A $555 million patent purchase completed by HGGC

The top global private middle market equity firm, HGGC Global has been on an aggressive expansion bid lately. This expansion bid is being fueled by the firm’s need to grow itself both financially and strategically. From a financial standpoint, this middle market private equity firm wants to increase its revenues. On the other hand, from a strategic perspective, the firm seeks to position in a better place to attract lucrative deals and partnerships. This firm’s expansion bid has led to it purchasing a top patent risk management services provider, RPX.

A wonderful deal

RPX was founded in 2008 and since this time it has been purchasing the most promising patents from all over the world. Today, this patent management services provider boasts of having more than 23,000 very promising patents under its care. RPX has spent more than $2,5 billion purchasing these patents. HGGC paid $10.50 per share in cash adding up to a total of $555 million as it had been outlined in the May agreement between the two companies.

This purchase is expected to pay off handsomely given that the middle market private equity firm has a lot of companies under it that could turn some of the patents under FPX into a fortune. There is speculation that this particular opportunity is what fueled this private equity firm to go ahead with this purchase. In this deal, HGGC worked with partners like Jefferies Finance who was the primary lender alongside GCA Advisors and Houlihan Lokey who were the financial advisors.

About HGGC

This private firm dominates the global middle market equity space with an impressive transactional value of over $17 billion and $4.3 billion worth of capital commitments. The firm utilizes the “Advantage Investing” model to push its success. In this model, all the firm’s players such as the management, founders, investors, and staff work together to create a powerful alignment of interests that drive the firm to success. This is a model that many businesses are now imitating thanks to the success of HGGC. Today, this firm has completed over 90 major deals that have propelled it to this success using the model.

https://www.linkedin.com/company/hggc

HGGC: Making Other Businesses Thrive

HGGC started as Huntsman and Gay Capital Partners, which was shorted to H&G Capital Partners. However, the company had to change its name because H.I.G Capital sued it due to name similarity. The plaintiff argued that they were quite similar especially when pronounced. As an outcome, the name was changed to Huntsman and Gay Global Capital. The partners decided to settle for this name because they felt it was right to honor the senior partners. However, in 2013, the name was changed to HGGC because Huntsman left the organization in 2012.

The company, which was started in 2007, is a firm in the equity and investment market, and it is headquartered in Palo Alto, California. Other than Huntsman, its other founders such as Gregory Benson, Bob Gay, Steve Young, and Richard Lawson have pushed the company towards investments in growth capital and leveraged buyout transactions. Their focus is on businesses which are in the middle market.

HGGC invests in businesses that are in diverse sectors and industries as long as they have the potential to achieve the desired results. So far, the firm has invested in business services, financial services, consumer goods, information services, software and technology sectors, industrial services, manufacturing, infrastructure, healthcare, and chemicals, among others. The goal of the company is to align its interests with those of a given partner to ensure that as the company succeeds, the partner is thriving as well.

The company is known to focus on entities that are in the North American market. However, it has not restricted itself to this region as it invests in companies that are outside these borders as long as there is potential. If a company’s revenues are between $100 million and 1 billion, HGGC is likely to invest between $25 million and $125 million. Other characteristics that will increase the company’s investment probability include a figure between $15 million and $35 million in EBITDA as well as $100 million and $500 million in enterprise worth.

HGGC may choose to take majority rights as part of the investment agreement. However, it may also take minority positions but acquire the control rights. One of the recent investments that the company has made is FPX, which is a deal that occurred in 2017. Any parties that wish to contact HGGC may use the headquarter offices or utilize the alternative locations in West Palm Beach, Foxborough, and Salt Lake City, which are in Florida, Massachusetts and Florida, respectively.

https://www.marketwatch.com/press-release/colin-phinisey-joins-hggc-to-lead-capital-markets-efforts-and-christopher-guinn-joins-as-executive-director-2018-10-01