Centerline Capital Management Launches Investment Firm Focused on Operations-Driven, Minority Equity Investments
Backed by Platinum Equity, Centerline Will Apply Private Equity Tools to Public Market Investing.
LOS ANGELES and NEW YORK, Oct. 30, 2019 /PRNewswire/ — Centerline Capital Management, LLC (“Centerline”), a new investment firm led by financial industry veteran Josh Lobel, Co-founder of Archer Capital Management, L.P. (“Archer”), today announced the launch of the alternative investment management firm in partnership with Platinum Equity (“Platinum”).
Centerline will focus on acquiring minority equity stakes in fundamentally sound but undervalued public companies, and assisting management in making operational and strategic improvements to their businesses. The strategy will apply a tool kit of both Operational Levers and Strategic Levers, collectively referred to as the Centerline OS℠, which can be pulled to drive long-term value creation.
“We have found that many public companies have solid management teams and durable businesses, but exhibit operational profiles that are less optimized than their private equity-owned peers,” said Mr. Lobel, Founder and Chief Investment Officer of Centerline. “They often do not have sufficient shareholder engagement, and lack the internal resources required to implement the investments needed to close this gap. These companies are often undervalued by public equity markets and vulnerable to short-term and disruptive activism. We intend to partner with management teams in order to provide the time, expertise and shareholder support required to enable companies to identify and make these critical investments to improve profitability and drive value.”
Mr. Lobel added: “We will fill a void in the marketplace by providing operational and strategic tools to middle-market public companies to help them achieve their potential outside of a control situation. Importantly, by maintaining minority stakes, we expect to avoid control premiums as well as the competition and selection bias associated with control transactions.”
In addition to Mr. Lobel, the senior team at Centerline includes a core group of professionals who have worked together for years and will be joined full-time by a senior operations expert from Platinum.
“Josh and the Centerline team have deep experience identifying public companies that would benefit greatly from operational and strategic support delivered in cooperation with management,” said Jacob Kotzubei, Partner at Platinum Equity. “While we are familiar with many such companies, they’re typically not available for a control-oriented acquisition by Platinum. Centerline’s non-control approach provides an opportunity to collaborate on those investment opportunities in a manner that complements, without overlapping, Platinum’s core buyouts business.”
The Centerline team has significant experience making non-control investments in companies undergoing operational and strategic transitions. Centerline, augmented by Platinum’s operational acumen, will pursue similar types of investments focused on equities of fundamentally sound businesses that will benefit from the application of Centerline OS℠. Centerline is headquartered in Los Angeles with an office in New York City.
Centerline will be structured to enable the deployment of long-term capital and implementation of a value-enhancing operational and strategic tool kit (the Centerline OS℠), with a multi-year investment horizon. The firm expects to begin investing in the first half of 2020.
About Centerline Capital Management
Centerline Capital Management was established in 2019 as an affiliate of Platinum Equity for the purpose of acquiring minority stakes in fundamentally sound, but sub-optimized public companies. Centerline brings an operational focus to its public market investing, partnering with management teams to generate returns through the application of operational and strategic enhancements, collectively referred to as the Centerline OS℠. Centerline is headquartered in Los Angeles with an office in New York City.
About Platinum Equity
Founded in 1995 by Tom Gores, Platinum Equity is a global investment firm with more than $19 billion of assets under management and a portfolio of approximately 40 operating companies that serve customers around the world. The firm is currently investing from Platinum Equity Capital Partners IV, a $6.5 billion global buyout fund, and Platinum Equity Small Cap Fund, a $1.5 billion buyout fund focused on investment opportunities in the lower middle market. Platinum Equity specializes in mergers, acquisitions and operations – a trademarked strategy it calls M&A&O® – acquiring and operating companies in a broad range of business markets, including manufacturing, distribution, transportation and logistics, equipment rental, metals services, media and entertainment, technology, telecommunications and other industries. Over the past 25 years Platinum Equity has completed more than 250 acquisitions.
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