Hastings Equity Raises $60M For Second Fund


Dow Jones LBO Wire- Beina Xu

11/21/2008 – Hastings Equity Partners has raised $60 million so far for its second buyout fund, according to Managing Director Bruce MacRae.

Hastings Equity Fund II LP, which held a first close on about $50 million in March, hopes to raise $100 million. All new deals will be done from this fund, said MacRae, adding that Fund I, which closed at $25 million in 2004, still has some money in reserve for add-ons.

The firm "casts a wide net" in terms of sourcing deals, but is particularly interested in energy, oil and gas, utility and infrastructure, business services and niche manufacturing deals. Measurement instrumentation -- which is any device that measures things -- is a sector that has also piqued the firm's interest; its multi-billion dollar industry scope and high margins are very attractive to the firm, said MacRae.

It does avoid some things: "I want no part of consumer or retail. I'm an industrial guy," MacRae said.

The fund bought warehousing provider Taylored Services in May, and wrapped up an undisclosed deal in the general aviation aircraft parts sector at the end of September, according to MacRae. The deal was "typical" for the firm, he added.

"We're not high-priced buyers, so not a lot of leverage, one senior provider and mostly equity," he said.

The firm will continue to invest $5 million to $10 million of equity in companies with $10 million to $30 million in enterprise value and execute the same strategy in this economic environment -- which is to buy at low prices with little leverage. Historically the firm has used two to 2.5 times leverage at the most, and pays four to five times earnings before interest, taxes, depreciation and amortization for companies, according to MacRae.

"We've never had to deal with a more sophisticated, multi-tiered debt structure," he said.

Reach Hastings Equity at 781-209-8801.


Fast Fact

Hastings strives to help companies create sustained value for its employees, customers, and investment partners.