New private equity funds—especially ones which actually invest—are a bit of a rare breed these days. But DLA Piper partner Gerry Williams managed to land one as a client and help it make its first investment recently.
Williams’ client, the Bethesda, Md.-based RLJ Equity Partners, is a portfolio company of The RLJ Companies, founded by Robert L. Johnson, the owner of the Charlotte Bobcats. Its new fund closed in June with $230 million of committed capital.
Its first investment was the purchase of what Williams calls “a significant minority ownership stake” in LAI International from Minneapolis-based private equity firm Spell Capital.
LAI, which is based in Scottsdale, Ariz., and has outposts around the country, uses state-of-the-art lasers and water jet processing to manufacture precision-engineered components for a variety of industries, including healthcare, power generation, aerospace and defense. LAI has annual revenues of about $55 million, according to Spell Capital’s portfolio description.
The financial terms of the deal were not disclosed.
Williams said RLJ became his client when Rufus H. Rivers, whom he met through a mutual friend about seven years ago, became RLJ’s managing director.
The legal aspects of the deal took about 90 days to put together, and Williams said his team of lawyers handled all the mergers and acquisitions work, as well as issues related to real estate, environmental, intellectual property, employee benefits and tax matters.
“I think the unique aspect is, that given the current environment in the debt markets, the deal was done keeping the senior debt lenders in place,” he said. “It became a partnership between the then-existing private equity fund [Spell Capital] that owned the business and RLJ Equity Partners.”
Spell Capital was represented by Fredrikson & Byron in Minneapolis. The investment bank for LAI was Lincoln International.