Riverside Celebrates 300th Acquisition November 07, 2012
Australian Transaction Marks Landmark Achievement for Global PE Firm
The Riverside Company celebrated a milestone this week, as it completed the 300th acquisition in its 24-year history with a deal to purchase Australian provider of online learning and compliance courses, Learning Seat.
Riverside Co-CEOs Béla Szigethy and Stewart Kohl agreed that the milestone of 300 is worth noting and celebrating, not least because it is the first investment of the firm’s affiliated Riverside Asia-Pacific Fund II.
“Few private equity firms have the privilege to invest in so many great little companies,” said Kohl. “While the large quantity is meaningful in and of itself, what most excites me is the advantage it offers to Riverside’s investors and partners. Like most things in life, the more you do it, the better you become, and the breadth and depth of our experience, the resulting industry expertise and our ability to recognize patterns all differentiate Riverside.”
Szigethy referenced the important role of add-on acquisitions in reaching the impressive total.
“We are the beavers of the private equity industry,” said Szigethy. “300 is a lot of deals, even when spread out over 24 years, and it’s worth noting that almost half of those were add-ons to existing platforms. Add-on acquisitions have been a significant contributor to our returns, both as a result of earnings growth and multiple enhancement.”
Breaking down the 300 number, it is nearly evenly split between platforms (153) and valuable add-on acquisitions (147). Riverside has exited 79 of its platforms and their 90 related add-ons over the course of its history. While 300 deals is a considerable number for any firm, the Co-CEOs both pointed out just how many potential acquisitions the firm had to carefully research over the years. They estimated that the firm had considered between 30,000 and 40,000 investments in order to find 300 “little leaders” with the most potential.
“Perhaps the real headline here is ‘Riverside does not buy nearly 35,000 companies,’” said Kohl. “With our Global Origination team, we have the opportunity to see more deals and then to exercise our rigorous process for picking the winners. It is like looking for the proverbial needle in the haystack or the gem in the rough, as we acquire less than 1% of all of the opportunities that we review.”
As a generalist investor, Riverside has acquired companies ranging from A (ActiveStyle) to Z (Zetkama) in industries as varied as Turkish pet food makers and Japanese parking lot operators. Along the way, however, Riverside has developed a handful of specializations as it gained experience in select industries. These specialized teams include senior advisors with decades of experience, dedicated internal resources, and specially trained operators and transactors for the industries. Riverside’s specializations account well over half of all of its deals, and include:
- Education & Training
- Software & Information Technology
From its roots as an unfunded private equity group, Riverside has become global in its scope. Among its 300 investments, it has owned companies in 25 different countries on five continents. The firm has 20 offices in 14 different nations, allowing it to capitalize on local knowledge while leveraging its global resources.
“Without our overall success in meeting the expectations of our business partners, completing 300 deals would be impossible, but with our exceptional team and resources, we’re well-positioned for at least 300 more,” said Szigethy.
The Riverside Company
The Riverside Company is a global private equity firm focused on acquiring growing businesses valued at up to $200 million (€200 million in Europe). Since its founding in 1988, Riverside has invested in 300 transactions. The firm’s international portfolio includes more than 70 companies, and it has $3.2 billion/€2.5 billion in assets under management.