ParkerGale Lands First Investment with ATP

Originally appeared in the Wall Street Journal on November 17, 2015

Lillian Rizzo

Newly formed private equity firm ParkerGale Capital has landed its first deal-Aircraft Technical Publishers.

The Brisbane, Calif., company, which provides information management and services for manufacturers, operators and owners, and maintenance providers in the aviation industry, was a perfect match for ParkerGale.

"The company was owned by the founder, is a dominant business in its niche category and is in the technology sector- all things we're looking for," said Devin Mathews, ParkerGale partner and co-founder.

The Chicago firm targets technology companies with $2 million to $10 million in earnings before interest, taxes, depreciation and amortization, and will cut an equity check of $15 million to $50 million per deal, said Mr. Mathews. The Aircraft Technical deal fits right into those parameters, he added.

Aircraft Technical's management invested alongside ParkerGale, said Mr. Mathews. Further terms weren't disclosed.

The investment was made from the firm's first fund, ParkerGale Capital LP, which closed on $200 million, said Mr. Mathews.

Mr. Mathews, his four founder partners and ParkerGale chief financial officer spun out of midmarket firm Chicago Growth Partners to form ParkerGale earlier this year. They had always targeted investments in the technology space, which is why that's the sole focus of their new lower midmarket firm.

ParkerGale will take control stakes in technology companies that are founder- or entrepreneur-backed, help the companies expand, and is likely later to sell them off to a strategic buyer.

The investment banker on the deal, Harris Williams & Co ., knew ParkerGale's team from prior deals and reached out to them in the early stages of this limited auction process, said Mr. Matthews.

In conjunction with ParkerGale's buyout of Aircraft Technical, its founder and chief executive, Caroline Daniels, stepped down. Charles Picasso was named chief executive in her place. Ms. Daniels wanted to exit the business and pass it off to a new owner and leadership she was comfortable with that would "protect the brand," said Mr. Matthews.

"I've already been involved in a business like ATP. I was chief executive of IHS Inc . at the time when the company went public," said Mr. Picasso.

Both Mr. Picasso and Mr. Mathews are looking forward to growing the business together.

"There's a big international opportunity with this business. ATP has small footholds in Asia, Europe and Latin America, but there's a lot more we can do," said Mr. Mathews. "Plus, Charles [Picasso] has already run a global business in a very similar end market."

In addition, the company will look to expand its presence in the U.S. and keep an eye out for add-on acquisitions, Mr. Matthews and Mr. Picasso added.

ParkerGale will aim to ink one to two deals per year in the technology sector, and Mr. Matthews says the firm's pipeline is robust.

"We focus on founder-owned companies. Everyone thinks that every software business is venture capital-backed and located in Silicon Valley. The truth is that most software companies are owned by their founders and are outside of Silicon Valley, and all over the U.S.," said Mr. Mathews.

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