CHB Capital Partners

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Spring 2008

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Spring 1999

It has been almost nine months since our last letter and we have been busy. Unfortunately, to adhere to the strict one page limit will necessitate eliminating the breezy intro and providing only highlights on selected activities. Hopefully this is not a permanent change. We hired Sean McClenaghan as an associate in February. Previously he worked with McKinsey & Co. in Atlanta and with DuPont for seven years before business school at Harvard.

In October of last year, at a simultaneous closing, Trussway acquired a $40 million in revenue single family truss manufacturer and we sold our investment in Trussway to a larger private equity fund. We and management believe that Trussway has found a great partner with the resources to help it lead the consolidation of the factory-built housing component industry. This was our first realization from the Fund and it worked out very well for everyone.

We exercised our option to invest additional equity into Spyder at the end of 1998. Our early analysis of Spyder's performance during last season's miserable ski season (not even enough snow for John to take his annual trip down the slopes in the ski patrol toboggan) shows that the company gained significant market share and had the best combined levels of sell through and gross margin for its specialty ski store customers. Our pre-season orders were strong for the 99/00 season and we look forward to more excitement from Spyder during this next winter.

We will close a new investment in early June. We are backing the management team of an environmental services company to buy out an ESOP that is the controlling shareholder. The company specializes in providing project management services to government and commercial clients in complex clean-up situations. Simultaneous with our investment, the Company will acquire a similar sized competitor. We are partnering with Cherokee Investment Security in this investment. They are a Denver-based private equity fund that focuses on investments in the environmental sector.

In addition we have signed a letter of intent to provide growth equity to a small ticket leasing company. The company has a very successful model for growing originations and requires capital both to accelerate its roll-out and to provide access to lower cost funding. We are partnering with Provender Capital in this investment. They are a New York based private equity fund that focuses on, among other things, financial services investments.

We have closed CHB Capital Partners II at $48 million. 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


511 Sixteenth Street, Suite 600 Denver, CO 80202
Telephone: (303) 571-0100 Facsimile: (303) 571-0114