Spell Capital Partners

Spell Capital Partners

Type	Private Equity Firm
Industry	Financial Services and Asset Management
Founded	1988
Founder	William Spell
Headquarters	Minneapolis, Minnesota
Total assets	$325 million AUM
Website	spellcapital.com

Spell Capital Partners is based in Minnesota, and specializes in the management of private equity and mezzanine capital. The current President William Spell founded the company in 1988, and the company is one of the oldest private equity firms in the United States.^[1]

Currently, the firm has a total of $325 million assets under management (AUM) and in 2016 had successfully completed over 130 acquisition transactions. Currently, Spell Capital is investing from Spell Capital Partners Fund V and Spell Capital Mezzanine Partners.^[2]

Spell Capital is split into two divisions, Spell Capital Private Equity and Spell Capital Mezzanine. Private Equity focuses on acquiring controlling interests in industrial manufacturing companies, while Spell Capital Mezzanine provides subordinated debt and non-control equity to businesses in a variety of industries.^[3]

Background

Spell Capital Partners LLC is a private equity firm specializing in subordinated debt, mezzanine debt, buyouts, growth capital, acquisitions, middle market investments, add-on acquisitions, and management buy-outs.

Spell Capital Partners differentiate themselves from typical private equity funds, as the company’s partners’ personal investments account for 20-40% of each fund. The firm has 5 Managing Directors consisting of James W. Rikkers, Andrea Nelson, Paul Meyering, Mark McDonald, and Stacy Harmsen. The firm currently has 19 employees.

The firm sources and owns businesses across the United States, but has preference for opportunities located in the upper-Midwestern states of Minnesota, Iowa, Wisconsin, North Dakota, South Dakota, Indiana, Illinois, Indiana and Nebraska.

The firm primarily invests between $2.0 million and $20.0 million in companies generating minimum revenues of $5.0 million, enterprise value between $10.0 million and $50.0 million and having an EBITDA between $1.5 million and $10.0 million.^[1]

Spell Capital Partners focuses on making investments in industrial manufacturing businesses with strong management teams, and has expertise in the plastics industry.

History

Bill Spell, a former investment banker, founded the company in 1988, drawing upon his prior experience as Vice President and Director of Corporate Finance at a Midwest-based investment-banking firm.^[4]

Spell Capital launched fundraising for its fifth private equity fund, Spell Capital Partners Fund V, in September 2015 and held a first close 45 days later. The Fund is currently $65.0 million and over-subscribed by 25%. Spell acquired the first portfolio company, Atlas Wire, in early 2016.

During January 2012, Spell Capital launched its first Mezzanine fund with a goal of approximately $100 million in total capital. The fund closed in spring 2013, with subscribed at over $140 million. This fund provides subordinated debt and non-control equity to businesses in a variety of industries across the United States, targeting companies with $2–15 million of EBITDA.^[5]

In 2016, Spell sold Thermoforming Technology Group, the final portfolio company in Fund III.

Recognition

Spell Capital Partners has received three nominations for Deal of the Year from Buyouts Magazine. In April 2013, Spell Capital’s Arctic Fox transaction was nominated for Turnaround Deal of the Year and LAI International was nominated for Small Market Deal of the Year. In 2007, Copperfield, Inc. was a finalist for the Middle Market Deal of the Year.

References