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It's
been about a year since our last update and the world is a
different place. Our usual breezy intro seems somewhat less
appropriate now. Nevertheless, we reserve the right for a
follow-up gloating letter in the unlikely event the Av's are
able to repeat.
In June of last year, we hired Kyle McNeal as an analyst. Previously, Kyle was a consultant with McKinsey & Company in Atlanta and is a graduate of Georgia Tech. After a year of measuring Steve's office, Kyle will be replacing Steve Greene, who will be attending Harvard Business School in the fall.
In February, at a simultaneous closing, MACTEC acquired the Law Companies Group, a $200 million engineering and environmental consulting company, and we sold our investment in MACTEC to a larger private equity fund. MACTEC had grown from $150 million in revenue at the time of our initial investment less than three years ago to over $500 million with the acquisition of Law. Management and we believe that MACTEC has found a good partner to help the company continue its growth strategy in the environmental and engineering infrastructure services industry. This was our first realization from Fund II and it worked out well for everybody.
Spyder Active Sports' rapid growth in the ski apparel market has continued unchecked. Sales will be up almost 20% over last year with record profitability (again). Spyder's product line got some fantastic exposure during the Salt Lake City Olympics (especially during Bode's silver medal combined performance shown above and Today host Matt Lauer's fashion show) and management is looking forward to another record year.
In our first year with Alternative Technology (ATI), the company grew 10% despite a dramatic slowdown in IT spending nationwide, with many of ATI's competitors seeing business drop by more than 20% year over year. The company's focus over the last year has been to build out its management team, improve its product portfolio and increase its geographic coverage by opening a Canadian operation. With a little help from the economy, management believes that ATI is well positioned for a strong year.
In November of last year, we made a small follow-on investment in Champion Technologies. Like everyone else in the telecom market, the precipitous decline in telecom equipment spending has hit Champion hard, though order volumes have been increasing slowly from their October low.
On the new deal front, not surprisingly, things have been rather quiet as the credit markets have tightened and fewer attractive deals are coming to market. We encourage you to call us with interesting investment opportunities within the closely held and family owned business market. We look for transactions where we can invest equity capital in established companies with $20 million or more in revenue. Should you call, we guarantee you a thoughtful and timely response.
Tad Kelly, John Flanigan, Blake Morris, Grant Clayton, Sean
McClenaghan, Steve Greene & Nancy Thayer
511
Sixteenth Street, Suite 600 Denver, CO 80202
Telephone: (303) 571-0100 Facsimile: (303) 571-0114
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