Frontenac Company

Frontenac Company is a Chicago-based private equity firm founded in 1971. By 2017, the company had invested more than US$1.5 billion across more than 200 partnerships.[1] The company has been described as "a buy-out house",[3] one of Chicago's "pioneering private-equity firms" and "a rock star of the 1990s".[2] Key competitors in the Chicago-area private equity market have been Madison Dearborn Partners and GTCR Golder Rauner.[2]

Frontenac Company
TypeLLP
IndustryPrivate equity
Founded1971 (1971)
FounderMartin J. Koldyke
HeadquartersChicago, Illinois, United States
Key people
  • Ron Kuehl (Managing director, 2017)[1]
  • Rodney Goldstein (Chairman, 2005)[2]
ProductsFinancial services
Number of employees
14
WebsiteFrontenac Company

The firm was originally backed by the Laird Norton Company,[4] a large family enterprise operating in the Western United States. The firm was named for the Frontenac,a paddle steamer that transported logs up and down the Mississippi River, which in turn was named for Louis de Buade de Frontenac, the Governor of New France in the central part of the US.

Frontenac uses a trademarked methodology it calls "CEO1ST", which involves working with an established board member, chairman or C-suite executive in a target market as an anchor point; the firm also uses a market-first approach rather than a deal/partner-first approach.[1] In 2017, this led to the firm's investigation in the "language services" market, and the CEO they chose to start (in their "CEO1ST" approach) with was Perry Solomon.[1] Another feature of the firm's investment strategy is its focus on "mid-market" investments rather than "mega" investments (in the billions of dollars), meaning a focus on firms with annual revenues at or below US$150 million .[2]

In the 1990s, the firm invested in firms such as Platinum Technology (US$1 million investment netted a US$20 million return) and Whittman-Hart, IT services and IT consulting companies, respectively; investment of US$5 million in the education firm DeVry netted US$23 million , and its investment in the defense contractor SI International netted a five-fold return.[2] However, the firm suffered heavy financial losses from the dot-com crash in the early 2000s due to their investment concentration in the sector.[2] In 2005, Frontenac acquired the check-processing firm Wausau.[2][5] By the mid-2010s, the firm was looking to the pet industry for investment opportunities.[6]

Investment by the firm in the company H-E Parts followed the strategic vision "to create the leading independent global provider of solution services and parts to the aftermarket for heavy equipment", working with H-E Parts principals and CHAMP Ventures of Australia; in 2016, Frontenac sold the company to Hitachi Construction Machinery.[3]

Among the principals at the firm, as of 2019, was Elizabeth C. (Betsy) Williamson, who focused on the food, consumer and business services industries.[7] As of 2014, Walter C. Florence was a managing partner of the firm,[6] while Paul Carbery was as well, as of 2016.[3] Joel Warner was an associate at the firm.[8]

In January 2020, Frontenac acquired Prime Technology Group, a provider of outsources application development and managed software. Terms of the deal were not disclosed.[9]

References
  1. Smart, Andrew (November 10, 2017). "Frontenac's Ron Kuehl on Why Private Equity is Investing in Language Services". Slator. Retrieved 7 Jan 2020.
  2. Strahler, Steven R. (December 31, 2005). "Frontenac falls on hard times". Crain's Chicago Business. Chicago, Illinois: Crain Communications. Retrieved 7 Jan 2020.
  3. "Frontenac offloads H-E Parts to Hitachi Construction". AltAssets. December 22, 2016. Retrieved 7 Jan 2020.
  4. "Laird Norton History". Archived from the original on 2009-01-06. Retrieved 2008-12-18.
  5. "Equity firm buys Wausau Financial Systems". ATMmarketplace. February 2, 2005. Retrieved 7 Jan 2020.
  6. Kalaygian, Mark (June 1, 2014). "Capital Catalysts". Pet Business. Pet Business Magazine. Retrieved 7 Jan 2020.
  7. "food_nutrition2019". Capital Roundtable. New York Business Roundtable. 2019. Retrieved 7 Jan 2020.
  8. "nothing | SOLITUDE CAPITAL MANAGEMENT". Retrieved 2020-04-25.
  9. MyChesCo (2020-01-13). "Frontenac Announces Acquisition of Wayne-based Prime Technology Group". MyChesCo. Retrieved 2020-03-17.
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