"Old Economy" holds allure for new buyout firm that will focus on Western States

Three finance specialists have raised $275 million to launch Seattle’s largest private equity fund for midsized companies, and they are looking in the old familiar places for investments.

Evergreen Pacific Partners wants to invest in traditional industries such as manufacturing, distribution and consumer products, areas that lack the glitz of technology and biotechnology in the Northwest.

The region is rife with venture-capital money, but only a handful of such private equity or "buyout" firms have offices here.

Still, Evergreen Pacific is entering the market at a competitive time, with buyout firms nationally raising $53.9 billion last year, more than double the $26.4 billion raised in 2003, according to Dow Jones LBO Wire.

Buyout firms generally take large stakes in mature, privately owned companies, then replace or supplement their management teams and improve or expand operations.

Their goal is to cash out five to 10 years later by selling the companies or taking them public.

Evergreen Pacific’s three partners — Timothy Bernardez, T.J. McGill and Michael Nibarger — met while working for another Seattle private equity firm, Northwest Capital Appreciation.

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Evergreen Pacific Partners

Seattle-based private equity fund

Fund size: $275 million

Founded: January 2003

First deal expected to close: March or April

Investment targets: Western U.S. and Canadian companies, with revenues between $25 million and $250 million in manufacturing, distribution, packaging, radio and cable media, and consumer products.

Source: Evergreen Pacific Partners

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Their expertise is in old-line industries, and they are the first to admit these are not the sexiest sectors.

"We didn’t pick these industries because we think they’re the latest and greatest," McGill said. "They may be slow to stagnant growers, but because of our past investing and operating experience, we can still drive organic cash-flow growth at the companies we buy."

He and his partners plan to invest in companies with revenues of $25 million to $250 million in 13 Western states and two Western Canadian provinces.

By Melissa Allison

Seattle Times business reporter

Full Story: http://seattletimes.nwsource.com/html/businesstechnology/2002195133_evergreen03.html