Statewide: Charlotte region, May 2015

 In 2015-05

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A new Frontier

Frontier Capital’s fourth fund, announced in March, raised $390 million — more than eight times as much as the $45 million in its first that launched in 1999, reflecting continued confidence of investors. Back then, the Charlotte-based private-equity firm’s investing strategy was unusual. “There were a fair number of firms that focused on more mature manufacturing and distribution and service businesses, and early stage biotech and tech investments. There were not as many that focused on tech-enabled services companies,” says Richard Maclean, who co-founded Frontier with Andrew Lindner. “We were very fortunate that we chose that focus 15 years ago.” The niche is larger and more crowded these days, but it still can be lucrative. It took Frontier six months to raise the money for its fourth fund. Its third fund of $250 million had an average annual internal rate of return of 16%, Frontier officials say. Most Frontier investors are institutions such as pension funds and college endowments — many that had put up money previously. “We’ve had very strong returns, and I think you definitely have a leg up if you demonstrate that you have a specialty,” Maclean says. “It’s a little harder to have a story that turns out if you’re a middle-market generalist.” Money devoted to private equity has mushroomed in Charlotte in recent years, led by Bank of America spinoff Ridgemont Equity Partners, which raised $735 million two years ago, and Pamlico Capital, which raised $650 million in 2013 after a spinoff from Wells Fargo. An investment in Charlotte-based data-center operator Peak 10 was a winner for Frontier’s initial fund, and North Carolina remains a key market, though most investments are out-of-state. Recent profitable investments include cloud-based event planner Lanyon in Dallas, Baltimore-based performance-measurement platform Social Solutions and Birmingham, Ala.-based business-services software developer Daxko. Frontier targets companies with $5 million to $30 million in revenue that are growing by at least 20% annually.

 

After reporting a 5% increase in fourth-quarter sales, to $1.4 billion, Belk might be looking for a buyer. The Charlotte-based company said in a statement it has hired New York-based investment firm Goldman Sachs to help it “explore all options for our future.” William Henry Belk opened a bargain store in Monroe in 1888, and the company added stores across the South in the 20th century. Despite increased competition from Macy’s, Nordstrom and other national retailers, Belk, the nation’s largest family-owned department-store chain, remains profitable and is expanding its online business. Closely held by second- and third-generation family members, the company now operates 297 stores across 16 southern states and employs about 25,000 people, including more than 8,000 in North Carolina.


Briefs

CHARLOTTEBojangles’ filed for an initial public offering. The SEC filing didn’t specify how many shares will be offered or a price range. Founded here in 1977, the fast-food restaurant chain reported sales of more than $1 billion in 2014. Boston-based private-equity firm Advent International bought the company in 2011 from Charlotte-based Falfurrias Capital Partners. Bojangles’ has 622 locations in the Southeast, including 288 in North Carolina.

LINCOLNTON — Mohican Mills, a division of Great Neck, N.Y.-based Fab Industries, will close its 750,000-square-foot manufacturing plant, idling 157 workers by June 8. The company makes nylon and polyester fabrics for athletic uniforms, sleepwear and other products.

CHARLOTTETruliant Federal Credit Union will invest $11 million in an expansion here and in other parts of Mecklenburg County. The Winston-Salem-based credit union recently opened four branches there and plans to open six more by the end of 2016, creating 120 jobs and giving the bank a total of 14 branches across the region. Founded in 1952, Truliant has 27 locations in the Carolinas and Virginia.

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