleasure to work with the people at Peninsula. During good times, they have been supportive of our growth. When our business faced challenging economic times, their trust in our management team, financial support and willingness to adjust our capital structure helped to navigate to a stable and healthy position. Peninsula’s strong bank relationships are a key element to our business’ success.”
To find a partner that shared our passion was a prerequisite that we thought we’d struggle to find, but from the get go Peninsula showed a real understanding and empathy for our business and the people within it. We’re over a year in and we’re delighted with our decision and remain firmly on track to achieve our ambitious long-term goals.”
Partnering with Peninsula has been one of the best decisions we have made thus far as an independent sponsor. The team is highly disciplined, applies strong analytics and consistently displays a high level of integrity. Through good times and bad, Peninsula has proven to be a valuable partner, providing solid guidance and support to management teams and independent sponsors alike. While risk mitigation is always front and center, Peninsula is adept at finding smart and creative ways to help companies grow while maintaining a strong and vibrant work culture for employees to thrive.”
When we sold our company to Peninsula, I had many questions, and some anxiety, about how we would be treated post-deal. Seven years later, all of those questions have been answered. It could not be a more fulfilling (and successful) partnership.”
Peninsula has been an invaluable partner for Weave. Of the various capital partners we considered, Peninsula treated us like a true partner throughout the process, engaging in honest and transparent dialog. Post transaction, the Peninsula team continued to be aligned and cooperative partners, helping to professionalize the financials, inserting new management, and securing a larger warehouse. As a capital provider, Peninsula is singular in its understanding of, and flexibility in, working with independent sponsors.”
Over the past seven years, Peninsula Capital Partners has been instrumental in supporting the Burlington team’s transition from a small unsophisticated company to a global leader in the radiation protection industry. They have supported us through early challenges, led our strategic acquisition efforts, and they continue to act as an extension of our management team. In doing so, they understand our business and have embraced our company vision. We deeply appreciate the investment Peninsula Capital Partners has made in upgrading our manufacturing and computer technologies, but their most valuable contributions have been their partnership, support, and guidance.”
In my experience, strategic alignment of stakeholders is the most critical element of success for a private equity-backed business. The Peninsula team does a fantastic job of communicating with management to ensure such alignment. They create a true partnership, striking an ideal balance between guidance and autonomy, and have proven to be extremely skillful in creating the right environment for growth.”
We represented a client who had recently closed a transaction with Peninsula. It has been our experience that cultural fit is an important ingredient of a successful transaction. Our client had an instant connection with the Peninsula team, which carried all the way through negotiations, due diligence and the inevitable complexities that emerge in any transaction. The unique deal structure proposed by Peninsula was a compelling value proposition for our client and we look forward to their shared future success.”
Over the last several years, we have faced a unique challenge caused by COVID. When an industry experiences these types of shocks, all aspects of your business are tested, including key financial partnerships. During times of risk, most financial partners will look for ways to tighten controls and restrict how a company operates. James Illikman and Peninsula took a different approach and looked at the longer-term opportunity and invested the time and resources into making the business stronger.”
Chris Gessner and Peninsula have been our go-to capital partner for years now. Their ability and desire to work through difficult and challenging deal issues sets them apart from other capital partners. Chris is flexible and creative in negotiations with both sellers and independent sponsors and is transparent throughout the deal process.”
I strongly recommend that you consider Peninsula Capital as your business partner. Together, we have done so much more than I could have possibly done alone. They have guided my team and provided insight and resources which we’ve used to increase the value of my company substantially! My only regret is that I did not contact them earlier in the development of my company because I am having fun and attaining outstanding success by working with Peninsula Capital. Feel free to contact me if you have any questions related to this partnership with Peninsula Capital Partners.”