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HIG type lower MM shop. They buy shitty businesses on the cheap, make them less shitty and sell them for more than what they paid. They did this with SummitReheis where they bought it from another PE shop for 5x and then sold it to Elementis for 13+x.
The senior guys came from Ripplewood so there are alot of Japan connections. They have a strategic relationship with Mitsubishi which they leverage to make operational improvements to their businesses. They’ve done very well in recent years.
Looks like they only closed their $964 million Fund II in April 2017....so it's relatively young. Fund I was only $431.5 million which doesn't seem that large to me.
In terms of acquiring businesses for low multiples, even in this market of wild valuations, shitty businesses are being sold as owners attempt to capitalize on the environment. In my opinion, periods of high valuations, like the one we are in now, do not impact divestiture valuation multiples equally. A great business that might sell for 10-11x in an average period could sell for 15-16x in a hot M&A market. However, a shitty business that may sell for 4-5x in an average period would likely hit a ceiling of 7x in a hot M&A environment. This rings true to me because shitty businesses don't often go to deep-pocketed strategic acquirors who can rely on synergies to juice their offers, they go to private equity firms just looking to lever it up to generate IRR then get out.
In One Rock Capital's case, I think this phenomenon helped them acquire FXI, Inc., a foam products company (shitty business...all that shit can be made in China at lower cost). The previous owners acquired it through bankruptcy in 2009. By 2017, they were probably just trying to get out before the M&A market turned, hence One Rock Capital (probably the only real bidder) won with a likely very conservative valuation.
$400m first time fund is huge fyi... not small by any stretch. usually first time funds in the market they play in is like 150m
It’s a firm on the rise, as evidenced by doubling target fund size each raise and hitting the hard caps. Very operationally focused in value creation. Punches above their weight (see: Nestle Waters NA carve out). Yes, “sweaty” due to the complex nature of the target deal profile, but from what I understand the culture is good, e.g. people are respectful of each other and not toxic, which is rare in this type of strategy.
Source: close with someone there.