When it comes to helping companies that show promise, Wellspring Capital Management is overflowing with support. The middle-market private equity firm invests in companies with strong business franchises that are poised for growth. It often targets underperforming or undermanaged companies that need financing for management-led buyouts, recapitalizations, acquisitions, or other transactions. Founded in 1995, Wellspring invests anywhere from $50 million to $2 billion in target companies. The firm's principals take an active role in guiding the management of its holdings, which include Checkers Drive-In Restaurants, Ellett Brothers, and Performance Food Group. Wellspring manages more than $3 billion in capital.
Wellspring typically holds on to its investments (which span a variety of industries) long enough to position them for the next phase of development. In 2010 Wellspring sold Dave & Buster's to Oak Hill for $570 million. Wellspring bought the Texas-based restaurant/arcade chain in 2006 and had plans to take it public, but the IPO was delayed due to the bad economy. In 2009 Wellspring sold its for-profit, post-secondary education company Vatterott Educational Centers to TA Associates.
The company closed its fifth fund in 2010, raising $1.2 billion. The following year Wellspring acquired air gun maker Crosman Corporation from Pamlico Capital. It plans to invest in and develop Crosman, which sells its products through more than 10,000 locations worldwide; terms of the sale were not disclosed.
In 2008 Wellspring and Blackstone teamed up on a $1.4 billion offer for Performance Food Group. The bid was successful and Performance merged with another portfolio company, Vistar Corporation, to create one of the largest food distributors in the US. – less