CINCINNATI BUSINESS COURIER
BALTIMORE PRIVATE EQUITY FIRM SLATE CAPITAL OPENING CINCINNATI OFFICE
May 12, 2022
An East Coast private equity firm has made Cincinnati one of its first markets for expansion with a new office.
Slate Capital Group, based in Baltimore, Md., is expanding with its first locations outside its home market by adding offices in Cincinnati and Nashville, Tenn.
Cincinnati’s thriving economy and strong environment for smaller midsized companies led to the decision, Slate Capital co-founder and partner Rick Corcoran said. He will manage the Cincinnati office.
Slate focuses on companies at the smaller end of the midsized business sector.
"Cincinnati is a vibrant city with a strong business climate anchored by world-class Fortune 500 companies as well as thousands of small and midsized entities," Corcoran told me. "That, plus many world-class educational institutions, means the city has a remarkable talent base. We are attracted to the economic, job and tech growth in the region. And like a lot of the cities where Slate has done business over the years, it has a huge array of interesting and successful private and family-owned lower middle-market companies that compete in business services, distribution and select light manufacturing, with all of which we have extensive experience.”
Slate has had Cincinnati on its expansion list for a while, Corcoran said.
Corcoran, who worked in Cincinnati as a college intern at Procter & Gamble Co. in the 1990s, will relocate here to run the local office.
"We think of ourselves more as business owners than as pure investors," Corcoran said. "Therefore, it is extremely relevant for our executives to have a local presence in the cities we know will thrive. Not to mention Cincinnati is a pretty amazing city. It's wonderful to be back and call it home now.”
Last year was a record-breaking one for private equity firms as they made more acquisitions than ever before. As more capital flows into firms such as Slate Capital, they need to find more deals in which to invest.
“This expansion allows us to scale our presence, find unique proprietary opportunities and deploy capital faster for our partners,” Corcoran said.
Slate Capital seeks companies with annual earnings before interest, taxes, depreciation and amortization (EBITDA) ranging from $3 million to $15 million. It typically invests in companies in the business services, distribution and select light manufacturing. Its capital is usually used to provide liquidity to business owners and growth capital for businesses.
Erik Ginsberg, another co-founder, will manage Slate Capital’s Nashville office. Parker Davis will run the Baltimore location, where the firm was founded in 2004.
The firm has raised its money mainly from wealthy individuals and family offices in addition to the founders.
Slate Capital has made numerous investments in the past showing its broad areas of interest. Current investments include Horizon Facilities Services, Nova Technologies and O’Donnell Metal Deck & Bar Joist. It had previously invested in companies such as Broadcast Sports International, First Equity Card Corp. and Let’s Dish!
It typically makes new investments in just one or two companies per year.
“We believe in focusing on a few businesses and enhancing their successes and growth rather than pursuing a larger volume of deals and a portfolio return,” Ginsberg said. “We play an active role in our investments. As independent sponsors for the past 18 years, we understand the relevance of stepping into the roles of full-time operational managers or board members for our companies.”
Other private equity firms have expanded their reach to Cincinnati in the past couple of years.
Miami-based H.I.G. Capital, a $42 billion private equity firm, launched the Cincinnati operation of its WhiteHorse Capital unit in November 2020. Chicago-based May River Capital brought in Cincinnati executive Rahul Deshmukh to work locally, acquire and run a company.
Locally based Roebling Capital Partners was formed in 2020, raised $20 million and made its first acquisition last year. And Claymore Capital Partners, based downtown, raised $27 million.